ING Direct vs. Capital One vs. EmigrantDirect vs. HSBCDirect.com

[maggieddd]

I currrently have my savings account with ING Direct. Their APY is 3.80%. I've been pretty happy with them. Lately I started looking at other banks and I found out that they offer the following:
EmigrantDirect 4.25% APY http://www.emigrantdirect.com/?source=BRATE#

CapitalOne 4.25% APY http://www.capitalone.com/savings/i...P1&source=219270&number=xj3lDAIf6KcDWTKV7NyNt The annual percentage yields are effective as of 3/8/2006 and subject to change at any time. High Yield Savings. These rates are variable and are subject to change after the account opening.

HSBCDirect 4.80% APY http://www.hsbcdirect.com/ Annual Percentage Yield (APY) is offered on accounts opened through 04/30/06. After 4/30/06, all deposits will earn the variable APY available at that time.

Does anyone have any experience with either of these banks?
Do you think it would make sense to change?
I've got pretty used to the ING and the rate seems to go up and has never gone down yet since I've been with them.
What do you guys think?

 

[maddythebeagle]

I have HSBC and ING accounts. HSBC has been having 25-35 buck signup bonuses. Other than that, it takes time to setup your links to other bank accounts, etc.

 

[SC]

I have EmigrantDirect and it's pretty easy to use. They have a no-frills web site and, if memory serves, only allow transfers between your checking account (at another institution) and their savings account - at least, that's all I use it for.

When rates started to rise, other banks seemed to raise theirs before EmigrantDirect did. I was thinking of moving to another bank when Emigrant raised their rate to match. Since then they've raised the rates a few times to stay competitive.

They also offer a credit card with 1.25% cash back, no maximum. I've had it less than a month so I can't comment on it yet, but it looks like a great companion to the Citi Dividend card (use the Citi card for 5% back on groceries and gas, Emigrant for 1.25% elsewhere).

I'll have to look into that HSBC deal though, 4.8% is a great rate.

SC

 

[cute fuzzy bunny]

I just gave up moving money every 3-6 months to get the highest rate and dumped my cash into the vanguard prime money market so it'll be nearer the rest of my money.

4.30% as of today. No limited term, no funny business.

 

[maggieddd]

Thanks!
So far I am thinking of signing up with HSBC. I hope that after April 30th their rate doesn't go way down. But even if it does I am still linked to ING Direct so I can just move that money over.

 

[lazyday]

Could also get a treasurydirect.gov account, for more options.

If your online bank doesn't stay competitive, you could buy treasury bills, generally on Mondays and Tuesdays.

But if you need the money before the bills mature, you need to sell and pay commission plus probably a spread. Probably not too painful, if it doesn't happen often. (you could split your money between Tbills and online bank, so you shouldn't need to sell early)

 

[maggieddd]

Could also get a treasurydirect.gov account, for more options.

If your online bank doesn't stay competitive, you could buy treasury bills, generally on Mondays and Tuesdays.

But if you need the money before the bills mature, you need to sell and pay commission plus probably a spread. Probably not too painful, if it doesn't happen often. (you could split your money between Tbills and online bank, so you shouldn't need to sell early)

what is a treasurydirect.gov account?

 

[SC]

I just gave up moving money every 3-6 months to get the highest rate and dumped my cash into the vanguard prime money market so it'll be nearer the rest of my money.

4.30% as of today. No limited term, no funny business.

I parked my short-term savings in Vanguard's MM for many years, but when Vanguard Prime was paying close to 1% and the new online banks came out with ~3% savings accounts (if memory serves), it became worth my while to jump to Emigrant.

I'm glad you pointed out the current Vanguard rate, because it looks like it might be time to return.

SC

 

[cute fuzzy bunny]

yeah, I dont know why vanguard was paying such crappy rates on their MM's when the "other guys" were paying more. I was surprised to see them back to being competitive again and moved my money back over there.

 

[ats5g]

Hey gang,

I think this is what lazyday is talking about. It was an email circulated by one of the Vanguard Diehards:

Here is another easy money-making idea. If you have short-term money sitting around in a money market account, you are probably earning about 3.5% to 4.0%, before tax. If you want to earn a bit more, and avoid paying state and local taxes, here is what you can do.

First, set up a Treasury Direct Account at www.treasurydirect.gov. It's easy to set up and all you need is your bank routing number and your checking account number. After you've set-up your Treasury Direct account, click on the "Buy Direct" tab at the top of the page. Under that tab, select "Bills" and on the next screen, enter either a 4 week treasury bill, a 13 week treasury bill, or a 26 week treasury bill. Then enter the amount you want to purchase (must be at least $1,000 and in $1,000 multiples….sorry, the maximum you can purchase is $5,000,000!) and submit. You can set up repeating purchases ahead of time and it will be done automatically.

There are no fees for the Treasury Direct Account and no "middle-men" taking money from your earnings. For example, the 4 week treasury bill that was sold today yields 4.456% with no state or local taxes due. (Compared to Vanguard's Prime Money Market Fund (4.29% today), that yield is 3.9% higher without considering the state and local tax advantage). In Virginia, depending on your effective state tax rate, today's auction results could be equivalent to a 4.7% yield while tying up your money for only 28 days! In higher-tax places like California and New York, the equivalent yields are even higher.

Here's how it works. Set up automatic purchases to occur every Tuesday (that's when the 4 week treasury bills are auctioned) from your checking account. When the auction is completed, the Treasury Department will draft your checking account for the amount due. For example, in today's auction, for every $1,000 purchased, the Treasury Department will deduct $996.59. Twenty-eight days from now, they will deposit $1,000 back into your account. All you have to do is to make sure that enough money is in the checking account to cover the draft for the completed auction. Of course, each time, the Treasury Department puts back into your account more money than they took out, so over time, the amount of money you have available for the purchase of new treasury bills gets larger. The magic of compounding works for you once again. And this time, excludes the tax-bite from state and local governments.

Ed

Could be of interest to those like higher state tax state's like CA.

- Alec

 

[free4now]

I just recently compared online savings banks and ended up opening an emigrantdirect account. There are other options that pay more but I like that emigrantdirect doesn't have any restrictions on minimum balance, has no minimum time to leave the money in, and is convenient to xfer to/from my checking account.

 

[MJ]

I like the best of all worlds. I have ING, Emigrant Direct and HSBC.
Right now my cash is in ING and HSBC paying 4.75% and 4.8% respectively.
Why go to Emigrant or Vanguard MM paying 4.25 and 4.3%. Why not get the additional .5% even if it is for 2 months (right now) I believe HSBC's % was a bit higher than Emigrant before they had this promotion.

 

[cute fuzzy bunny]

Unless the promo's are for long periods, the time the money in transit (at least for me) dents the benefit. Takes ING and Emigrant 2-3 business days to move money in or out of my checking acct, and one to go in or out of vanguard. I dont think ING or Emigrant pay interest during that 4-6 days of "transfer" time.

Plus if "something happens" in the market and I want to deploy some of my cash...its right there ready to buy.

 

[MJ]

I do agree that keeping some money (upto $50k) in Vanguard for a fast purchase is a smart idea. I guess I don't see myself purchasing $200k+ within a day. Don't forget that you can purchase the same day through wire in the AM (closer to EST the better) or purchase through ACH and get following day's price.

 

[lazyday]

I think this is what lazyday is talking about.

Yup, that's pretty much it, but I haven't done any automatic purchases.

You can set up an account, and test it by buying a $25 ibond. Then, it will be there and ready, in case you ever decide to buy bills, ibonds, or anything else the Treasury offers through the site.

This site shows current rates, but not for 4 week bills: http://www.bloomberg.com/markets/rates/index.html

Depending on your needs, having the option of buying Treasury bills can help justify taking a promotional rate at a place like HSBC. If when the promotion ends, HSBC goes down to 4.25%, you might do much better with a T bill, which might pay around 5% by then. (6month bill is already at 4.8%)

Treasury bills are backed by the U.S government, unlike most money market funds. Not that most money market funds aren't pretty safe--but treasuries are safer than the typical money market. Vanguard also offers a money market fund which invests in treasuries.

 

[Outtahere]

I just went to check my account at EmigrantDirect, they are now paying 4.50%