Foreign Stock market last year sort of turning Some Millennials and genziers off of Investing instead they're increasingly Putting their money into high yield Savings accounts so when does it make Financial sense to use them and when is The when is it better to maybe throw Your money in the stock market Stephanie O'Connell Rodriguez is here with me in Studio 57 to talk a little bit more About all of this she's the host of Real Simple money confidential podcast thanks For joining us so listen when I saw this Topic I thought to myself this is for Wealthy people who have a hundred Thousand dollars in their savings Account I'm not one of those people Certainly when I was the age of a gen Z Or a millennial I don't think I was one Of those people I didn't have that extra Money Um so you know why does this sort of Bank account even make sense for people Who don't have a lot of money for sure Well I think we all want to get more From our money and the thing is a Savings account is one of the first Kinds of tools we can use to really Start Building Wealth building savings And with a high-yield savings account You know seeing a little bit of a return On our money high on savings accounts Right now are paying interest rates
Around three and a half percent okay That's a pretty substantial amount of Money as opposed to the national average On savings account is at 0.33.35 that's a 10 x difference so if You have a ten thousand dollar balance That's over the course of a year the Difference between maybe seeing like 35 In interest versus 350 in interest That's not the same kind of return if You had you know 250 000 in that account Yeah but it's something and it's nice to See something for your money I always Say it's 350 you didn't have before Right so that's always a come up um so Are there any sort of like restrictions On these sorts of accounts because I Think some people hear that and they Think oh I probably have to have a Minimum balance or and so they just they Don't even pursue it well it's certainly Worth shopping around just like you're Gonna shop around for the best interest Rate you want to shop around to see if There's any fees Associated you want to Shop around see if you have to maintain A minimum balance or if you have to keep A certain balance to get that great Interest rate so it's certainly worth Putting on your consumer act just like You would for a purchase as you're Shopping around for the savings account So as you know uh during the pandemic a Lot of us were sitting at home
Downloading uh apps and and trying to Make the best of the stock market based On our limited knowledge I readily admit Everybody knows I was one of those People and I don't really know much About the stock market but I think you Know this sort of stuff made it a lot Easier to invest in the stock market Kind of on a whim Um and now I think we're all sort of Getting a hard lesson in the ups and Downs of the stock market Um you know I guess when you when you Look at someone who doesn't have a ton Of money and given the option of you Know investing and swiping up or swiping Down on stock would you suggest the Stock market versus just park your money I think you really have to ask yourself What is this money for is this money for My Safety and Security emergency fund That money that I'm gonna use if I get a Flat on my car like a home repair I go Through a layoff that's very topical Right now is this money I'm going to Need to turn to and reliably have for me And not have risked in the stock market And subjected to the short-term Volatility in the ups and downs of the Market yeah secondly is this money that I'm using for a short-term goal Something I want to do in the next year Or two maybe it's a down payment on a Home maybe it's a wedding I know that
You see returns maybe six seven plus Percent in the stock market over the Long term and you think you know I'd Rather have seven percent of my money Than three percent yeah but the thing About the stock market is it is a risk We just don't know what it's going to Return and last year was a really good Lesson in the risk of that so these Savings accounts especially these days When they're paying these interest rates Around three percent plus are a great Option for that money that you want to Be there for you really good Financial Advice Stephanie thank you very much Thank you This money watch segment has been Brought to you by Merrell a Bank of America company what would you like the Power to do
