According to a recent Gallup poll, the average American puts the dividing line between rich and comfortable at $1 million in assets or $120,000 of annual income. Of course, that’s just an average of people’s perceptions, but it represents who most of us consider to be wealthy. If you’re not currently in college studying for a high paying career or already making $120,000, you probably won’t ever reach the milestone that way. But if you use a little sense, savings accounts can help you reach the other milestone: you know, the $1,000,000 in assets.

Of course, we’re not suggesting that you should put all of your money into savings accounts. With savings rates as low as they have been over the past decade or so, it would take you forever to reach $1,000,000 that way. Even if you had 40 years to save, you’d need to save about $1,400 per month (assuming a generous 2% interest yield). Most of us just aren’t in the situation to do that. Or, if we are, we probably have already met the first milestone for being considered rich ($120,000 in annual income).

But you can and should use your savings accounts as a safe place to put your money while you are saving to make other investments. Most of the best investments require larger deposits, and one of the best ways to work up to a sizeable deposit is to simply deposit money into a savings account every payday and leave it there.

After you have built up a sizeable savings account ($1,000 or more), look into other financial avenues which will offer you better returns. While there are experts advocating for one sort of financial vehicle or another (usually the one they deal in), we believe your best bet is to have a diverse portfolio. Consider investing in some of the following:

• CDs. They aren’t sexy, but they are secure and offer a decent return if you opt for a longer term.
• Mutual Funds. You can get into funds for as little as $25 per month, but if you want to get into the better funds, you’re going to need a sizeable deposit. You’re better off waiting until you get into the better funds.
• Precious Metals. Gold, silver, and other precious metals have one thing in common: they have always had value. No matter what the economy does or how valuable paper money is (or isn’t), precious metals have a value that transcend time, national borders, and shifting conditions.

We all know that savings accounts don’t give a very good return. On the other hand, your money (at least up to the amount the FDIC will insure (currently $250,000 per account) is completely safe there.

This makes traditional savings accounts an excellent option for emergency funds, but little else. Here’s why a normal passbook savings account works for your emergency fund:

• Your money is safe. This is true up to $250,000, as mentioned. And it you have more than $250,000 in a passbook savings account, you’re nuts anyway.
• Your money is readily available. You don’t have to do anything special to get to your money, and you’re not generally restricted concerning how often or how much you can take out. Let’s hope you don’t have to clean your emergency fund out all at once, but if you do, it’s better to have the money on hand.

There are a number of reasons why a passbook savings shouldn’t be used for much else, but they all boil down to one major concept: You don’t get a good return on your money in a savings account. This is true even with high yield savings accounts, in most cases.

So, how much should you have in your savings account? It really depends on your lifestyle. If you have debts that you’re working on paying off (and who doesn’t?), it really doesn’t make sense to have much more than $1,000 in a savings account, unless your lifestyle leads you to believe you are highly likely to have expensive emergencies on a regular basis. Frankly, it doesn’t do you much good to save money if you’re only going to shovel larger amounts of money out to the credit card companies.

Most financial experts recommend getting out of debt, of course. While they recognize the need for certain long term debts (like a mortgage), they recommend paying off personal loans and credit cards (along with their high interest rates) before building up savings.

Once you are out of debt, there is a wide divergence of opinion regarding how much money you should keep in a savings account. Advice ranges from 1 months’ income to 8 months’ income. Most experts recommend between 3 and 6 months’ income. Any more than that, and you should consider putting your money to work for you some place where it will earn you a better interest rate.

Now, if you only have a small savings account, you don’t really have much to worry about for a couple of reasons:

• The interest earned on small savings accounts doesn’t generally add up to enough to be taxable.
• Even if your interest is taxable, the amount of taxes you would need to make up on small savings accounts wouldn’t add up to much, if you did happen to get audited.

By small, we mean an account that earns less than $100 in interest in a given calendar year. If your account earns less than that, under current regulations, you can ignore the income from interest when you are filling out your tax forms. If you earn more than $100, of course, you will need to claim the interest earned as income and pay taxes on it.

Assuming you have a reasonably average interest rate of about 0.5%, this means that you won’t need to worry about paying taxes on your interest unless you have $20,000 or more in the bank. Of course, interest rates vary widely, so your best bet in determining the amount of interest you have earned is to check your statement at the end of the year.

We don’t know about you, but we figure it’s a bit of a travesty that you should be taxed on money when you’ve done the responsible thing and saved it. After all, you were already taxed on this money when you earned it in the first place. Being taxed again on the interest your money earns in a savings account seems a bit like overkill.

Think about it. The economy leaves us little enough incentive to save money as it is, yet banks need those funds on deposit if they are going to continue to offer financial services. So, wouldn’t it make more sense to create a situation that doesn’t unduly punish people for leaving money in a savings account? When you think about it, taxing as much as 28% of your interest taxes an already pathetic 0.5% APY and reduces it to a net 0.36% APY, after taxes. That’s not exactly motivation to save. Fortunately, we have representative government here, so if enough people get upset enough, this taxation on savings accounts can be eliminated.

There are several advantages to doing business with a local bank. These include:

• More personal service. Community banks typically offer actual face to face service in a traditional brick and mortar building.
• Vested interest in your community. Community banks and credit unions generally service a particular town, city, or region, and have a vested interest in the continuing prosperity of that area.
• Understanding of local issues. While banking with a local bank is no guarantee that a local disaster won’t force you to clean out your savings accounts, it does offer you the opportunity to do business with people who have their hands on the pulse of your local community, including its economic and other struggles.

Larger banks also offer a number of advantages, of course. For one thing, because they are considered too large to fail without having serious repercussions on the national economy, the federal government tends to back the larger banks in ways that small banks don’t enjoy. This drives down their operating costs.

While this undoubtedly causes an unfair playing field, it can benefit you if you bank at one of the larger banks. The fact that their operating expenses are mitigated somewhat by the federal government’s assistance can translate to slightly better yields for you.

Another option you may want to consider is online banking. Online banking cuts its costs by eliminating the brick and mortar structures and operating with a much smaller staff, proportionately speaking. The interest rates offered are often significantly better than even the largest traditional banks. Online banks are an especially attractive option for long term savings vehicles like CDs, IRAs, and high yield savings accounts.

Where to bank is, quite obviously, a personal decision. You have to weigh for yourself whether or not the interest rates of larger banks and online banks outweigh the personal service and community involvement of smaller, community oriented banks and credit unions.

There are several advantages and drawbacks to opening savings accounts overseas. Among the numerous advantages are:

• Tax advantages: While some in government are working feverishly to close loopholes for those saving and investing overseas, those loopholes still exist. Many countries, such as Belize, Panama, and Andorra don’t tax unearned income such as interest paid from a bank. Many other countries tax less than the United States.
• Confidentiality: While we don’t want to encourage skirting any government regulations which may come up either in the present or in the future, having funds overseas allows a certain amount of confidentiality. The government can certainly inquire, but most overseas banks are not going to allow foreign (ie, the US) interests or governments access to your information.
• Convenience: You can use ATM/Debit cards for most foreign accounts the same as you would with an account at an American bank.
• Higher Interest: While banking overseas does not in and of itself guarantee you a better yield on your money, it does open up a much wider playing field for your savings accounts, allowing you to do some comparison shopping for the world’s highest interest rates, instead of just the best in your city, state, or country.

Of course, banking overseas also has its share of disadvantages which must be considered. Before rushing out and opening up a savings account in Panama, consider these facts:

• Potential instability: Let’s face it, nations are not at all created equally when it comes to political or economic stability. While a place like Switzerland may be considered somewhat of a rock (having avoided war and economic collapse for well over 300 years), other countries are far less stable. Consider carefully what countries you want your money hanging around in.
• Language barriers: depending on where you choose to do your banking, English may not be your bankers’ native language. While this rarely presents a problem, especially if you are conducting most of your business online, the language barrier can be an issue if you have a problem which needs to be addressed. While virtually all offshore banks have English speaking personnel, anyone who has done business overseas knows that misunderstandings can easily occur.

Should you open up savings accounts or conduct other business overseas? That’s entirely up to you. In this day and age, it’s a viable option for the average person, though, and certainly worth taking into consideration.

1. Make Your Paycheck Count: This post is about ways of stretching your money and making your check last.
2. 8 Ways to Stretch Your Wallet Instead of Your Waistline: This helps to get a person on the road to physical and financial recovery. Some tips every money conscious person should live by.
3. Tips to Stretch Your Paycheck: This is a blog for nurses but this particular post has some great tips to help anyone stretch their paycheck.
4. Craigslist Help: Learn how you can stretch your dollar and make money by using Craigslist. You can also buy items for cheaper than you could in a store.
5. South America: Get valuable tips for stretching your money when visiting South America.
6. Live Healthy: Living healthy does not mean you have to spend tons of money. Learn how to make your dollar go farther while living a healthy lifestyle.
7. Find Deals: Follow this mom as they show you how to find the best deals on buying your everyday items.
8. Stretching the School Dollar: When children go back to school the supplies can cost a lot of money. Learn how to save through out the school year.
9. Rewards Program: Many retail stores and cards are offering rewards programs. They can save you big bucks when you consistently shop their stores.
10. Food Pantry: This is one way to make your food money go farther. Try using the food pantries or other stores that sale slightly damaged items. You can save money and get great food too.
11. Decorating on a Budget: You can redecorate your home on any budget. Get tips here on how to add pizzazz to your home without breaking the bank.
12. Stretch Your Dollar in South America: When traveling it is important to know how to get the best deals and make your money last. Here are a few tips when you are traveling to South America.
13. 15 Ways: Here are fifteen ways you can make your dollar go farther when you are an AARP member. Learn the tricks and tips that will make your dollar stretch.
14. Marketing Strategies: When trying to market your business try these great deals for less than a dollar.
15. Frugal Village: Stop by this sight for great tips on being frugal and saving money in every aspect of your life.
16. Halloween Costume: Get ideas on making your own Halloween costumes to help save money. There are really easy designs for anyone even if you do not sew.
17. Healthy for Less than a Dollar: Find out what the top 20 healthy foods are that you can buy for under a dollar. This is one way to make your money last longer and eat healthier.
18. Clear Distinction: One blogger talks about recession and a depression. Learn the differences and see how people react in both.
19. Car Maintenance: Get a few tips here on how to save in the long run when maintaining your car. Find out how you can cut costs without cutting corners.
20. Lunchtime Help: See how much money you can save by brown bagging it instead of buying your lunch everyday. You might be surprised at how much healthier you will eat and how much money you keep in your pocket.
21. Stretch Grocery Dollar: One blogger shares how she made five meals from three dollars worth of chicken. See her secret and how you can do the same thing.
22. Discount Food Programs: There are many places that are trying to reach out to the people around them. They are searching for ways to help them and stretch their money.
23. Cut Back: Learn how they are using apps to help those in Kenya. They had a big week when running a test run.
24. Taryona Travel: If this city is on your travel list, learn the ins and outs of saving money here. Learn how to get the most of your dollar.
25. Two Thrifty Sisters: Learn when these sisters are heading your way. You can get tips on how to save money and live more frugally but still having fun.
26. Tips to Save: Discover ways to save money in your everyday life. Learn little tips and tricks to save in ways you didn’t know you could.
27. Save on Skincare: Get a few tips on how you can save money on your skincare products.
28. Save when Eating Out: Eating out is something most families do a lot of when busy lives take over. Find out how you can save money and still get to eat out.
29. 20 Ways to Save: The first year of college can be pricey. Use these 20 tips to help you save money in your first year of school.
30. 10 Tips: One blogger shares ten tips with you for practical ways to save money. You don’t have to stop having fun and enjoying life.
31. Eat for $2 A Day: Learn how to eat for two dollars a day when you are working Monday through Friday.
32. Save Money on Airfare: There are ways to save money on airfare when you must fly. Find out tips and tricks to keep from spending too much money on your tickets.
33. School Supply Savings: The cost of school supplies can be high when buying for more than one child. Get tips here on how to save money when buying for back to school.
34. True Tightwad: Learn from this stay at home mom how to stretch your dollar farther. Get her tips and tricks for feeding your family and saving money.
35. Stretch Your Dollar: Get tips on how to make your money go further than before by cutting back in certain areas.
36. Traveling and Saving: You can still save money while traveling internationally. Get tips here before taking your next trip.
37. On the Road: Get this mom’s tips on how you can save money on your family road trips. You can have fun and save money at the same time.
38. Save while Traveling: You can save money and travel where you want to. Get the tips to saving money no matter where you travel to.
39. Frugal Living: Learn how to live frugally but still enjoy your life. There are ways to buy your favorite products for much less. Get the tips here from one blogger who does this and loves their life.
40. The Frugal Life: Living frugally does not mean you do not enjoy your life. It means you learn how to enjoy what you have and to save money at the same time.
41. Frugal Simplicity: This blogger shares their tips on how to live frugal. It has become a way of life for many in this economy.

Image Credits: SuziJane

1. Kids and Money Blog: Speaking with your children about money saving and earning during usual activities (i.e., dinner time, bath time, in the car) and they are more likely to remember the discussion.
2. Moneyinstructor: Discusses jobs and chores that  your child can do to earn money, and also speaks to whether your children are ready and able to work.
3. Gaebler: discusses fun ways that kids make money, either alone or with friends.
4. Weeno: work is hard to find and hard to do. Should kids have to do it?
5. CoachBrett’s blog: a personal blog of a financial tips for children (i.e., how to earn money and save it), written by a financial expert.
6. Moon Jar: A fun system using a piggy bank concept that teaches children to save money and even give money to charity.
7. Budget Pulse Blog: Using inclement weather to make money with a fun job!
8. Kidpreneurclub Blog: This blog will tell stories of ways kids and teens have made money by starting a business before they turned 18 years old.
9. Unusual ways to make money: Various ways that children can earn money from cold drink stands, to crafts and even online blogging.
10. Susan Beacham Blog: Learn how to discuss money with your children and help them  find creative ways to earn it . Author is a professional financial analyst and parent.
11. Make Use Of: All about using a child’s natural skills to help them make money.
12. Money & Kids: Learn money management tools that both you and your children can benefit from.
13. Kids Money: This website was made by kids for kids to discuss how to get jobs and what to do to earn money.
14. Sweet Money Secrets: Teaching a child to start their own business
15. Millionaire Kids: Presents a book/program that many children have used to earn money online.
16. Prosperity for Kids: A fun site with games, tips, and books parents can buy to teach their children about saving money.
17. Basic Affiliate Marketing: Top online prospects for kids wanting to make money online.
18. India Parenting: Although, a foreign blog, it has helpful tips about broaching the difficult subject of saving with your children.
19. Personal Dividends:  Children as young as 3 years old can learn how to save money, and this article walks parents through how to teach children from 3 to 18 years of age how to save money.
20. Family Education:  Games and activities to teach your children about saving money. Have a weekly program to teach one lesson a week.
21. Kidzworld: Teen blogger gives advice about how to start saving money, and how fun it can be.
22. Budget Planner: Teaches children good personal finance information (i.e., balancing their money, saving money and giving to charity), with a  focus on saving for college.
23. Moola Days: This article focuses on 16 year olds and how they can pay for their own car and car insurance after they start driving. Lists jobs that this age can do both in retail and as entrepreneurs.
24. Show Kids the Money: Instructions for kids to start their own business and how to get to get profits quickly.
25. Free From Broke:  Chip systems have been shown to be successful in teaching younger children how to budget their money.
26. Athealth: An article discussing the ten best lessons to teach your children about money.
27. Internet Based Kids:teaches children how use internet marketing to make money online.
28. Jobs for 14 year olds: A website that compiles many different sites, forums and blogs for teenagers looking to make money.
29. Blogstash: this site tells kids 13 and older how they can make money doing surveys and shopping online.
30. Christian PF Blog: a very comprehensive list with a variety of jobs for “mature and responsible” teenagers.
31. Teen Freeway: A website featuring several other sites that teens can to learn about making money. From writing books to surveys, there are several different types of sites they can visit.
32. Courtney Tuttle Blog: this article is written in the perspective of a teen making money to pay for their own car insurance. It does list a variety of different types of jobs a teen can do.
33. Pay Jr: Important lessons that every parent should teach their kid about money. Includes opening savings and checking accounts and about credit cards.
34. Chores and Allowances Blog: Blog by a parent who discusses children doing chores in the family household to earn money.
35. Ways For Kids to Earn Money: Written by a teenager who tells about her experience of making money doing an internet business.
36. Military Money: lays out the different developmental stages and what a child can learn about saving money in each stage.
37. Moolanomy Blog:teaches the four pillars of money management :making money, spending money, saving money, and giving away money.
38. Money Saving Mom: a mom not only discusses coupons and bargain shopping, but also discusses how to get your child involved and how they can use their own money and shop frugally.
39. Universal Preschool: A preschool site that discusses preschoolers eagerness to learn, and how they are ripe age to start learning to save money.
40. Blue Suit Mom: A working mom’s guide to teaching their young children to s
41. Digerati Life: Focuses on teaching children better money saving skills then we learned, and how to assist them in not making the same monetary mistakes we have made.
42. Financial Cents: Teaching children to earn, donate, and save money will make their future more promising with a brighter future ahead. Article by professional financial planner.
43. Family Lobby: coming for a perspective of parents, how to teach your child to be responsible with their money and budget for things that they want.
44. Love to Know: Discusses allowances and part-time jobs for teens, and teaching them to open savings accounts and how to manage them well.
45. Simple Marriage: coming from the perspective that children learn by modeling what their parents do, subsequently parents must model the money management techniques they want their children to learn.
46. Moneyning: Effective ways to teach your children about saving money, and avoid them hating you in the process.
47. Free Shipping: Focuses on using teachable moments to establish good savings habits in children.
48. Kids Finance: an article about giving your child allowance and how to encourage them to save it.

Image Credits: swimparallel

The previous century has seen the financial industry grow in leaps and bounds. The common man now has myriad options available for the safe keeping of his money. One needs to exercise prudence while opting for Savings Accounts such that one gets the best interest rates, while being offered the best possible category of Savings Accounts. These factors range from whether one needs to have instant access to the money to how much tax an individual pays.

Generally Savings Accounts can be classified into five broad categories

1. Easy Access/ No Notice Accounts
2. Notice Accounts
3. Bond or Term Accounts
4. Regular Savings Accounts
5. ISA and Tax free Accounts

Easy Access or Instant Access Accounts

For people who need unfettered access to their savings accounts, as many times as they wish within a stipulated time without having to pay a fine or having to serve a notice, this type of savings account is the most suitable. This serves the dual purpose of saving money while having the option to withdraw according to their wish. The only drawback in this savings account is that the interest rate offered is less in comparison to the other types of savings accounts.

Notice Accounts

These types of savings accounts are losing precedence to instant access savings accounts nowadays due to competitive interest rates offered by the banks. Although they offer better rates of interest, an account holder has to give a notice, dependent on the amount of money to be withdrawn in order to avoid a financial penalty.

Bonds or Term Accounts

This type of account is preferred by customers who wish to earn a high interest rate on their savings for a certain period of time. These accounts are created by depositing a certain amount of money that cannot be added to or withdrawn before a stipulated period. If withdrawn before this maturity period then the customer has to suffer a financial penalty.

Regular Savings Accounts

These types of savings accounts are targeted at people who deposit money at regular intervals without any urgency to withdraw it intermittently. There are also a certain fixed number of deposits and withdrawals per month. They provide superior interest rates than the other types of savings accounts and often pay an annual bonus over the payable interest.

ISA and Tax free Accounts

Residents of UK, whose income is tax payable and above the age of 16 are eligible for opening an Individual Savings Account (ISA). The individual can either choose to save in an ISA or invest in ISA equity. The returns are exempted from different taxes. There is a maximum deposit that one can make in this account, after which further deposits are not allowed but withdrawals can be frequently made. Although interest rates can be less than regular savings accounts, after tax ISA accounts are extremely sought after.

The most remarkable quality of rodents, that make them such a resilient species is not their ability to make hay while the sun shines, but for saving it for a rainy day. Money is like loose sand in a closed fist. No matter how hard one grasps, it still manages to trickle out. Keeping that in mind it is always an astute idea to save for days when one is not flush with money. Unlike the days of yore when people used to hoard their homes with money, nowadays there are financial institutions like banks, credit unions and money market funds at the nearest corner providing a safe depository for one’s hard earned money.

The most elementary visualization of people about banks is that of Savings Accounts. A Savings Account is a type of an account that holds money which one doesn’t need immediate access to. They are more liquid than treasury bills and certificates of deposits but less than that of demand accounts. Although they offer the advantages of offering better interest rates than checking accounts but they should not be utilized as long term saving options. Savings Accounts are easily accessible with a visit to the local branch, or the automated teller machine or over the Internet.

This is the safest way of saving money as under the Federal Deposit Insurance Corporation, all the money in savings accounts is insured so that consumers do not suffer from an insolvency of the bank or the credit institution. This was established as a precaution against the improbable eventuality of a financial collapse as experienced during the Great Depression of the 1920s. Nowadays most banks and credit institutions are insured by FDIC.

Interest earned in Savings Accounts vary from banks to credit unions. As both of them run on different principles, banks are commercial enterprises while credit unions are generally non profit organizations that cater to a specific group of the population. Therefore while loans can be availed at credit unions at lesser interest rates, interest gained on savings accounts are also significantly lower.

There are generally two types of savings accounts-> Basic Savings Accounts and Money Market Accounts. The Basic Savings Account usually demands a lower fixed deposit, but also with lower interest rates. However it offers the option of withdrawing money several times in a month. In Money Market Account there is a higher fixed deposit but unlike savings accounts they offer better interest rates. But on the flip side there is a limit to the number of withdrawals in a month.

The financial world has seen the evolution of a number of financial instruments over the years, but the popularity of the Savings Accounts have not waned with time. They have become the quintessence of the banking industry with a simple motto – Deposit the money and watch it grow.

Today the financial industry is within reach of the common man through the revolutionary technology of the last century, the Internet. With online share trading in vogue these days, the financial world is not limited to an egalitarian cream of the society. One can either choose to invest and trade shares using the online stock trading or can save his hard earned money in Online Savings Accounts. The early 1990s saw the emergence of completely online banks without the presence of any brick and mortar branches. There has been a remarkable increase in their numbers in the current decade. With most of these institutions being FDIC insured the customers have their money secure from any financial mishap.

Online Savings Accounts generally don’t have any minimum balance and offer better interest rates compared with regular savings accounts. They also offer the facility of linking the online account with normal bank accounts for easy transfer of money between these accounts. Customers can also avail the option of ATM cards for the withdrawal of money. With the financial recession of the past two years coupled with economic indicators such as inflation and market stagnation, people are veering away from traditional saving and trading instruments and are considering cash to reassess their stock portfolio and reassure their risk tolerance.

In the light of increasing interest rates, Online Savings Accounts have made liquid cash an extremely viable investment option. With the prevailing unhealthy investment climate, Online Savings Accounts are beneficial for people with a low risk tolerance and who want to earn a decent interest off their savings. 2005 saw 8.5 million customers opening online savings accounts in the USA alone and it has increased to an outstanding 400 million in the past four years.