youngun
Member
Cash: $ 3.60
Posts: 17
Joined: 09 Nov 2005
Location: Long Island, NY
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my money is in a regular savings account appreciating at roughly 1%. I want to make my money work harder for me. I learned about Certificates of Deposit recently, but some sources have told me that CDs have a "negative yeild." I dont withdraw so a CD really would be ideal. could someone explain to me how a CD could yeild negatively? any other words of advice for a young man looking to fatten his pockets? thank you in advance.
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Wed Nov 09, 2005 12:30 am |
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cravej
New Member
Cash: $ 1.40
Posts: 7
Joined: 26 Oct 2005
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Another option would be an online bank. I just opened a regular savings account that yields 3.5% with Ing Direct. You link it to a checking account & all transfers are done through your checking. You get close to the CD rates with a lot more access to your money.
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Wed Nov 09, 2005 12:46 pm |
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auggyf
Full Member
Cash: $ 19.90
Posts: 97
Joined: 24 Sep 2005
Location: San Francisco
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Other online banks that seem to increase their interest rates more quickly are EmigrantDirect and HSBC Direct.
Depending on your marginal income tax rate, it may be worth it to get a tax-exempt money market account. Depending on what state you are in, you can also be exempt from state income taxes, and most is AMT free too. Do the math.
Tax free Yield / (1 - your marginal tax rate) = equivalent taxable yield
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Wed Nov 09, 2005 4:21 pm |
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youngun
Member
Cash: $ 3.60
Posts: 17
Joined: 09 Nov 2005
Location: Long Island, NY
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^ thats interesting. i dont pay taxes. intimidating stuff. is it gonna be taxed because its in the bank?  learn me a thing er two
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Sun Nov 13, 2005 6:28 am |
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zZigzZag
Member
Cash: $ 3.65
Posts: 17
Joined: 17 Jul 2005
Location: Colorado
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Savings accounts and CDs may be considered to have a "negative yield" if they are earning less than the current rate of inflation (which they commonly do).
Your money is not taxed when it is deposited in a bank. However, any interest you earn is considered income and must be declared on your income tax return.
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Mon Nov 14, 2005 3:56 pm |
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auggyf
Full Member
Cash: $ 19.90
Posts: 97
Joined: 24 Sep 2005
Location: San Francisco
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quote:
Originally posted by youngun
^ thats interesting. i dont pay taxes. intimidating stuff. is it gonna be taxed because its in the bank? learn me a thing er two
If you are in the U.S., it is up to you to file your own taxes. You need to include all of the interest from savings accounts/CDs as ordinary income.
Now, it sounds like you either aren't in the U.S., are a dependent, or don't have any income. If you are in the U.S. and are in a low (or 0%) tax bracket, you can still run this calculation to see what kind of savings acct is worth it, but most likely the taxable savings will be better for you.
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Mon Nov 14, 2005 4:01 pm |
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