Should I take a loan for savings?

[CUJoe28]

Hey all,
I just found this forum and am hoping someone can lend me some guidance with a savings opprotunity I am considering. Ive tried to run the numbers myself, but have been having difficulty. My situation is as follow:

I want to borrow $10,000 at an interest rate of 2.24%, the term can go up to 72 months.
Those funds will immediately be put into savings account #1 that will generate 2%.
Each month I will move $500 into savings account #2 that will generate 3%. ( i can only move $500/mo)

My question is whether this would be beneficial and how long I should term the loan for. I have the money to make the monthly payments, so the funds from the loan will solely be used to move into the savings account to generate 3% for future savings.

Any help with the numbers would be greatly appreciated. Please let me know if additional information is needed.

Thank you,

[creditcardfree]

Which bank will give you 2% interest? I want to invest!

[autoxer]

What is the opportunity? I dont see one.

[lorraineb]

Why? It seems like a hell of a lot of work for very little. You could spend you time in other ways and do much better.

[feh]

Why? It seems like a hell of a lot of work for very little.

This.

[disneysteve]

I want to borrow $10,000 at an interest rate of 2.24%

Those funds will immediately be put into savings account #1 that will generate 2%.
Each month I will move $500 into savings account #2 that will generate 3%.

You do realize that in doing so, you will be LOSING money each and every month. First, the money would be parked in an account earning 0.24% less than the interest you are paying. Second, the interest you earn is taxable so your net, even on 3%, is only about 2.25% (and less on the 2% earnings).

There is simply no way that this makes you a profit so I don't understand why you would be considering it.

In the past, I have done a variation of this but it was back when interest rates were higher and I was able to do a cash advances from my Discover card for a small fee, deposit the money in a 5% money market for 50 days, and then repay it. I made hundreds of dollars doing that.

[bjl584]

Skip this idea. When interest rates go back up, then revisit this plan.

[Baby_nurse]

What is the opportunity? I dont see one.

[woodie96]

Why not simply put the money you had planned on sending to the bank in payments, in the savings account to start with.

The .24 percent you would be losing in the amount of time it would take to turn a profit at 500 a month to only .76 wouldnt make it worth it.

It would seem better to me to just put money in the savings account.

JMHO

[snafu]

You didn't mention your age. I suggest you look at an automatic DCA [Dollar Cost Averaging] in low cost, Index funds split 70% domestic 30% international with the specifics age dependent. Over the years you hardly notice the money outflow and be prepared for the valuation to roller coaster with the economy. You are buying more units when the economy is troubled, less units when the market is strong. We look at 2008 as 'sale priced.' Friday was the highest ever DOW.

[woodie96]

Snafu...Thats the way I explain it to my wife often...."look honey, it's on sale this week!!!"

[leaderscorp]

I also want to know where you will deposit your money. That 2% interest looks interesting.