The smaller investor or possessor of a savings account has really very few alternative employments for his fund of savings. He can either put it into the stock market, including the mutual funds, or he can put it into the sav ings bank. In the stock market he has the hope of a big gain. But in all probability his fund of savings was not easily acquired, and the effect on him is devastating when the stock market or the particular stock he owns goes into a decline.

On the other hand savings accounts yield him very little. A savings account of $10,000 at 3% yields him exactly $300 a year, and this does not seem to him to be a very significant return when he considers how hard it was for him to accumulate the $10,000, particularly since he had to pay taxes on his income before he could save the $10,000. Even a fund of $100,000 yields him only $3,000 per year, or $250 per month, and this return is probably not very significant in relation to the income of a man who has been able to accumulate a savings or investment account of $100,000. Investment - Read More.