Bank Laundering
Posted by moonimus on Feb 16, 2008
Even though I’ve been watching the last season of the Wire religiously in the last month, I’m not talking about cleaning dirty money. Clever Dude has inspired me to start cleaning up my bank accounts so I’ve closed my FNBO Direct savings account and my igobanking savings account. Both relatively painless process though I think FNBO was easier. I left very little money in each account and kept them open in case rates at those banks became favorable again. But in the current climate, rates for savings account continue to fall near inflation levels so I won’t be chasing rates any time soon. One United continues to offer an APY of 5.15% but I’ve read from other sources that their rate cuts will be more gradual as they only pay interest quarterly.
This leaves me with the One United savings account, 3 brick and mortar accounts with Chase, an Electric Orange checking account at ING and a rewards checking account with Toledo State Bank. I previously posted about my banking situation here. I’m still looking for suggestions…
Deposits
Posted by moonimus on Feb 8, 2008
There are some days where it seems as if going to the bank or an ATM to make a deposit seems like the biggest hassle in the world. I’m not sure why I feel this way but there have been days where I refuse to go or even worse I completely forget and that delays me access to my money. I just read this article in the New York Times about scanning checks and sending them to the bank electronically. For some reason, this seems a lot easier to me but I wonder if scanning checks would become the hassle that a physical deposit already represents in my mind. This would help the online banks like ING or the those rewards checking accounts that require the majority of your business to be done online. One thing’s for sure, if this catches on industry wide, I’m fairly certain that I would get rid of my Chase accounts and that would be a good thing.
Fed Rate Cut
Posted by moonimus on Jan 22, 2008
The Federal Reserve just cut the federal funds rate on overnight loans from 4.25% to 3.5%! I can’t remember the last time there’s been a 3/4 point rate reduction since I started understanding how the Fed affects the overall economy.
Overall, this was a response by the Fed to the declining domestic and international markets. I haven’t checked yet but I’m sure all my retirement accounts have taken a beating. I’m not that worried as I’ve got at least 35 - 40 years before I start to tap into that money. If my daughter’s 529 plan is any indication, the market has been tanking badly since last June. I wish I had a nice windfall of money right now as I’d most likely buy into this declining market across the board…
This rate cut will probably affect me in two ways. First, the interest for my online savings account is sure to decline. I’m not too happy about that because for the first time in my life, I actually have a $1,000 in a savings account accruing at a decent 5.3% APY. Second, I’m going to make some calls to a few banks and see if I can get a better rate on the mortgage for my apartment. A friend told me that refinancing shares are much easier and cheaper than refinancing a mortgage. If I can reduce my interest rate by even half a point, that would be a big difference. I’ll post in the future the results of my calls.
Banking
Posted by moonimus on Jan 8, 2008
I’ve been sick the past four or five days plus I’ve been away on business. I’m gearing up for another business trip that will last through Friday. Hopefully, I’ll be able to mend on the road. If anyone has any suggestions for managing a cold while not at home, I’d love to hear from you. This also hasn’t done me any good in the weight loss department. I’m a personal believer in waiting until you get better before putting additional physical stress on your body. I missed this week’s weigh in but I’ll get to it next week.
So my banking situation is a little complex though I’m ok with the setup for now. Here’s the breakdown. I’m a rate chaser when it comes to savings account and I’ve had online savings accounts at igobanking, fnbodirect, but now have settled on One United. I know SingleMa had a bad experience with them but I think they’ve worked out their kinks. The rate at One United is 5.3% APY but they pay interest quarterly. I’m crossing my fingers that the rate will stay the same after the next anticipated Fed rate cut. Eventually, I’ll probably put my savings into a money market fund but that’s not happening any time soon. The savings account is pretty straight forward.
The checking is where it gets complex. Before I switched jobs, I opened an ingdirect account. At the time, I think ING had a 4% APY for its online checking. The only drawback with ING is that you need to keep a brick and mortar bank account for some convenience, especially for deposits. My brick and mortar bank is Chase bank. I can get frustrated with them because of their fee structure. We have 3 accounts with Chase, one is a joint account, one is an individual account for me and one is an individual account for my wife. We set up the individual accounts for our respective allowances. This way we don’t ruin Christmas, birthdays or random surprises. Normally I would close the joint account but we make all the joint deposits into it and its easier to keep things clean instead of commingling joint money in our allowances.
I’ve also recently opened up a rewards checking account at Toledo State Bank. (You can read more about rewards checking accounts at the excellent Bank Deals blog.) I can earn 5% APY on upto the first $70,000 if I meet the following requirements: 1) setup a direct deposit or ACH transfer into the account every month, 2) complete 10 Debit Card transactions (non-ATM) 3) receive electronic statements. There is a local NJ bank that offers 6.01% rewards checking but I want to see if they will lower the rate after the next anticipated Fed Rate cut. I haven’t yet received my checks from WalMart for this account so I haven’t moved my automatic payments and direct deposit yet but that should happen by next week.
Once the direct deposit has been set up. The ING will get a set amount and Toledo will get the rest. The ING account will fund the joint Chase account at the first of the month and then we will transfer that amount into our individual accounts and then mid-month ING will fund the individual accounts. I’d close the ING account except that Toledo doesn’t do online ACH transactions (since Chase will charge me a fee if those accounts don’t receive electronic funding every month). I’d have to call Toledo and I’m not calling twice every month to do that. The One United account is linked to all the accounts. Did you follow all that?
Obviously, I’m not keeping this very simple. I’ve thought about moving the brick and mortar accounts to Commerce Bank since I’ve heard a lot of great things about them but I have a feeling they’ll charge me fees if they are not automatically funded every month just like at Chase. Anyone think I can do this easier? Any solutions would be most welcome!
