The Money Thread

[SnB]

Hey guys, I figured we could use a spot to discuss personal finance and whatnot.

 

As some of you know, I got married last fall. We still haven't gotten a joint checking/savings account yet and we're finally looking. Who can you guys recommend for good savings/money market accounts?

 

Online ones seem to give the best interest rates, I just need some personal feedback from people. Discover seems like they have a good program.

Edited March 1, 2010 by SnB

[NorthSideSox72]

We use an online savings account, that we shovel surplus into at the end of each month when I forecast the month ahead. Savings account rates are real low, but its always higher on those online-oriented accounts (e-trade, ING, etc.), so why not use it? Keeping extra money in checking, or a bank savings account that pays like a tenth of one percent interest, doesn't buy you anything.

 

You can keep finances in line and still put a lot to savings and investments if you are willing to put in a few minutes each month to forecast the next month's incomes and costs. That allows you to know how much you can safely invest or save.

 

Also, as long as you can afford to make your full payments, I recommend paying for everything possible on a credit card. You get the points/miles whatever, and its easier to deal with a credit card number being stolen than a debit card. Just keep in mind this is only a good option if you can pay in full each month, and do that forecasting.

 

[RockRaines]

Hey guys, I figured we could use a spot to discuss personal finance and whatnot.

 

As some of you know, I got married last fall. We still haven't gotten a joint checking/savings account yet and we're finally looking. Who can you guys recommend for good savings/money market accounts?

 

Online ones seem to give the best interest rates, I just need some personal feedback from people. Discover seems like they have a good program.

Sign up for mint.com and it will show you all good offers online and whatnot at the bottom. For example it put me into an HSBC online acct last year with a 1.5 interest rate and just showed me a captialone that bested it this week. Its a great consolidation tool for free as well as a good way to make sure you are getting the most out of your money. Its my little money manager.

[bmags]

damn, i thought you were giving out money.

[BFirebird]

Sign up for mint.com and it will show you all good offers online and whatnot at the bottom. For example it put me into an HSBC online acct last year with a 1.5 interest rate and just showed me a captialone that bested it this week. Its a great consolidation tool for free as well as a good way to make sure you are getting the most out of your money. Its my little money manager.

Mint.com is an awesome way to see where your money goes. I just started using it about 3 months ago and you can definitely setup up some nice budgets and see where your weak spots are in trying to save money. I was already using ING for savings so I haven't used any of their suggestions yet, but would definitely change if someone's rate would actually go up.

Edited March 2, 2010 by BFirebird

[Shamrock4Life]

for savings the online accounts are the best and will off terhe highest interest rates because they don't have to pay for the overhead costs of an physical bank. I use two with multiple accounts at each, ING and EmigrantDirect.

 

I would get a checking account at a physical bank in your area. try to shop around and find one with no ATM fees for using other peoples ATMs and, if you are lucky enough, one that will reimburse you for other banks ATM charges. I easily save $50 - $75 on these two things a year. You want a physical bank because A) you can always go to the branch to complain and B) when buying big s*** (say a down payment on a house) most places need a cashier's check. if you have an account at the bank, most banks will do this x number of times a year for free. Its a little harder to get a cashier's check from an internet checking account and western union costs a good deal of money. your best option will be with a local credit union.

 

I use Quicken for my s***, basically the same as mint.com except all my data isn't on the internet.

 

automatic scheduled deductions from paychecks work best for savings, because you usually will never see the money. just tell your employer to make two different direct deposits, one to your regular bank account (checking) and one to your savings. Or you can put it all in savings that way you physically have to transfer the money you are about to spend.

 

using credit cards for all purchases is the way to go. you shouldn't be carrying balances anyways (unless its one of those no finance charges until 2011 type deals).

[Balta1701]

Stay out of the big banks. Stay away from them like the plague. I'm working on slowly extracting myself from BofA, but it takes a long time. Sometimes a big bank can be acceptable for a credit card if you don't carry a balance (I don't), but otherwise, you're going to get yourself screwed over royally on terms and fees that you had no idea existed. You'll also get worse interest rates by a lot, especially now that they all have implicit government guarantees.

 

For a checking account and services of the sort that a teller would provide (check cashing, maybe cashing in bonds, whatever), look for a local bank or see if you have access to a credit union (I've had a membership at a credit union that had a deal with my high school for over 10 years).

 

Worth noting about smaller banks...they'll value your deposits more than a big one, but sometimes they also have a tendency to be grabbed by the FDIC. This can be a double-edged sword. A bank that is in some trouble may pay higher interest rates in order to try to attract accounts and stay solvent. On the other hand, occasionally they'll change names in the middle of the night on a Friday. As long as you stay below the FDIC limit though you won't have to worry about that hurting you except on some changes in your terms (i.e. that can cause interest rates to change). If you're just wanting to avoid that whole mess, here's a weekly-updated list of "problem banks" (currently over 600 nationwide), many of which will probably fail within the next 2 years.

[RockRaines]

Stay out of the big banks. Stay away from them like the plague. I'm working on slowly extracting myself from BofA, but it takes a long time. Sometimes a big bank can be acceptable for a credit card if you don't carry a balance (I don't), but otherwise, you're going to get yourself screwed over royally on terms and fees that you had no idea existed. You'll also get worse interest rates by a lot, especially now that they all have implicit government guarantees.

 

For a checking account and services of the sort that a teller would provide (check cashing, maybe cashing in bonds, whatever), look for a local bank or see if you have access to a credit union (I've had a membership at a credit union that had a deal with my high school for over 10 years).

 

Worth noting about smaller banks...they'll value your deposits more than a big one, but sometimes they also have a tendency to be grabbed by the FDIC. This can be a double-edged sword. A bank that is in some trouble may pay higher interest rates in order to try to attract accounts and stay solvent. On the other hand, occasionally they'll change names in the middle of the night on a Friday. As long as you stay below the FDIC limit though you won't have to worry about that hurting you except on some changes in your terms (i.e. that can cause interest rates to change). If you're just wanting to avoid that whole mess, here's a weekly-updated list of "problem banks" (currently over 600 nationwide), many of which will probably fail within the next 2 years.

Disagree on checking accts. You want that at a big bank for more access to ATM machines with no fees. Alot of the big banks give you free checking with direct deposit, I've never had to pay fees on mine ever at Chase.

[RockRaines]

I use Quicken for my s***, basically the same as mint.com except all my data isn't on the internet.

They actually federate with all of your banking websites and correlate it on a host for you, your information isnt really out "there" on the internet, its simply being pulling back from the websites that your bank and credit cards already have set up for you. And actually hosting financial information on a PC that is connect to the internet could be more dangerous as its got your financial and personal information in a one stop shop with little or no security compared to a banking website that uses 2-factor authentication and intelligent risk avoidance. . (like chase)

[Y2HH]

Bigger banks also tend to offer better online banking and bill payment options, too.

 

I have a checking account for nothing but bills/spending money -- my ATM is attached to it.

 

My savings is in my Etrade account, as well as one of my IRAs and my brokerage account.

[NorthSideSox72]

They actually federate with all of your banking websites and correlate it on a host for you, your information isnt really out "there" on the internet, its simply being pulling back from the websites that your bank and credit cards already have set up for you. And actually hosting financial information on a PC that is connect to the internet could be more dangerous as its got your financial and personal information in a one stop shop with little or no security compared to a banking website that uses 2-factor authentication and intelligent risk avoidance. . (like chase)

I know you're a Mint fan, but I don't see that being any more (or less) secure than Quicken on a PC. Quicken files are encrypted, password protected, and have a self-destruct feature. Mint or other online solutions have protected and encrypted servers. Both connect securely with financial institutions to move data back and forth. Online solutions provide more chance of being hit by baddies, but home PC's can be stolen or destroyed. There is risk in either case, just different kinds of risk.

 

And either one, by the way, is more secure than what most people still do - checkbooks and paper statements.

 

[Y2HH]

I know you're a Mint fan, but I don't see that being any more (or less) secure than Quicken on a PC. Quicken files are encrypted, password protected, and have a self-destruct feature. Mint or other online solutions have protected and encrypted servers. Both connect securely with financial institutions to move data back and forth. Online solutions provide more chance of being hit by baddies, but home PC's can be stolen or destroyed. There is risk in either case, just different kinds of risk.

 

And either one, by the way, is more secure than what most people still do - checkbooks and paper statements.

 

If it's being done online, it's less secure.

 

In addition to the secure connections between Mint and 3rd parties, they also have to maintain a connection to the user -- when using Quicken locally, that extra connection isn't occurring.

 

Also, it's much easier to target a known source than random unknown sources for such information. For example, Mint.com is a known source, you know what they transmit in and out, you know what kind of information they store and deal with, random users on the internet may or may not ever transmit such things so Mint.com is an obvious first target.

 

All could be susceptible to man in the middle and other various attacks.

Edited March 9, 2010 by Y2HH

[JorgeFabregas]

Disagree on checking accts. You want that at a big bank for more access to ATM machines with no fees. Alot of the big banks give you free checking with direct deposit, I've never had to pay fees on mine ever at Chase.

A couple of things:

 

First, a lot of credit unions and smaller banks are part of co-op networks where you can use the ATMs of any bank in the network for free. Additionally, the fact that most places take plastic and that you can get cash at nearly any grocery or big box store has drastically reduced the need for ATMs.

 

Second, my wife and I have an account with a credit union and one with Washington Mutual (now Chase).

 

It's 100% apparent how much more the credit union values our business. Their overdraft fees are more modest, they actually will reject debit/credit transactions rather than putting them through and charging a fee (the law now mandates that banks give you a choice in this, but the credit union was always this way), you can view your online statements going back years and years (whereas Chase only keeps them for 6 months unless you pay them extra), Chase charges weird fees for transferring between checking and savings, the credit union gives us instant access to large checks deposited at an ATM, whereas Chase will freeze half the amount of a large check for several days, etc. etc. etc.

 

The flip side is that the credit union is not going to give you a free toaster or gift card or whatever. They are also not going to pay your fees if you choose to use out-of-network ATMs. The flipside to those goodies, though, are the holds, increased fees, etc.

[RockRaines]

A couple of things:

 

First, a lot of credit unions and smaller banks are part of co-op networks where you can use the ATMs of any bank in the network for free. Additionally, the fact that most places take plastic and that you can get cash at nearly any grocery or big box store has drastically reduced the need for ATMs.

 

Second, my wife and I have an account with a credit union and one with Washington Mutual (now Chase).

 

It's 100% apparent how much more the credit union values our business. Their overdraft fees are more modest, they actually will reject debit/credit transactions rather than putting them through and charging a fee (the law now mandates that banks give you a choice in this, but the credit union was always this way), you can view your online statements going back years and years (whereas Chase only keeps them for 6 months unless you pay them extra), Chase charges weird fees for transferring between checking and savings, the credit union gives us instant access to large checks deposited at an ATM, whereas Chase will freeze half the amount of a large check for several days, etc. etc. etc.

 

The flip side is that the credit union is not going to give you a free toaster or gift card or whatever. They are also not going to pay your fees if you choose to use out-of-network ATMs. The flipside to those goodies, though, are the holds, increased fees, etc.

I can get online statements on my Chase acct dating back to 2004 when I opened it, and I've also never seen any fees like you described, I move money to my savings twice a month and havent seen a fee. I dont deposit checks since I have direct deposit so I dont have the pain of this freeze you speak of. Maybe this was a WaMu thing?

 

Your ATM argument is one that I am not familiar with. Are you saying that doing a POS transaction is the same as an ATM withdrawal? Maybe living in the city make it more relevant to use ATM's, but its much more convenient for me to walk to the corner and take money out of an ATM instead of driving to the grocery store and buying something to take out money.

[JorgeFabregas]

Your ATM argument is one that I am not familiar with. Are you saying that doing a POS transaction is the same as an ATM withdrawal? Maybe living in the city make it more relevant to use ATM's, but its much more convenient for me to walk to the corner and take money out of an ATM instead of driving to the grocery store and buying something to take out money.

Yes, it probably would make a difference living in the city (fewer big box stores). I make very few visits to ATMs for two reasons. One, I don't use cash much. Two, I can get cash at numerous places I shop frequently including the grocery store, drug store, Target, the pet store, auto parts store, office supply store, and on and on. I also use direct deposit as much as I can, but have big checks for various things now and again. When I lived in Rogers Park, I still had my banking with my suburban credit union and would use the ATM at the Rogers Park police office (Chicago Patrolmen's Credit Union) because it was in the network. There are also numerous 7-Elevens whose ATMs are in the network.

 

The statement issue may be a function of Chase not fully integrating WaMu's old records. However, they don't provide very old statements for our credit card that we've had with Chase for years.

[SnB]

quick question.

 

How long does it take to get your money from an online savings account to another bank account (one w/ a debit card). 1 business day, 2 days, instant?)

[Balta1701]

quick question.

 

How long does it take to get your money from an online savings account to another bank account (one w/ a debit card). 1 business day, 2 days, instant?)

Within the same bank, it should be instantaneous. Going from bank to bank, that's going to depend on each bank's rules. I was just trying to set up a way to do an EFT of funds from my Bank of America account to my CU account, and it took about a week of time for them to validate the other account. I haven't tried one yet so there's probably some lag time in there as well.

[nitetrain8601]

Usually within the same bank, the transfer is instantaneous. Bank to Bank transfers can very. Usually they take 3-5 business days. Usually it's better to write yourself a check or to perform a wire transfer(though they cost money).

[nitetrain8601]

BTW, I know Citibank is going to start charging a maintenence fee if you have less than $1000.00 in your checking account. They no longer have free checking otherwise unless you're a student.

[NorthSideSox72]

Bigger banks also tend to offer better online banking and bill payment options, too.

 

I have a checking account for nothing but bills/spending money -- my ATM is attached to it.

My savings is in my Etrade account, as well as one of my IRAs and my brokerage account.

Not anymore - E-Trade sold their savings accounts to Discover. I know because I had one, and just got the info in the mail.

 

[Texsox]

I would just like to mention one thing. A friend of mine, + or - 50 by a couple three years just retired. He never earned more than $60,000 per year, never spent more than $25,000. That's right, he saved over *half* of his income every year. I will be working at least another 15 years to retire on less than he has.

 

He built a sailboat and will soon be starting a circumnavigation of this planet with his wife.

[iamshack]

I would just like to mention one thing. A friend of mine, + or - 50 by a couple three years just retired. He never earned more than $60,000 per year, never spent more than $25,000. That's right, he saved over *half* of his income every year. I will be working at least another 15 years to retire on less than he has.

 

He built a sailboat and will soon be starting a circumnavigation of this planet with his wife.

I hope he is good at building sailboats.

[Texsox]

I hope he is good at building sailboats.

 

Very good. Mid 30 foot. Even more critical he is an excellent sailor and marine mechanic.

[Y2HH]

Not anymore - E-Trade sold their savings accounts to Discover. I know because I had one, and just got the info in the mail.

 

As long as it remains linked to my Etrade account and continues to pay interest, I don't care who owns it. heh

[lostfan]

Disagree on checking accts. You want that at a big bank for more access to ATM machines with no fees. Alot of the big banks give you free checking with direct deposit, I've never had to pay fees on mine ever at Chase.

I used to use Chase (First Chicago, then Bank One) but I had to pay fees all the time and plus the bank charges you again after the withdrawal so it just got retarded after a while. USAA makes me wonder what the hell I was ever doing at Chase. Just the lack of ATM fees alone makes me like it so much better, then when I look at the interest rates and rewards and such every individual thing just pwns it.