Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar. Soon she has the largest sales volume for any bar in Detroit

By providing her customers’ freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi’s gross sales volume increases massively. A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi’s borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don’t really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar. He so informs Heidi.

Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since, Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Heidi’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi’s bar.

Now, do you understand?

With inflation typically around 3% per year, a low interest rate means depreciation in the value of your savings with the passing of time. The following information will get you started on finding best savings accounts with good rates.

The internet is one the best places to begin searching for savings accounts. At fivecentnickel.com there is an online rate finding tool. Simply type in the amount you would like to invest, the type of account you want, and you will receive a listing of several different savings accounts with their interest rates.

At money.co.uk, there is a similar tool (http://www.money.co.uk/savings-accounts.htm) that will give you information on various investment vehicles including various ISAs, bonds, and several types of cash savings accounts.

Interest rates are unfortunately low due to the current economic climate. Rates above 1.50% are decent, but getting above 3% is rare without looking into stocks or bonds. Individual Savings Accounts (ISAs), which combine stocks and bonds, will commonly have interest rates ranging from 2% to 6%; however there is more risk involved than in traditional cash savings.

Another good investment vehicle is a fixed-term bond account. These accounts have rates between what you would find for a bank savings account and an ISA, ranging from about three to four percent.

The most important consideration in choosing between these types of accounts is the length of time you plan to invest over, and how much access you need to your savings. Choose ISAs or bonds for longer periods of time, cash savings accounts for short-term savings goals.

For those who are unfamiliar with the process of online banking and investing, the following information should be enough to get you started.

The first step in getting started with online savings is finding the right account. There are many websites that list these accounts and will compare interest rates, fees, and minimum balances. One such website for companies in the UK is Find.co.uk. Here you can not only look up savings accounts, but there are resources available if you are searching for information on anything financial (credit cards, mortgages ect.).

For a wider search, FiveCentNickel.com is an excellent resource for comparing savings interest rates. Located in their savings section is a “Money Rates” tool where users can type in the amount they will be investing and the tool will compute a list of savings accounts along with their interest rates. It is important to find an account with an interest rate comparable to inflation (typically 3%).

Accounts like these are easy to open, usually requiring contact information, a national insurance number, and bank account information for transfers. The first step is to visit the company’s website. Near the top there will be a link that says “Open New Account.” Click on this link and the site should take you step by step through the entire process.

Look for a company with a website that is easy to navigate, has good interest rates, and minimal fees. This won’t be difficult to find, and with a bit of research anyone can use the web to begin saving for the future.

Before going out to find that saving account, analyze if you have any outstanding debts. You should not consider opening one if you have credit cards with high interest rates the same goes for anyone who has a mortgage.

An ISA account is also a good way of generating savings so; if you have not opened one consider doing it first before embarking on a savings account.

If you save for a consecutive twelve-month period without withdrawing your cash then the interest rate is higher and you end up saving more. You should ask yourself if you willing to lock your money away for that length of period.

In case of a deflation in the market, if you are banking with the UK regulated bank or the building society account; you are protected by the Financial Services Compensation scheme. However, you have to make sure that you make claims for compensation in the eventuality that the bank might collapse.

Though you cannot be guaranteed on the best saving accounts there are key pointers you have to look for. One of them is if they have any withdrawal limits and penalties. You should note that there are accounts that limit withdraw made in a year and others that will not pay your interest rate if you withdraw cash.

In addition, you should note that there are some banks, which will advertise high interest rates to attract customers then later bring it down. You should keep a keen eye on the fluctuations of your interest rate to ensure that you are not getting less than you bargained for.

It also offers higher interest rates depending on how much you save in your account. This account is ideal for people who want to save for property purchase as well as people who are spendthrifts since it instills disciplined spending.

A high interest savings account is ideal for people who have a lot of money since the greater the amount of money saved the more the interest and therefore it is a worthy investment. It works like a fixed deposit account only that you do not have to deposit fixed amounts in this type of account. Such accounts are given by the banks when the banks want to maintain a certain credit level for a certain period.

The most important characteristic of a high interest savings account is that it has a target that is given depending on the initial amount that you save. When you continue saving into the same account, your interest increase and you can move your targets higher. The target is aimed at assisting you to save more and more. This is a great way of reducing expenditure.

A high interest savings account is also ideal for the people who are in business since they can consolidate their savings that proves hard when there is a constant cash flow.

These accounts prevent impulse expenditures for people with a lot of money since the money is retained in the account while the owner strategies on economical ways of investing the money. This account is a great way of investing your savings safely since investing in a bank reduces the risk.

Prior to opening a savings account, the consumer should be sure to properly compare savings accounts. When comparing savings accounts, the consumer should consider the interest rate, if there is a minimum balance, and the accessibility of the accounts.

The first consideration the consumer should take when comparing savings accounts is to consider the interest rate. In today’s economy, interest rates on all lending products, including CD’s, money market accounts, checking accounts, and savings accounts are very low. While rates are very low, there are still banks offering high savings rates compared to other lenders.

The consumer should be sure to select the savings account which offers the highest rate because, over time, this will lead to significantly more interest income received.

The next consideration a consumer should take when comparing savings accounts is to consider the minimum balance. A minimum balance on a savings account can range from $0 up to over $50,000. Generally speaking, the higher the minimum balance is, the higher interest rate is.

The consumer should be sure to select an account which has a minimum balance requirement that is low enough to meet the consumer’s needs. If the consumer’s account balance falls below the minimum balance, they run the risk of being charged fees.

The last consideration the consumer should take when comparing savings accounts is the accessibility of the savings accounts. There are many online savings banks which offer slightly higher interest rates, but since these accounts do not have in-person branches, withdrawing funds can take longer.

Certain savings accounts come with debit cards which allow for withdrawals from any ATM.

If you have been looking for best savings rates I suggest you go for a fixed rate bond. It is great when it comes to best and top interest rate but it has one down side that is your funds are no more in your control and are tied for a fixed period. You can use those fund until that bond matures.

You need some homework and discipline and make sure that you have funds for your emergency cash needs, and invest only the funds which are spare and you can leave them in fixed bond account without any need to withdraw those funds.

So you get benefit of best savings rates but you also get disadvantage of forgoing your right to use those monies for a fixed period say year or more.

For those new to banking, a savings account is not the same as a checking account. They share some similarities, but at the core they are different.

In general terms, a savings account is a type of account that you can open at a bank or credit union. With this type of account, you deposit money into the account and leave it there in order for it to earn interest. You can, of course, take the money out of the account, but that defeats the purpose.

A savings account is a great way for some people to save money and to earn some interest off of that money. It is especially useful for those individuals who have limited amounts of cash to put away. Young people, especially younger married couples, often find that opening a savings account is the best way for them to save money. The reason for this is simple. Unlike some other types of investments which demand a certain amount of money be deposited or maintained at all times, a simple savings account allows you to deposit whatever you like, whenever you like.

Another reason a savings account is handy for those with limited funds is that the money you deposit into the account can be withdrawn immediately if you need to get it. Again, some other types of savings or investments instruments are not this fluid. Most savings accounts allow you to use the ATM as well, which offers even greater access to your money should an emergency arise. This is simply not the case with other types of accounts such as certificates of deposit or money market accounts.

Savings accounts are also safe for your money in two ways. No one should keep large amounts of cash at home; that is simply dangerous to do. The money could be stolen or if there were a fire, the cash could be destroyed. In both cases, you would completely lose your money with (probably) no way of getting it back.

The second safety feature that savings accounts have is that money that is deposited into a bank is protected by the Federal Deposit Insurance Corporation (FDIC) for up to $100,000. If the bank is robbed or the bank burns down, you will still have your money. Even if the bank files bankruptcy, your money is safe.

When you are ready to open a savings account do some homework first. You want to find out which banks are offering the best interest rates and deal with those banks. If you belong to a credit union, you may want to ask them what their rates are. Credit unions are more competitive today with their savings account rates than they were some years ago, so it is worth asking as they may offer a higher rate than the bank. You should also look into the minimum amount of deposit required to open a saving accounts. Some banks and credit unions require a certain amount be deposited the first time in order to set up the account.

About The Author: Peter Kenny is a writer for The Thrifty Scot, please visit us at http://www.thriftyscot.co.uk/Banking-Savings/bank-charges.html and http://www.loansubmit.co.uk/debt-consolidation-loan/