Hatrack River Forum: Best high-yield savings account?

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Posted by rollainm (Member # 8318) on :

I'm getting full access to my trust fund in March (many thanks to my late grandmother), and I'd like to put a good chunk of it into a high interest account. It will most likely remain untouched in said account for some time, but I'd prefer to have it easily available penalty-free should the need arise, so an account with a realistic minimum balance and fast on-line transfers would be ideal.

Do you guys have any advice or suggestions? Would, say, eloan's savings account be considered a good choice?

Posted by ketchupqueen (Member # 6877) on :

I dunno about eloan, but we're loving ING. They even have checking that generates intrest-- so you can, say, keep $50-$100 in there, and then if you want to pay for something with their ATM/debit card, make a transfer from the higher-intrest savings to checking and have the funds immediately available.

Posted by rivka (Member # 4859) on :

quote:
Originally posted by ketchupqueen:
we're loving ING.

Ditto.

Posted by Lyrhawn (Member # 7039) on :

HSBC is where I have my account. It's interest rate is like three or four times higher than the yield at my credit union, though thanks to the fed cutting rates, my interest rate has gone down a point in the last month. I think it's at 3.55% now, down from 5.15% a couple months ago, but, that's the recession for ya.

You can get an ATM/debit card through them, there's no minimum balance, they also have the checking account that has a decent interest rate, with instant transfers. Bank to Bank transfers take a couple days, and I've never had a problem with them.

I've heard good things about ING, but have no experience with them. From what I just checked, it looks like ING's rate is 3.4%, so at that point it's close enough that whichever you like better is just personal choice. Whoever you choose, make sure they are FDIC insured, as HSBC and ING accounts are, so that if anything happens your money is guaranteed.

ING & HSBC

Posted by Shanna (Member # 7900) on :

Etrade is at 4.40% right now I think.

Posted by rollainm (Member # 8318) on :

Thanks.

Hmm...eloan offers better interest, but having an ING checking account for immediate transfers sure sounds convenient.

Question: How do these on-line companies offer such high interest compared to brick-and-mortar banks like Wachovia? I know being paperless reduces some cost, but is it really that much? Am I missing any catches to going with the higher interest accounts? I'm just wondering why anyone would choose to go with BoA, Wachovia, etc. when there are much better options out there.

edit: Thanks Lyrhawn. Checking out HSBC now.

Posted by Lyrhawn (Member # 7039) on :

You answered your own question [Smile]

It's the bricks and the mortar that cost the money. Online savings accounts don't have to actually run actual banks, which cost money, they just collect it online and lend it out, which gives them drastically reduced operating costs. It's enough to bump your rate return up a couple points.

Some people like dealing with a flesh and blood teller, and I'm one of them, which is why I still cash all my checks at my local credit union, and I use my high interest savings account to store money long term. I keep a small amount of funds in my local bank for purchases in between paychecks (even that I don't have to do since HSBC has an atm card and debit card), but the small bank feel and the fact that they know me and are more likely to lend me money is nice too.

Posted by rollainm (Member # 8318) on :

Thanks. Yeah, that's what my gut told me, but I guess I needed some reassurance.

HSBC is looking really good, actually. I may open an account tonight. [Smile]

Are there any penalties for closing my Wachovia savings account? Is there any reason to keep it open? I will definitely keep the checking account (my paycheck is direct deposited into it, and then there's my Visa Extras points), but I'm not seeing any reason to keep the savings.

Posted by Lyrhawn (Member # 7039) on :

You might want to call them or just stop in and ask. I'd be surprised if there was a penalty for closing your account, it's not like when you pay off a loan early and pay a penalty, but I'd double check to be sure, I don't know off the top of my head.

Another thing I like about HSBC is the security when you're signing on. You have to enter a code on your computer, and then you have to enter a seperate code by clicking on a virtual keyboard, so you can't copy/paste the code into the screen. I think that makes it harder to hack or for someone to break in when they don't know it. Even if it's not safer, it FEELS safer, so I go with it.

Posted by rivka (Member # 4859) on :

ING has that same security setup.

Posted by ketchupqueen (Member # 6877) on :

Yup. And a picture-recognition thing to prevent spoofing of their page.

Posted by ketchupqueen (Member # 6877) on :

I would check the terms of your different Wachovia accounts. I know we have to keep $0.01 in our savings at WaMu (which is what we do) in order for our checking to remain free.

Posted by ketchupqueen (Member # 6877) on :

(The reasons WE keep an account with a brick and mortar bank are that we don't like depositing checks via ATM if we can avoid it-- we've had them go missing in the past, not often but even once is a pain-- and while my husband's pay is direct deposited we get the occasional check to deposit from other sources, and that we like having a bank where they'll waive fees for cashier's checks and money orders because we're customers.)

Posted by anti_maven (Member # 9789) on :

I have an ING "orange" account here in Spain, and it's great. Good interest and easy banking. The only down side is the raft of mail you get every time they bring out a new offer.

My current acount is with a local co-op bank, the Kutxa, who have to be the most efficient bank I've ever had the pleasure to to business with*

*I have to say this, they own half my house [Wink]

Posted by rivka (Member # 4859) on :

quote:
Originally posted by ketchupqueen:
Yup. And a picture-recognition thing to prevent spoofing of their page.

Oh, is that what the picture is for? *lightbulb*

Posted by fugu13 (Member # 2859) on :

Unless you absolutely need to have access to all of it at any time (which is unlikely), I'd start putting it in rolling CDs. You'd be able to take a good chunk out penalty free every month, once you had it set up (since a CD would be expiring every month), and your bank would be willing to make a short term, very low interest loan to you for larger amounts (backed by some of the CDs) if you found you needed more than what was becoming available that month.

I don't know how much money this is, but make absolutely sure you do not exceed the FDIC limit at any one bank. There have been bank failures already, and it wouldn't take much for more banks to fail. It is not likely that any particular bank will fail, but when it is so easy to avoid the problem, best to do so.

Posted by rollainm (Member # 8318) on :

Thanks everyone. ING and HSBC both seem great, so Ericka and I decided to go with the slightly higher interest rate at HSBC.

Posted by AvidReader (Member # 6007) on :

quote:
make absolutely sure you do not exceed the FDIC limit at any one bank

It's $100,000 per ownership type. If you have an account with just yourself, you've got $100,000. If you're on an account with someone else, you each get $100,000 (though your $100,000 is split among all the accounts you're a joint owner on). If you've got an account in trust for your kids, the same rules apply. Business accounts are another $100,000. I think there's two more catagories, but you'd have to ask someone at the bank about it.

Posted by rollainm (Member # 8318) on :

Thanks to you both. Sorry fugu, I guess I missed your post this morning.

I won't have an amount close to that limit for some time, if ever, but I'll keep that in mind for if/when I do.

As for setting up rolling CDs, unfortunately I'm not getting quite that much. I'm getting $40,000, which is just indescribably awesome, but after paying off student loans, a little debt, some new furniture, a couple of things I don't need but want (HDTV w/ a HTPC [Big Grin]

), putting a down payment on a new car, and paying for the wedding in September, it'll probably be down to about $10,000 - maybe a little more.

[ February 08, 2008, 09:12 PM: Message edited by: rollainm ]

Posted by rollainm (Member # 8318) on :

Avid,

So our joint savings and checking accounts together would be covered up $200,000?

[ February 08, 2008, 09:17 PM: Message edited by: rollainm ]

Posted by erosomniac (Member # 6834) on :

My WaMu online savings has $0 minimum balance, $0 monthly fees, online transfers & account management, and a 5.50% APY.

Posted by ketchupqueen (Member # 6877) on :

rollainm: ING does rolling CDs starting at considerably lower than that. I bet other banks do, too. You wouldn't even have to put all of it in-- you could do half or something.

Posted by AvidReader (Member # 6007) on :

rollainm, yes, unless you're on any other joint accounts at that bank. You get $100,000 for all the joint accounts you're on at that bank. So does each person you're on an account with.

Posted by esl (Member # 3143) on :

quote:
Originally posted by ketchupqueen:
(The reasons WE keep an account with a brick and mortar bank are that we don't like depositing checks via ATM if we can avoid it-- we've had them go missing in the past, not often but even once is a pain-- and while my husband's pay is direct deposited we get the occasional check to deposit from other sources, and that we like having a bank where they'll waive fees for cashier's checks and money orders because we're customers.)

Is this at WaMu? I know I had to pay a fee for a cashier's check there even though I'm a customer. I think World Savings didn't charge that though so hopefully Wachovia doesn't either.

I deposit my checks at the physical banks too.

Posted by dkw (Member # 3264) on :

In a CD, even if you can't do rolling CDs the penalty for early withdrawl may be just a portion of the interest you've already earned. If the rate is good enough it might be worth it. We had to pull a little out of a CD last year, and the penalty didn't come anywhere near negating the interest advantage we had from putting the money in a CD rather that in regular savings.

Posted by FlyingCow (Member # 2150) on :

eros, is it still 5.5%? Looking on their site, it's at 4.25% - at least for my state. Still, that's slightly better than the 4.0% I've been getting...

Posted by Richard Berg (Member # 133) on :

Don't forget Fidelity mySmart Cash accounts. It's basically the best features of checking, savings, MMFs, and brokerage rolled into one. The $100 deposit bonus doesn't hurt either [Wink]