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Bouncing around online savings accounts
Old 06-04-2023, 10:14 AM   #1
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Bouncing around online savings accounts

We were at a BBQ last weekend and my Uncle mentioned Marcus paying over 4% on his savings account. I was happy with 3 and change at Discover, then he mentioned a bonus if he refers me. Just opened the account, good for over 5% for 3 months.

I've never really bounced around accounts, or even investments for that matter. Slow and steady wins the race, but it seems that taking a more active or observant role in money is the thing to do during retirement? not that I "fired," yet, but am close.

Is that "normal" for lack of a better term?
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Old 06-04-2023, 10:31 AM   #2
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I think there is a good question in there. How observant/active does one need to be? I am always looking for simple solutions and fortunately for equities index funds/ETFs are good and I am satisfied with some balanced funds like VG W&W. Fixed income is a bigger challenge as I really dont like bond index funds and really don't want to chase the latest TIPS, treasuries and other rates. So I just use ibonds, MMs and my TSPG Fund (something like a stable value fund. On this board it looks like serious possible gains from finding the higest bond and CD rates but it does take some effort and how much it returns based on time involved and what is easily avialable from MMs and the like is up to you and the portfolio size.
One reason I want to keep things simple is that DW has no interest in things financial and I would like to get things as simple/auto pilot for her. She will no be doing bond ladders.
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Old 06-04-2023, 10:38 AM   #3
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Sure, it's "normal" around circles like we have on this site. However, when you get into the higher rates/yields like we have today, you have to begin to question how much is the additional payoff vs any time/effort seeking out, moving money around, and managing another account? For savings accounts, generally any differential you gain will be taxable. Unless you're dealing with very large amounts, it's not going to amount to much.

Let's take your Marcus 5% for 3 months. What will you do at the end of 3 months? Leave at Marcus for the current 4.15% or move all the cash somewhere else?

Let's suppose we each have $100,000. You put it in to Marcus at 5% for 3 months. I leave mine in Fidelity SPAXX for 4.75%. Assuming no rate changes, at the end of 3 months, you have collected $1250, I've collected $1187.50. So, for $100,000 you've collected $62.50 more than me. Take out, say 20% for fed and state taxes, and we'll call the difference $50 (for 3 months).

Now, is the additional time/effort of searching out and managing an additional account worth $200/year on every $100,000 vs the lazy man's approach?
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Old 06-04-2023, 10:48 AM   #4
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What njhowie said. I use Amex for my savings account, which is currently paying 4% APY. In the past, I used a few others in succession, but decided to stop chasing the current highest paying outfit. For the amount I have in savings (usually somewhere between 25K - 50K), it's not worth the bother. The real money gets made/lost in my holdings of VTSAX.
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Old 06-04-2023, 10:52 AM   #5
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I bounce, but within a brokerage account. It’s called laddering.
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Old 06-04-2023, 11:02 AM   #6
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Used to chase the higher rates and bonuses, but not so much anymore. Not worth the time and admin reporting.
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Old 06-04-2023, 11:04 AM   #7
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The High Yield Savings Accounts are not keeping pace with other venues. I'm closing out a Capital One HYSA that's raised their rate to 3.9% only recently.

If there's a bonus for opening an account, I'll move money. But it has to be a substantial Bonus. I've raked in a few hundred dollars for my efforts...less than that and I'm not really motivated.

I keep Cash at Fidelity, getting 4.91% in FZDXX. Expense Ratio is now 0.17% which I can abide. The Cash is ready to invest if I see something I'd like to buy. And this has the added benefit of showing up in my Total Portfolio Value when I login to Fido.....a comforting feeling.
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Old 06-04-2023, 11:21 AM   #8
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I've told the story of my uncle Pat here before but I'll tell it again: Pat was a smart guy, a former judge, and very sensitive to interest rates. Every time he had a CD come due, he would shop the town for the institution with the best rates and move his money there. (This was pre-internet.) When Pat died, his executor ended up having to contact every single financial institution in town to determine if Pat had deposited money with them. Pat had saved essentially no records.

Moral, of course, is that those who "bounce around" should keep good and well-organized records. If Pat had access to the internet who knows how long they might have had to keep the estate open, watching the mailbox for 1099s and other clues to where he had squirreled his money away.
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Old 06-04-2023, 11:27 AM   #9
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I basically have 3 online savings accounts plus MM in my brokerage accounts of course. I tend to move more funds to the higher rates but I haven’t opened a new one in years and probably won’t. I always keep some at each institution. Often an online savings bank will have attractive CD rates, and I’ll park money in CDs at times. One savings account is primarily used for annual expenses, one as cash for my brokerage when MM rates are low, and the third one is more opportunistic.
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Old 06-04-2023, 11:37 AM   #10
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I keep my Savings account at Discover - they have a history of paying a higher savings rate than other banks, including Marcus. You can research this at deposit accounts.com. They are currently paying 3.9% and likely will go to 4% in a month. I’ll shop around CD’s when they come due. I have far more in CD’s than Savings.
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Old 06-04-2023, 11:47 AM   #11
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yeah, thanks for the replies. This was out of character for me. Like I said, I tend to leave things alone, almost to the point of ignoring them. Quarterly review and update and that's about it.

I'm going to move some money from discover to marcus because it is a point and a half higher, and will re-evaluate in 3 months. I also just learned about the money market funds at schwab (just migrated from TD Ameritrade) and moved what little cash I have in that account to one of the funds I read about here.

I'll figure it out.
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Old 06-04-2023, 12:02 PM   #12
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I have seen it again and again, how when people ignore their bank money, the banks don't do "the right thing".

Just last week, I asked a relative what is happening at Ally bank, my relative said hadn't even looked in 3 years.
I helped my relative cancel an "auto-renewd" 18 month CD paying 1.8% and buy one paying 4.8% all at Ally.
Took about 10 minutes, as I explained the steps.
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Old 06-04-2023, 12:06 PM   #13
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I just checked - Marcus is only paying 0.25% APR higher than Discover on their savings account.
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Old 06-04-2023, 01:11 PM   #14
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Ally has been dragging their feet on savings rate increases, however, they had some sweet rates on their no penalty CDs back during the March bank failures so I loaded up on those instead. I usually find that about the time I’m ready to transfer funds to a different institution the bank ends up with a special offer or something that gives me a much better rate, so I’m fairly patient. I was getting ready to transfer some funds from a maturing Andrews FCU CD to a couple of other institutions and lo and behold they have come up with a sweet special 5.75% for 7.5 months. So most of those funds will stay. Funny how often that happens.

Yeah, I keep track and rarely auto renew.
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Old 06-04-2023, 01:23 PM   #15
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I bounced around until I found this.....

It works well for our really liquid $$$

Dominion Energy Reliability Investment.....5.25% on $50k or more.


https://investors.dominionenergy.com...t/default.aspx
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Old 06-04-2023, 01:40 PM   #16
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I never auto renew my Cd's despite the 0.05% uptick. Assists me in tracking.
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Old 06-04-2023, 01:46 PM   #17
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If you are looking for insured liquid savings, try https://www.depositaccounts.com/savings/. I have accounts at Bask and a couple of others listed there. They also track CD rates, although right now I can generally do better through the brokers.
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Old 06-04-2023, 02:03 PM   #18
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I opened a few credit union accounts when rates were rising in 2018. I have kept the ones with the best track records and I use those as their rates suggest. Recently those funds have migrated to brokerage for Treasuries.

One of the new institutions, actually a bank, has become part of my permanent (for now) financial management infrastructure. That one is CFG Bank out of Baltimore. I bought a CD there a few years ago and added some funds to their very competitive HY MM account, now at 5.07%, which I have continued to use. All online, no branches nearby but I do like the brick and mortar presence.

I have not found Ally, Capital One or Discover to be competitive in quite some time but I have placeholder funds at all but Discover.
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Old 06-04-2023, 02:05 PM   #19
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There’s a middle ground too.

If you basically ignore it or set it on autopilot you can be missing out on some easy incremental cash.

On the other hand, doing lots of moving around for small differences seems like a waste of time too.

I’m cool with paying attention enough to not get taken advantage of, but also not spending lots of time doing so.

I don’t like to keep all my eggs in any one basket, so I’m already setup with a few brokerages and a few banks. The accounts are already hooked up, so moving money from one to the other is quick and easy. If Vanguard is better than Cap One. I’ll keep the larger pile of cash there, if this reverses I’ll do the opposite. No new accounts are opened or closed.

If one of the companies consistently lags for a year or two, I’ll pick another and migrate to it - over time.

And yes, keep decent records regardless.
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Old 06-04-2023, 02:49 PM   #20
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Quote:
Originally Posted by Al18 View Post
I keep my Savings account at Discover - they have a history of paying a higher savings rate than other banks, including Marcus. You can research this at deposit accounts.com. They are currently paying 3.9% and likely will go to 4% in a month. Iíll shop around CDís when they come due. I have far more in CDís than Savings.

I don't "bounce", but I do move accounts for higher interest rates over time when a formally high rate payer falls way behind the curve and doesn't seem to be trying very hard to catch up. In the past I've had Wachovia (absorbed by WF), Zions, Discover, and a couple of credit unions.


I closed the last credit union account as they had dismal interest rates and started preaching woke "equity" policies in the community involvement newsletter.


Zions Bank rates dropped in 2019 and have never recovered plus they continuously shifted my Internet Money Market into different programs so I just finished closing that account.


Discover Bank historically paid higher rates as they used deposits to fund their credit card business. Over the last rate hike cycle they have consistently raised their rates later than everybody else. Discover's CD terms stink with early withdrawal penalties on 5 year CDs is a whopping 18 months interest. I see myself doing less business there when my last CD matures next May.


For now I get good rates in MM's at Fidelity. Now that I've started laddering bonds further out the curve, I don't see myself chasing a high yield savings account as I don't have that much uninvested cash any more.
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