Money in One Chart

where money goes

Where your cash sits is deciding, every month, what it earns.

Interest checking pays 0.07%. Savings pays 0.38%. A good online account pays 3%. The money does not know the difference, but your balance does.

You asked for the account map. It is below, as the slides from the post, then the one move, then the tool the chart points at.

Slide 1 of 7: Where your cash sits is deciding, every month, what it earns.Slide 2 of 7: Five places your cash can sit, and what each one pays.Slide 3 of 7: $5,000 sitting in interest checking earns about this much in a year.Slide 4 of 7: People keep the emergency fund in checking because it is close, and close is exactly what checking is for.Slide 5 of 7: Rates change, but the rank order between these accounts has held in every rate environment.Slide 6 of 7: Give each account exactly one job.Slide 7 of 7: Save this for the next time you check your balance.

Give each account exactly one job.

  1. 01
    Checking holds one month of bills and nothing more.That is what it is for.
  2. 02
    A high-rate savings account holds the emergency fund.One to three months of expenses.
  3. 03
    Everything above that does not belong in a bank account.That is the investing pillar, and it starts on the next post.

The tool this chart points at

A high-yield savings account

FDIC-insured, no monthly fee, no minimum balance. Where the emergency fund lives.

Open it

This link may pay Money in One Chart a referral fee if you open an account. Your price does not change. How that works.

Sources: FDIC National Rates and Rate Caps; Ally rate page; Arithmetic on the rates above.

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