Big banks have been around for 150 years and are the place where most Canadians go to save their money. They offer us all sorts of different accounts to save our hard earned money. One problem though! How can anyone get excited about a 0.05% return on their savings? Even kids know that’s a brutal rate of return.
I do most of my banking with RBC and at one point had a savings account with my local branch. The interest rate I was getting was 0.05%. On $1,000 that works out to $1.50 in interest earned over three years or .50 cents per year. A measly $1.50 return over three years is pretty hard to get excited over for anyone.
It actually gets worst.
My monthly fee on the account was $10.95 or $131.40 per year. Let’s use the three year scenario from above, and over the course of three years I’d pay the my bank a whopping $394.20 in monthly fees. After all was said and done, the true rate of return would be -392.70 over three years.
I blame my self for that. I set my self up, and was irresponsible with my money. On a more brighter note, I smarted up and no longer use my home bank for saving money. In fact I pay $0 in monthly fees anymore.
It’s a tough sell to save when there really isn’t that much incentive out there, in terms of interest. Looking for yield is a great past-time for all ages and in today’s tech driven society, savers should be encouraged to search around themselves for the best rate. And trust me, there are a lot of options to stash your money and get some return.
The good news is it’s only getting easier for Canadians to compare where they can save money. Competition is fierce and savings account options have become more of a commodity that you can go see the rates and then look if the account is good for you. Comparison websites like ratesupermarket.ca are making it easier than ever for Canadians to choose the right savings account and even the best credit card for everyone’s unique needs.
We all know that ING Direct offers a decent interest rate on savings, but doing a little more research and you’ll find rates as high as 2% for the general population at other online entities like Canadian Tire Financial and Ally Financial.
Despite very little incentive for saving, we must save for the future. Every dollar saved is better than a dollar spent. Create your own incentive. Are you looking to purchase your first home? Buy that new car? Take that big trip? Incentive exist all around us, we just have to take a step back and find what’s important to us.
Anyone who has ever asked me in the last two years since I started blogging on how ways to get motivated to save, I’ve always said; “Create a budget and start budgeting. Once you see where your money is going, I guarantee you that it will give you all the incentive you need to start stashing some money or start stashing even more money”
OK, maybe that wasn’t inspiring, but it’s hard to motivate anyone to start saving. It’s much easier to spend than save. True fact.
Give your self that savings boost. Open up a savings account at a different institution, create an automatic withdrawal option and don’t look at the rate. In fact forget about the rate totally. This way at least you’re shielding yourself from the brutal reality of today’s rates while still saving something for the future. At least that’s my two cents worth.
How do you get excited about saving money?