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Discussion in 'Community Discussion' started by waloshin, Jan 15, 2010.
would.ing direct be the best?
Look around on bankrate.com. They tend to have pretty decent numbers on their. It really depends on if you need to be able to access the money on a whim or if you just have it and want to put it aside long term.
you could put it into my savings account
I agree, checking into bankrate is not a bad idea, but I use ING and tend to enjoy having their orange checking for play cash and their savings for savings. They were the highest interest-bearing savings at the time but over time they've reduced their APR by more than half. That's life but it's still more than what my bank offers.
When/how often will you need access to your money? If you can wait several month to a few years, you can do much better buying a CD or savings bonds.
I have used ING in both the UK and Canada and found their rates to be very competitive. With a set amount like $2000, you could shop around and might find a better deal. Just watch out for withdrawal penalties and such. You will need to think about what your plans are for the money first, however.
Also check out ICICI. I've seen some advertisements of theirs where they had higher rates than ING.
It matters not where you park it. Interest rates are so low. On $2,000, you might earn enough interest each month to buy a small latte, at McDonalds.
And didn't you post a thread about taking out a bank loan yesterday?
Where do you think he got the $2000 from?
Use the money to repay your loan.
Ah, yes, He says he used his loan. Maybe he finally bought a damn car. Or maybe he's full of it.
from selling my old car. and if i put the money down to pay part od my loan off the intreat would still be the same and the monthly payments would be the same just a smaller term.
Trying to profit over a simple error from a company.
It's opportunism at its worst. When did every small mistake mean that you're supposed to be able to benefit or profit from it?
This is how people get suckered into financing so easily.
With $2k down your terms are likely to be similar. The interest rate is probably not going to change and your payment probably won't move much. The real savings is in the finance charge. Over the life of your loan ("LOL") you will pay a certain amount for that car.
If your loan is $10k figure your rate at 7% with 36 total payments. Over the LOL you will repay $11,115.72 (give or take). If your loan is $8k, same rate and term you'll repay a total of $8,892.72. That means you'll pay more over time if you finance $10k than if you financed $8k.
So you tell me, if you need $10k and you have $2k why the hell would you sit on it? Even if you used it to make a few payments you're still paying the same amount over the LOL.
This is all loosely stated, I don't have my fancy calculator to ensure it's correct but that's the basic premise.
Unless you can find a Bank of Magicland that still pays decent interest rates you should pay down the loan. You save a lot of money that way.
This illustrates it perfectly. With these figures in three years you save $223 by paying down the loan. That's $74.33 a year, equivalent to 3.7% tax free interest. If you can find better than that on a three year deal you'll be lucky.
If I had an extra $2K to invest I'd put it in my Scottrade account. Otherwise I'd just save it in my interest bearing checking account.
Then you should never of bought a new car then because clearly from these 2 threads you completely lack any type of an emergency fund and willing to bet
Put it into a saving account at your local bank because you need to have some type of short term reserve built up. It saved my ass when I lost my job having 10k in the bank.
yes, its best to pay off the loan as quickly as possible.
but let's not forget that one advantage of taking a loan is keeping liquidity. meaning, if that $2,000 is your only cash, I'd hang onto it for a rainy day.
for instance, if I had 200K cash available to buy a 200K house, I wouldn't necessarily blow all my cash at once. it's better to hang onto some for other expenses, like emergencies or car repairs. (NOT things like new Apple toys)
besides, a 10K loan isn't huge. paying it off per schedule can help build credit.
edit: Rodimus Prime is right
Somehow I have a feeling that if he made a small error the bank would have no issues profiting from him over it.
The truth is there is no such thing as a "high interest" savings account anymore. The federal reserve has driven interest rates way down.
How old are you? I'm guessing you are young-ish, but have you thought about investing the money in a higher yield investment? Savings accounts are great for liquidity, but poor for returns.
If you're interested in socking some money way for a while, you would be better off buying a CD or investing in an ETF like one of the SPDRs.
I live in Canada, Ing direct is offering 3% tax free interest up to $5000 a year. So on $2000.00 I could make $60.00 a year.
So would a cd, or a bond yield a higher amount?
Or you can pay down the loan you took out with that 2 grand and likely save over $60 a year in interest over the life of the loan and come out ahead in the long run.
And how much interest are you paying for your loan? I'm guessing atleast 7-8%, if you are really lucky.
This is what I pay every month I have 59 payments left.
Interest Amount -$21.68
Loan Principal pymt -$167.76
So what would I save if I put down the $2000.00
Current balance: $9,572.27
Your numbers are useless to us. We need your interested rate to figure it.
I am going to say it again.
You have no emergency fund right now. First thing you need to do is get a small emergency fund built up THEN worry about paying down your debt.
Emergency fund uses are lets say your car breaks, you got the money to cover it.
That 2 ground is good emergency fund money. Emergency funds do not make you money. Instead they save your ass when something bad happens. Emergency funds are lucky if they make 1% interested hell 0.05% is good for an emergency fund. Put it in a saving account at your local bank then put what ever else you can at paying down your debt.
Do people no longer understand the point of having an emergency fund.