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Hi,

What is the best way to save for a year to buy a car? Can I invest in stocks or rather just use a savings account?

Is this a good time to buy a car as it's possible that self-driving cars/taxis might be the future in just a few years?
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The stock market can go up and down rather easily. Its not an appropriate place to save for a purchase that is only 1 year out. money market funds, savings accounts, etc are probably good vehicles.

The question of if it is a good time to buy a car primarily depends on your transportation needs. If you are commuting (arbitrary) miles a day, a rural area, and/or doing lots of long distance trips, a self-driving taxi is unlikely to be a good fit for what you need. If you are in an urban area, with lots of existing transportation options, and don't drive a lot anyway, waiting a year or two for more driver assist technologies to mature/be deployed might make sense. Having said that, I'm pretty happy with the technology already present on our 2 year old Toyota.

As for the "self-driving" - for liability, technology, and regulatory reasons, I think that's 5+ years for widespread adoption. And due to the size of the US vehicle fleet, it will be a very small percentage of overall vehicles for many years after that.
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The fact that you need the funds in a year make stock market investing problematic. Better to use a savings account to be sure the funds are available when you need them.

As to self driving cars, it depends on where you live. In the Midwest, we can rest assured they will take at least five years to get here after they have had successful runs in other areas. Experiments are going on in Pittsburgh, Arizona, and California. They seem to be having problems.

Some say self driving trucks are likely to be on the road first as long distance driving on interstates is more predictable, there's a shortage of drivers, and long distance is boring/hard to staff.

Give 'em 10 years. Probably longer than the service life of the vehicle you buy this time.
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I strongly suggest you keep the money in a safe rather then in a savings account. A lot of saving accounts actually cost you money per month rather then save you any unless you maintain a minimum balance.

Check with your banking institution to see if they have a free savings account for the minimum that you will start it out with. Then when you go to buy the vehicle close it out to avoid new monthly charges that will most likely start to happen when you reach a "low" balance.
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I strongly suggest you keep the money in a safe rather then in a savings account. A lot of saving accounts actually cost you money per month rather then save you any unless you maintain a minimum balance.

Can you please find me just ONE example of a savings account where putting your money in a safe for a year would be a better option?
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I strongly suggest you keep the money in a safe rather then in a savings account. A lot of saving accounts actually cost you money per month rather then save you any unless you maintain a minimum balance.

Not sure where you bank but "a lot" is not true.

https://www.depositaccounts.com/savings/
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I strongly suggest you keep the money in a safe rather then in a savings account. A lot of saving accounts actually cost you money per month rather then save you any unless you maintain a minimum balance.


Barclay's Online banking has a savings account that pays 2.2% with no minimum and no maintenance fees. I imagine there are other online banks with similar accounts. It won't make you rich, but it is better than nothing.

If one is comfortable dealing with an online bank, that would be much better than putting it in a safe.
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Can you please find me just ONE example of a savings account where putting your money in a safe for a year would be a better option?
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Wells Fargo's Platinum Savings Account will cost you $12 per month in service fees if you do not maintain a $3,500 minimum daily balance
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"Wells Fargo's Platinum Savings Account will cost you $12 per month in service fees if you do not maintain a $3,500 minimum daily balance"

If you can't maintain a $3,500 minimum balance, you don't really have a savings account.

RayB
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Can you please find me just ONE example of a savings account where putting your money in a safe for a year would be a better option?
`````````````````````````````````````````````````````````````````````````````````````````````````````

Wells Fargo's Platinum Savings Account will cost you $12 per month in service fees if you do not maintain a $3,500 minimum daily balance
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So using this example, if the original poster opened an account with $500 and deposited $500 monthly, it would take 8 months with service fees of $96 and then 4 months of no service fees before using this money for a down payment on a car.

Not sure how much interest that money would typically make in those 12 months, but I'm pretty sure it would be less then the money withdrawn by the bank for the service fees. So scenarios like this, you would be better off putting that money in a safe for the 12 months.
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Thanks everyone for the ideas and reply.
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Can you please find me just ONE example of a savings account where putting your money in a safe for a year would be a better option?
`````````````````````````````````````````````````````````````````````````````````````````````````````

Wells Fargo's Platinum Savings Account will cost you $12 per month in service fees if you do not maintain a $3,500 minimum daily balance
`````````````````````````````````````````````````````````````````````````````````````````````````````

So using this example, if the original poster opened an account with $500 and deposited $500 monthly, it would take 8 months with service fees of $96 and then 4 months of no service fees before using this money for a down payment on a car.

Not sure how much interest that money would typically make in those 12 months, but I'm pretty sure it would be less then the money withdrawn by the bank for the service fees. So scenarios like this, you would be better off putting that money in a safe for the 12 months.


ok, you found one...in hindsight I guess I didn't set the bar very high. On the very same page from Wells Fargo that you find that account, you also find a savings account with a $5 fee that is waived with a $300 daily balance.

So I guess if you were financially ignorant enough to only find the account with a $12 fee your option of putting it in a safe would be reasonable...but then what about remembering the combination if you are that bad with numbers?
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How about short-term CDs? Eg, buy a 1-year CD with your initial amount and shorter term CDs as money comes available.

You won't need to save as much if you buy a used car, perhaps one just off lease that was well cared for?
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So scenarios like this, you would be better off putting that money in a safe for the 12 months.

No, in your scenario, you choose a different bank.

PSU
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The fact that you need the funds in a year make stock market investing problematic. Better to use a savings account to be sure the funds are available when you need them.

I'd qualify this a little by whether it's a need to buy a car in a year, or just a general plan to save towards buying a car. If the OP has a perfectly adequate car, but is just interested in savings towards the idea of buying something new (self-driving?) in the future, putting those savings in the market may be just fine - IF he's willing to risk deferring the purchase if the market goes south.
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So scenarios like this, you would be better off putting that money in a safe for the 12 months.

No, in your scenario, you choose a different bank.

PSU
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Just to be clear, this is not my scenario, I was challenged to find such a product on the market by another fool and that's exactly what I did.
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Is this a good time to buy a car as it's possible that self-driving cars/taxis might be the future in just a few years?


Would you WANT a self driving car?

xtn
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Can you please find me just ONE example of a savings account where putting your money in a safe for a year would be a better option?


What is "better" depends on what qualities/properties you prioritize, doesn't it?

If you value earned interest above all else, then of course savings accounts are generally better than a safe at home.

But what if you value immediate liquidity instead? I have some amount that will never make it out of my safe at home into any bank account. It's the minimum amount I want to have on hand if, for example, power goes out across my town for several days, or whatever other mini catastrophe/inconvenience strikes. For that amount, I value immediate liquidity more than paltry interest returns.

xtn
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Just to be clear, this is not my scenario, I was challenged to find such a product on the market by another fool and that's exactly what I did.

To be really clear, the challenge was issued after you warned about money in the bank being more costly than stuffing it under a mattress. That poster likely issued the challenge because he was thinking about normal banking accounts held by the majority of people. He didn't consider you would find some high balance, high fee account.

In the end, the advice remains the same - find a different bank.

PSU
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