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When
deposit money in the bank, what type of return are you expecting?
2.25%, 3%, 5%? Regardless of what return you expect, the bank
isn't in the business of making us successful, they are managers.
By managers, we mean they watch over our money. That's it. Also,
banks offer several vehicles such as:
- CD's.
The return from CDs are usually higher than most, however
it locks your money for a time and offer a return somewhere
around 4.5% depending on your bank and the current interest
rate.
- High
Yielding Accounts. This account provide a customer to carry
a minimum amount such as $10K that yields a higher return
than a saving or checking account. It is good to use High
Yielding Accounts to place 3-6 months of cash reserve away
for emergencies.
- Regular
checking and saving accounts
Have you
ever thought about what banks do with your money after it has
been deposited? Invest! That's right, banks invest like everyone
else. Most interesting, since
some people will not invest for whatever reason, banks are aggressive
about investing depositors money for the banks benefit. So what
do they in invest in? According to a inside source, XYZ bank
invest in such vehicles as Tax-Lien, Tax-deeds, Stock Options,
and Real estate to name a few. Let's try an example.
Suppose
you receive a 3% return on on a $1,000 deposit. That's a $30.00
return for parking your money at XYZ Bank. Now let me get this
right. If we deposit $100 in XYZ Bank, they will so generous
to give us a $30 in return. Does that sound like a great return
to you? However, since depositors aren't willing to take the
risk, XYZ bank will take that $100 deposit and instead of parking
the money, they invest. Let take it the next level and ad volume
to the equation. |
