E loan savings account

blue_fastbackNovember 3, 2006

I was doing some searching at Bankrate.com and E loan has a savings account paying 5.5% and CD paying 5.7%. Anyone use them before. I am currently using Capital One money market that pays 4.8% which is pretty good

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joyfulguy

Hi blue fastback,

I'm pleased that you like the Blues - there were a couple of hours of it on our national radio last night (and to be a couple of hours of Jazz tonight).

I don't like earning interest.

While the borrower of my money usually guarantees that they'll pay back every dollar borrowed, plus rent on the money, they never mention the other guarantee: that they won't pay $1.00 more than the amount borrowed, either.

That is, all of the increase in value that the invested asset will ever produce ... is produced right now.

And the whole amount of that interest is taxed - right now.

In Canada the interest that they pay is taxed at top rate.

And, since the size of the underlying asset can't grow, you have another problem - the value of each dollar shrinks.

Annually - well, it has since the Great Depression - the Dirty Thirties.

So - you must add part of your current return to the underlying asset in order to keep your purchasing power intact.

You can keep what's left.

There's more - but I'm about to get dumped here at the library, so I'll say, "So long - for now".

ole joyful

    Bookmark   November 5, 2006 at 3:17PM
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joyfulguy

If I buy a high quality stock, the rate that the company pays may be lower currently, but in my country the tax is much lower on such dividend income.

Moreover, I expect the stock to grow in value, over the long term, so I don't see the need to take part of current dividend income to add to the asset in order to keep purchasing power intact.

When you earn interest and your current contract expires, you can't know ahead what rate(s) may be offered when you wish to renew.

If my stock price advances, usually the dividend rate keeps pace with it.

A stock that I bought 39 years ago for something over $4.00 per share originally paid about 6 cents or a dime per share annually.

Recently the price of the stock went to over $85.00 and the annual dividend is now $2.80.

How long do you think that it may be till your interest rate grows 28 times? 10 times, even?

For short-term investment, investing where the amount of the asset remains stable makes sense.

Good wishes for skillful use of both your income and your assets.

ole joyful

    Bookmark   November 8, 2006 at 5:49PM
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alphacat

5.5% is a good rate for an FDIC-insured savings account, if that's what you want. But is that what you want? This is not a rhetorical question: The answer depends on your circumstances and you haven't told us enough to figure it out.

The main question is whether you are intending to use this account for money that will be held for the short term (such as saving for a new car or a down payment on a house) or for the long term (such as your retirement). If the latter, I wouldn't settle for 5.5% because I can probably do much better over a 20+ year period by an appropriate choice of mutual funds.

    Bookmark   November 27, 2006 at 10:25AM
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missjulied

This person is clearly looking for information on E-Loan, not on whether they should have their money in a short-term account or even making interest at all.

Has anyone had experience with E-Loan's savings accounts, good or bad?

I'm curious about them as well.

    Bookmark   November 29, 2006 at 6:12PM
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