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Shifting $ To Another Online Savings Acct
Old 08-24-2008, 05:58 PM   #1
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Shifting $ To Another Online Savings Acct

Hi, I love this forum. Would appreciate your advice on this situation. I have about $125,000 in an ING savings account, earning about 3.4% APY. I like ING, however, Capital One, in conjunction with Costco, is offering 3.7 APY for their savings account. ING's 3.4% rate is the highest rate, based on maintaining a minimum $100,000 balance. The minimum balance required to earn the3.7% rate is just $10,000. It's also not a teaser rate. You know where I going with my question. Would it make financial sense to shift most of my ING money into a Capital One/Costco savings account to get the higher rate? I'd keep a small amount with ING just to keep my account active, but is it worth the move? Any downsides? Thanks!
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Old 08-24-2008, 06:01 PM   #2
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My first bit of advice would be to get under 100k at one bank. You are over the FDIC limit and banks are failing.
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Old 08-24-2008, 06:07 PM   #3
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Agree with splitting your accounts so they are both under $100K.

Cap1's rates have been steadily declining. They do not alert you when the rate changes. If you could get a lock on a better rate, may be OK.

It also depends on your tax bracket.
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Old 08-24-2008, 06:39 PM   #4
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rates go up and down at most banks - you are looking at $1.027/day interest difference. Ing is making $11.643/day on the $125k. Seems like it takes 5 days or so for me to get money moved - maybe you can do better. If 5 days it will take 57 days of your money making the higher rate to break even with the ING rate + 5 days of zero interest, or 23 days if you only lose 2 days of interest on the transfer. I like CapOne though, and did move a bunch of our $ there and out of the 2.2% Vanguard Prime.
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Old 08-24-2008, 06:51 PM   #5
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I have used ING since 2004 when they were beating everyone with the whopping rate of 2+%. I moved money to Emigrant when they were beating ING and then back to ING when Emigrant went down and my CD matured. I opened an HSBC account because they were offering .5% above ING (good until 9/15). All accounts are still open so I just do free internet transfers as required to catch the best short term rate. It only takes a couple of seconds and a couple of key strokes to do the transfer. It took about 30 minutes to open the account and link existing accounts.

Never exceed the insured amount which I believe varies depending on whether it's just regular savings ($100,000) or an IRA ($250,000).
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Old 08-24-2008, 10:31 PM   #6
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Don't exceed FDIC limits and reread calmloki's post. You may be chasing pennies potentially losing down days to float that takes weeks months or years to recoup. I have suffered from this in the past so many different accounts I couldn't find them all and if I could figuring out the passwords was a whole new challenge. Pick a couple people you want to work with and keep it simple.
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Old 08-24-2008, 10:52 PM   #7
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To me, shopping around for savings account rates is a waste of time. They can change them at any time (at least past some guaranteed intro period), and usually the differences aren't enough to make it worthwhile. However, it's worth it to shop around for CD rates, since that's something you can lock in.

Speaking of CD's, do you really need all that money in a savings account? Have you considered setting up some CD ladders?
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Old 08-25-2008, 06:11 PM   #8
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I agree try splitting your account and try some CDs. Eloan has a 12 month CD for over 4%. Unless you need your money soon.
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Old 08-26-2008, 11:43 AM   #9
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Originally Posted by mountaintosea View Post
I agree try splitting your account and try some CDs. Eloan has a 12 month CD for over 4%. Unless you need your money soon.
Where in the internet can you access a daily summary of the highest interest rates for CDs, in case you want to start looking at setting up ladders?
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Old 08-26-2008, 11:45 AM   #10
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Where in the internet can you access a daily summary of the highest interest rates for CDs, in case you want to start looking at setting up ladders?
This place is pretty good: Bank Deals - Best Rates and Deals
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Old 08-26-2008, 11:46 AM   #11
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Has anyone used E-Loan?

I tried finding their rating on bauerfinancial.com but couldn't find it.
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Old 09-01-2008, 08:36 PM   #12
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hsbc is 3.5
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Old 09-01-2008, 08:43 PM   #13
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Where in the internet can you access a daily summary of the highest interest rates for CDs, in case you want to start looking at setting up ladders?
The answer to all such internet search requests is always: www.google.com In today's modern world, one simply must learn how to use google. In my school district, they teach 3rd graders how to use it effectively. They get graded on it in fact.
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Old 09-02-2008, 06:51 AM   #14
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I would search Credit Unions for CD Rate - It has been my experience they have the best CD rates.

The only thing I do not like about on-line Banks is they the an inordinate amount of time moving money electronically. HBSC will take 3 business days (which can be as much as 6 calendar days) to post your deposit. In the meantime you are getting 0% interest. I really do not understand this since if you use a debit card at a local merchant they can move the money instantly. But other than that the MMSA rates at the banks today are comparatively very good. If you just "park" the money there the time lag may not be important. But stay below the FDIC limit of $100K for non-IRA money.
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Old 09-02-2008, 07:31 AM   #15
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I have money spread between 4 on-line account, ING, HSBC, Emigrant and FNBO. FNBO has been paying 3.5% and it's not an intro or limited time offer as is HSBC. I keep well under FDIC minimum and the idea is should one bank fail it will take time to sort out and get access to the funds. So each account represents a smaller portion of my pie for that reason.

There is a new on-line savings account entry paying 3.75% for deposits over $1000

http://money.cnn.com/2008/08/25/pf/d...line/index.htm
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Old 09-03-2008, 01:35 PM   #16
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Wamu is now offering 3.75 APY with no minimum balance.
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Old 09-03-2008, 02:41 PM   #17
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Rates seem to be stabilizing and slowly heading up these days.

I keep most of mine at Alliant Credit Union (3.75%) and IndyMac Federal Savings Bank (3.70%). (Yes, the latter failed, but it was a non-event for me as described previously.) I check the rates every so often to make sure they're still competitive, and I'll move for a quarter point difference in rates, but I'm not religious about it.

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Old 09-03-2008, 02:43 PM   #18
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One other thing: when I do move money around I usually schedule it as a "pull" from the bank I want to move money to. My impression is that this decreases the period of time that the money might not be earning interest. It is possible in certain circumstances even to earn interest on the money in both places for a few days.

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