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Automatic payments from a money market (savings) account
Old 04-07-2007, 01:20 AM   #1
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Automatic payments from a money market (savings) account

I'm trying to simplify my monthly bill paying. I noticed that all my billers (AT&T, PG&E, student loan organization, others) allow me to register a *savings* account as the bank account to be automatically debited, if I set up automatic payments with them.

(At the moment, I do a little calculation at the beginning of each month and move a rough amount of money from my savings account to my checking account to cover all bills.)

My employer is willing to direct deposit my paychecks into my savings account instead of my checking account. So I'm thinking that I could eliminate the need to touch my bank accounts at all during monthly bill paying time, with the combination of paychecks direct depositing into the savings account, and all monthly bills being paid out of that same savings account. And I'd still earn money market rate interest.

The catch is... On the credit union that holds the savings account's website, they discuss why their own automatic bill pay service (that is, if I go through them instead of going through AT&T, PG&E, etc) does not allow using savings accounts. This is because their money market savings account is a "non-transactional account" and by federal law has a limit on the number of "unsigned transactions" that can be processed per month.

Google didn't reveal much information about these non-transactional accounts and their limit of unsigned transactions. :[

Anyone tried to do what I was thinking of before?


Well, I spoke too soon. There's a lot on Google about this "Reg D". It says the limit is six transfers. It's fairly clear about what counts as one of these unsigned transfers or not, but I'm still reading.
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Re: Automatic payments from a money market (savings) account
Old 04-07-2007, 08:37 AM   #2
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Re: Automatic payments from a money market (savings) account

I can't answer your question about a savings account at a credit union.

But I can tell you that I set up anything I can to be paid from my bank accounts. I prefer to set it up that the creditor (phone bill, utility, car loan, credit card, etc.) initiates the transaction rather than setting it up to have my bank do it.

I used to have it so that my bank sent the payment, leaving 5-7 days to get to the creditor. Last year I had one that showed as paid by my bank account but did not get to the credit card company after 3-4 days. A holiday weekend was coming up and that payment wasn't showing yet. I called the credit card company to inquire about it and they told me that if I paid through the credit card company site the payment posts the same day or the next day. You usually get a confirmation number or can see a page with it pending. That way I know it's paid on the day I want it paid. I didn't like not knowing when/if it would show up.

I love all this automatic stuff. My husband's and son's employer encourages everyone to do Direct Deposit of paychecks. You can even divide the deposit over up to 3 bank accounts. Makes automatic saving even easier. Of course, we still need a trip to the bank for cash, but we're hardly using cash anymore, too!
Married, both 69. DH retired June, 2010. I have a pleasant little part time job.
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Re: Automatic payments from a money market (savings) account
Old 04-07-2007, 09:17 AM   #3
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Re: Automatic payments from a money market (savings) account

I am pretty pleased with Bank of Americas online banking bill payment setup. They have consistantly improved the services and features over the past three years to the point that nearly all bills are paid in 2 days, even some obscure local credit union accounts that used to take 5 business days.

Thier system features a "pay by" date rather than a "send payment" date.

The recurring payment feature is pretty good for fixed payments.

They also have an ebills feature whereby the creditor posts the bills to the banks website and you can "review" and pay it, but I have never used that.

So......I am doing something similar to you, except I can monitor and control everything from a single website as it also permits me to import funds from the MM account.
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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Re: Automatic payments from a money market (savings) account
Old 04-07-2007, 10:49 AM   #4
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Re: Automatic payments from a money market (savings) account

Not sure if this helps you, but my Vanguard MM account has checking available to it. Many billing places can do automatic e-checks of some sort, where you offer them the routing number and account number, and they can basically "pull" the money instead of it being "pushed" from the online billpay.

So, if you have plenty of money to cover the monthly bills, you might want to set it up this way and not have to worry. The only worry is that they will time it badly and hit you just before something deposits.

This might get around the 6 transfer thing from the money market as it might be titled differently from "transfers" in the regulation, since you are basically writing a check.

Also, I think the bills will probably have to be over $250, since that is the minimum check amount that Vanguard allows. Might be different at your institution though.

Now that I think about it, I also have a high interest savings acct at Emigrant, and I called once and they also had a routing number to set up automatic payments at through bill-payees. So you might call and ask if there is some sort of routing number that the creditors can use to directly take it out of your savings.
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Re: Automatic payments from a money market (savings) account
Old 04-07-2007, 12:14 PM   #5
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Re: Automatic payments from a money market (savings) account

I have a automatic monthly deposit from my Fidelity MM account to my bank account. I do all bill paying from my bank account. Some of it is ebills where the bank is notified by the merchant about amount and date due and then I schedule the payment - although some of these are paid automatically. Others - mostly insurance - is done through direct withdrawal from the bank account by the company.

I also have some bills automatically billed to a credit card which I then later pay via ebill from the bank account.

I decided not to use my Fidelity MM account directly to pay bills because the insurance companies wouldn't do direct withdrawal from a MM account. Also the IRS doesn't do direct withdrawal from a MM account. I prefer to do all my bill paying from one account.

I can go online at any time and transfer funds electronically between my bank account and MM account.

This is all very flexible and fast.

Retired since summer 1999.
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