Checking accounts are still the best way to save money

FOMC (The Federal Open Market Committee) meeting has started, and in next 24 hours we can expect official report. What we can say for sure is that thanks to some positive reports on the US economy (June employment report and good news from labor market) the expected 2015 hike could come a bit earlier. What this means is, that savings in form of checking accounts probably will get a bit higher interest rates before this year ends.

The fact is, this type of money saving isn’t the best choice by far, but for those of us who don’t have thousands of dollars on our hands, ready to invest in other methods of gaining financial revenue, checking accounts will still be the best way to prosper over time. We all know that financial crisis is behind us and what we have managed to save up to this point could only be multiplied.

In absence of other ways to save and create profits Americans have turned back to checking accounts. While a few years back, US citizens had an average of $2100 in this type of account, this year we have around $4400 deposited, which is way higher than a $790 – an average savings during the economic crisis (back in 2007.). It’s obvious that we were using our savings for our everyday needs, paying utility bills, gas or food. It’s also obvious that hard times have passed and we can again turn back to savings the way we used to.

If the expected FOMC report confirms that US economy is doing well, we can expect an increase of interest rates on savings at 0,6% (average value) in 6 months period, 0,53% (average value) on 2 years period etc. We could also see further increase at the first quarter of the next year (maybe even sooner) and if nothing unexpected happens, those rates should only get better over time.

If you are thinking about savings in a form of checking accounts don’t wait too long to increase the amount of money you have on those. By the looks of things that money could soon be used to pay for your mortgages, plan a vacation or even buy a new car – all the things we used to do. Increase of rates mentioned above could really pay off in a short or a long run regardless of the initial money you can put aside today.