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Comment by colinbartlett | Hacker News Reader

My "high interest" savings accounts already took a recent haircut and this will accelerate that. I understand that's the idea: make investing attractive and savings unattractive. But for a regular joe like me, this is exactly the time I want to be saving more so it stings.

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I moved some of my high yield savings account into a 12 month CD recently to maintain a more tolerable interest rate for the next 12 months while the savings account interest rate inevitably tanks. That means I can't touch it for 12 months if I want the interest, but I was careful with the amount I put in the CD so that I will most likely not have to touch it.

This should in no way be construed to be advice because I'm unqualified to give it. It's just an option.

Some banks have “no penalty” CDs that allow you to close them in the event that you need the money without taking a hit on any accrued interest. And this can happen as early as 7 days after opening the account. So the risk is very low. They’re slightly less yield than regular CDs, but not much.

A really good option during this time. My bank actually sent an email prior to the last interest rate drop, and I moved most of my savings (that I didn’t think I’d need to touch for a year) into an 11-month CD before the rates dropped.

you can also get 4-5 smaller CDs (whatever smaller means for you) so if you did need some funds, you wouldn't have to lose all of the interest.

This may well be a good time to buy low. Take the interest rate hit for a few months and be happy you have cash on hand when opportunity knocks.

What do you think is the difference between saving and investing??

Saving is preservation of capital whereas investing is growing capital. At least that is my take.

Ok, but parent is lamenting that "saving" pays less than "investing". You're saying that's implied by the (or your) definition so it seems like it would go without saying.

It's not that saving pays less than investing; it's that it's paying almost nothing right now. Savings account interest rates are terrible, which is very frustrating if you want to have some cash reserves.

I'm not going to put my 6 month emergency fund or the downpayment for my future house into stocks and ETFs; they're too risky. It hurts to keep it in a savings account paying less than 1% though, which is the alternative.

> "saving" pays less than "investing"

It does, except for when cash performs better than equities (like during a bear market).

Saving is normally expected to be minimal-risk preservation of capital, whereas investing risks capital loss (alongside hoping for capital gain).

Yeah, a person could distinguish them this way, but you're using the passive voice. Who habitually uses the words in this manner consistently, in what contexts?

Saving is for the proles, investing is for the oligarchs.

Your savings account will not drop 25% in one week unless you withdraw from it.

A savings account is a form of savings, but this is the first I've heard of people considering it the only form of savings.

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