Help! The Economy is borderline recession and my stocks are dropping, how can I save my money?

Some of us have either put our money away in a low interest savings account or a C.D. for a period of 1-5 years. All are financially stable options and are based on both the Fed rate and interest yield by the given bank your using. Both have pro’s and con’s but are much more viable options from stocks and hedge funds at this point the way the Nasdaq and Dow are fluctuating. Stocks are fun and with Forex breaking the scene, we all need to slow down and find the best place to save our pennies during this rough time.

Savings Account:Interest rates with major banks run anywhere from 0.20% with Wachovia to 0.35% with 5th/3rd Bank. With thousands of locations in just about every city, this is a viable option to have a savings account in the same bank as your car loan, mortgage, or Certificate of Deposit. Also, online banking has become very popular for account holders and to be able to do BillPay and transfer funds from one website, saves you plenty of time.

Certificates of Deposit:To prevent yourself from going to the mall and spending like a mad house, the CD option is very viable. Oh, and did I mention that a yearly interest rate is typically anywhere from 4-7% depending on the type of bank be it credit union, major bank, or local bank. Credit Unions typically give larger interest rates. Now, as old fashioned a CD can be, there are huge risks involved. If you have a money emergency, you will be charged a large fee to withdrawal any amount of money before the 1,3,5 year interval is up. Once you put your savings into a CD, the bank keeps it locked. This secures that the bank can use your money to offer loans and mortgages.

Money Market-High Yield Savings: As the best viable option in my opinion, MMA and High Yield Savings accounts have been the talk of the town the past couple of years a ING Direct, Emigrant Direct, and Etrade offer astounding interest rates anywhere from 3.50-5.15%. Check Bankrate.com for the best rates. Here are some issues with these types of accounts:

• No Debit/Check Card for Instant Withdrawals
• No actual bank to walk into with questions or concerns
• Takes a minimum of 3-5 days to deposit or withdrawal into or out of these accounts.

So I pose the question to you? Which do you perceive the be the best and will any of these account options take you away from your day trading?

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Filed under: Investments, Saving