The Money Tutor

Tuesday, January 10, 2006

Incentive for Saving

In case you did not have enough motivation to get your finances together this year, here is a little incentive:

Okay, so you have a savings account. Good. Now what is the APY (Annual Percentage Yield aka interest rate) on your savings account? It is VERY likely that you will find a number somewhere between .4%-.5%. Also, have you noticed that no matter how much money you're are putting into your savings account that you still are only getting a few cents in interest every month? By leaving your money in this savings account, you are actually losing money. Why? Take inflation into consideration. Chances are you will only earn a few dollars a year.

Explanation: Let me introduce you to online banking. Yes, online banking. I don't mean your local bank's website, I mean ONLINE BANKING. See one of the reasons your local bank does not pay you as much interest as an online bank is because your local bank is a physical place. And I bet there are at least five other branches in a few miles radius. On the other hand, online banks don't have many branches if any. All business is conducted online or through the mail. Not having to pay leases or rent for an actual building saves the bank money, and the online bank passes that extra cash down to you, the customer.

Solution: ING Direct has an active promotion that credits you $25 upon opening a new savings account (If you are referred by someone). ING Direct currently pays 3.80% APY! Notice the huge difference? This difference means more money for you! Don't hesitate, open an ING Direct Savings Account today! Remember to get your $25 sign-up bonus you must be referred and deposit a minimum of $250. Email me for the referral.


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