Most people with savings accounts see returns of 0.01% from banks like Chase and Bank of America. Even higher yield accounts feature rates under 1.00%, and CDs feature rates far below 5.00% normally. By now, most people should be aware that they can beat these yields by investing in stocks through capital gains or dividends. Stocks aren't as risky as most people think, and I (as an amateur investor) receive an annual yield around 8.00% without much effort. Does anyone else invest instead of put money into savings?
I like to have a bit of liquid cash ready, just in case. Generally I keep some cash in an account earning interest where I can get it immediately if I want it. I also have shares and once my savings gets above a certain amount I generally invest in more shares as it does get better returns.
Investing is always the better option. If all you do is earn cash and place it your bank account, inflation will eventually eat away at your returns. And the more the prices of everything increases, your money would technically be losing its value because you'll have to spend more to buy something which would have been cheaper back in time. To avoid that, I always invest most of my money but not in stocks though.
I'm sure a lot of people use savings. You know, the kind who don't have the time or knowledge to start investing, or who just don't care about that kind of stuff. I mean when I start investing, I plan on having a High-Interest Savings Account to put my excess money in for whatever reason I might need it, it's always good to have one as long as you've got at least $10,000 to sit around in there.
