The Creation of the Federal Reserve System (Part 3)

There is no risk in a savings account. You are simply storing your money for future use. You can uses that money at any time to make purchases or to invest.

This is a site middle schoolers use to get information on savings/investments.


Differences Between Saving and Investing

Q: What are the differences between saving and investing?

A: Your "savings" are usually put into the safest places or products that allow you access to your money at any time. Examples include savings accounts, checking accounts, and certificates of deposit. At some banks and savings and loan associations your deposits may be insured by the Federal Deposit Insurance Corporation (FDIC). But there's a tradeoff for the security and ready availability of these savings methods: your money is paid a low wage as it works for you.

When you "invest," you have a greater chance of losing your money than when you "save." Unlike FDIC-insured deposits, the money you invest in securities, mutual funds, and other similar investments is not federally insured. You could lose your "principal," which is the amount you've invested. That’s true even if you purchase your investments through a bank. But when you invest, you also have the opportunity to earn more money than when you save. There is a tradeoff between the higher risk of investing and the potential for greater rewards.

Source: http://www.sec.gov/rss/ask_investor_ed/saveinvest.htm

Please show me a Government or educational institutional site that describes savings accounts as investments.

If you can't find any other site but Wikipedia than please apologize. Thank you!

The funny thing is people around this forum actually agree with you. Now that is comedy gold at it's finest. Just letting you know, if you have the same level of education as Snooop, you have major problems!

 

Now you are just trolling. Embarrassing!! Please go to your nearest college, sign up for a finance class and try to explain to your teacher that putting money in a savings account is an investment.

An apology is needed for us to continue this conversation. Otherwise you have no hope. If you can't understand the difference between saving and investing, than I am clearly wasting my time, which is pretty obvious... since most of the stuff you said would cause most intelligent people to laugh.

 

Here's a source you can relate to, Wikipedia...

http://en.wikipedia.org/wiki/Saving

Considered yourself owned

 

The troll just won't quit, how many more people on this forum do you want to show how cluessless you are?

Re-read your own source. This is getting embarrassing.

"Saving is closely related to investment. By not using income to buy consumer goods and services, it is possible for resources to instead be invested by being used to produce fixed capital, such as factories and machinery. Saving can therefore be vital to increase the amount of fixed capital available, which contributes to economic growth."

 

Don't mind Snooop, he is a foreigner and has trouble understanding English...

"Saving is closely related to investment. By not using income to buy consumer goods and services, it is possible for resources to instead be invested by being used to produce fixed capital, such as factories and machinery. Saving can therefore be vital to increase the amount of fixed capital available, which contributes to economic growth."


Embarrassing!!

 

That would be you. And honestly, college would be too difficult for you. I think kindergarden is more of your level. Please enroll in nearest kindergarden class to refresh your lowest level of math skill.

Everyone is laughing at you everyday. And I agree that you're clearly wasting your time on here while you could use all your time to get some some education from kindergarden classes, that will help you in the long run.

 

These people believe...

1) Savings are investments
2) Banks need your money to make loans

Snoooop also doesn't know what real disposable income is.

Embarrassing!! I try to educate and this is the respect I get in return.

 

Do you understand what you just read?

 

I assume you're trolling

 

Your crooked theory, check is now equivalent with cash eh

Can't stop laughing reading this blalant lie....

 

"In many instances the terms saving and investment are used interchangeably. For example many deposit accounts are labeled as investment accounts by banks for marketing purposes. To help establish whether an asset is saving(s) or an investment you should ask yourself, "where is my money invested?" If the answer is cash then it is savings, if it is a type of asset which can fluctuate in nominal value then it is investment."


People do not understand the difference between saving and investment... hahahahahaha.

Not surprised though.

 

Banks do not label anything for marketing purposes. Banks utilize checking/saving deposits to maximize profits. Major banks even give you cash if you open checking account with them. Banks exist for one reason, to make money from eveyone money.

At this point, it's safe to assume that you do not either have a checking/saving account, no wonder you're so clueless and misinformed about basic banking.

 

http://www.commercebank.com/personal/saving/investment-savings-account.asp

What's funny is Snooop claims he works at a bank. His knowledge of banking is embarrassing... I have concluded he is either a janitor or a teller.

Source: http://en.wikipedia.org/wiki/Saving

Absolutely embarrassing. And what's funny is there is nothing you can possibly say to change their minds.

 

What do you think banks do with your money? Do banks just sit on it?

Why do you think your saving has to be insured? Is there too much risks for banks to simply sit on it?

 

And btw ak, according your theory, is check also the same as cash?

 

They use it as vault cash to exchange deposits for cash or they give it to their Federal Reserve Bank in exchange for electronic reserves which they then lend to other banks who need it. They do not use reserves to create loans or to invest in securities. This is why it is not an investment. Your savings account is not investing in anything.

If a bank creates money that is not paid back, then they lose capital and eventually become insolvent in which you lose your deposit. The insurer (aka the FDIC) simply carries that deposit over to another bank and it's paid for by the Govt. You depositing cash in to a bank to get a savings account does not change the capital position of the bank.

 

Checks aren't cash. They are equivalent to cash as in they can be used to exchange for goods and services.

If 3 people walk in to the grocery store, 1 has cash, 1 has a debit card, and 1 has a checkbook and they all walk out with groceries... what is the difference other than the way the methods of payments are processed?

 

Checking/saving deposits are part of banks reserve. Banks use reserves to make loans. You fail miserably at "fractional reserve banking". When your money is in deposit, it's your loan to banks, that's why banks pay interest on your deposits. Banking 101.

Trolling again ak? Banks do not create any money. Banks create loans by multiplying deposits. Banks use reserves/deposits to make loans, if banks do not have enough capital to absord bad loans, banks will go under, when they go under, they will take everyone money with them. That's reason checking/saving deposits are insured or backed FDIC.

 

Then how can your bank credits your account full amount of the check immediately right after you deposit it?

Or is it a lie?

 

By typing numbers in to a computer that electronically credit my account.

And I promise you I deposited two checks, one over $1,000 and one over $3,000 and both checks were in my account immediately and the check was put in the drawer with all the other checks where they will go to a clearinghouse and they will transfer reserves between the banks.

It doesn't clear the person's account who writes the check when I deposit the check, maybe that is where you are confused.

 

Debit card/check is not equivalent to cash. Are you making (*)(*)(*)(*) up as you go aki? When 3 people walk in the store, the guy who pays cash will walk out with foods, the one uses debit card can get decline because non sufficient fund. Many stores across the country do not accept personal checks for the same "non sufficient fund" reason.

 

Banks do not use reserves to make loans. I have proven this over and over again. You will never learn.

Banks do not create any money??

Hahahahahahahah, wow!! I have heard it all.

Savings accounts are investments
Banks do not create any money
Banks use reserves to make loans

WOW!!! This is why people should go to college.

 

I'm not talking about it being declined or a store not accepting personal checks.

If a store accepts checks, if your electronic transfer is not declined, than you walk out with food just like the person who paid with cash.

So what's the difference other than the method of processing the payment?

 

Lying again ak. Banks can't credit full amount of the check until it's cleared. Anyone whoever deposit a check would understand this. Now you're doing a terrible job at lying.

That means check = cash, because banks credit your account immediately.

Of course it does not clear until they send it to clearinghouse. And if your check is not cleared, meaning, there is no money yet. Are you trolling again?

 

That's the difference between cash, debit card, credit card, personal check.

Whey you pay with cash, you get your merchadise, if you pay by other method, then it depends on whether or not store will accept your debit/credit card/personal check.

Don't you see the difference?