good idea to use mysavingsdirect dot com?

[pianoguy]

Hi,

We (my wife and I) are going to buy a house this year.  We are currently renting, and almost all our wealth is in index funds right now.  Our plan is, over the next six months, to gradually move money into a savings account so that we have money available for a down payment.

Is it a good idea to use mysavingsdirect.com for this purpose?  It seems to have a very high interest rate right now, much more than capitalone, which is what we currently use for the small amount of money we keep in checking/savings accounts.  I want to make sure it is a legitimate bank and we will have access to the money when we need it.  I am wondering why it isn't in nerdwallet's list of top high-interest online bank accounts.  If it has the highest interest rate, shouldn't sites like nerdwallet be recommending it, or at least mentioning it?
(https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts)

Thank you so much for your help on this!
Thank you!
Mark

Ok, thank you!

[JAYSLOL]

Sorry I find it pretty suspect when the first two post from someone are both new topics and both links to something investment related, so I won’t be clicking.  Hopefully Mods will keep a close eye. 

[pianoguy]

Jayslol,

Please read my posts again.  The reason I joined this forum and started new topics is because I am at a financial turning point in my life (finishing school, had a kid, buying house) so I have lots of questions.

As for my links, the reason why I posted them is explained in my question.

Thank you,
Mark

[harvestbook]

Nerdwallet list says "Best High-Yield Online Savings Accounts From Our Partners"

So "partnership implies some sort of mutually beneficial arrangement. The exclusion of mydirectsavings (which I know nothing about) may or may not be related to that. You might look at the money market account of the place where you have your investments. Vanguard is around 4.2 percent right now. Fidelity looks similar.

[RWD]

I trusted Nerdwallet on a 5.0/5 review of a bank for a business checking account. The experience was absolutely awful. The web interface was extremely dated and slow. The mobile app didn't work at all (couldn't even log in). Tech support on the phone had a terrible connection plus strong accent making it impossible to communicate (and one time they just pretended? they couldn't hear me at all). I was unable to even activate the debit cards because they required you to use that phone support line (web activation not available). Then they disabled my web interface access entirely without notice and that was a huge hassle trying to get it re-instated. Basically gave me a panic attack and I cleared out and closed the account as soon as I was able to regain control.

I found out later that the bank had a ton of bad reviews from actual people. But Nerdwallet was just rating them based on their claims (interest rate, fees, features, etc.) and probably never even used the service themselves. And they certainly get a kickback too. So absolutely get multiple opinions on what a good bank is for your purposes. I've been using Ally for over a decade now for our personal savings account and have been very happy with it. Currently at 3.3% 3.4% which is good enough. MySavingsDirect's web site looks a little sketchy to me, personally.

[JupiterGreen]

I also tend to stay away from dodgy looking online banks. I have an account with Marcus, they have good rates (not the best but good) and I feel comfortable recommending them for a simple high interest savings account or CD. I don't have experience with mysavingsdirect, but good luck making your decision.

[JAYSLOL]

Jayslol,

Please read my posts again.  The reason I joined this forum and started new topics is because I am at a financial turning point in my life (finishing school, had a kid, buying house) so I have lots of questions.

As for my links, the reason why I posted them is explained in my question.

Thank you,
Mark

I’m always glad to be wrong when it helps me keep my faith in humanity.  Unfortunately, there’s so many new accounts that come in and post questions, then have a second new account that chimes in assuring that the investment firm or whatever in question is great and has made them money to trick people into some kind of scam.  Always on my guard online lol. 

Anyway, I would avoid that bank, being online only and having a way above average interest rate is a bit of a red flag.  I’m not in the US, but I would stick with a big name bank or credit union with good independent reviews where your money will be protected.  If you plan to buy this year, it’s not going to make a big difference if it’s in a 3% account or a 4% account.  If it were me, and I planned to buy a house in 6 months, I’d just pull all the money now, I know markets could go back up, but they could also drop back down, we just don’t know.  Better to have your downpayment ready, and average your money back in than to average your money out and get caught in market swings when the right property shows up. 

[MustacheAndaHalf]

Sorry I find it pretty suspect when the first two post from someone are both new topics and both links to something investment related, so I won’t be clicking.  Hopefully Mods will keep a close eye.

You are right to be suspicious of that behavior.  As to nerdwallet, I have been using it for years and think links to it can be trusted.  That said, when I search for "my savings" or "savings direct" on the nerd wallet page, I do not see the website OP listed, so I don't understand why they post a list of savings accounts, and then pick something not on the list.  Did I miss it?

Vanguard pays over 4%, which is where I keep most of my Roth IRA cash.  IBKR also pays over 4%, which is where I keep cash needed in the next few years.  Finally, Schwab pays less, so I use ultra-short term government bond ETFs there.  I try to have most of my cash on brokerages, so that I get a good return at a trusted institution.

[JupiterGreen]

Sorry I find it pretty suspect when the first two post from someone are both new topics and both links to something investment related, so I won’t be clicking.  Hopefully Mods will keep a close eye.

You are right to be suspicious of that behavior.  As to nerdwallet, I have been using it for years and think links to it can be trusted.  That said, when I search for "my savings" or "savings direct" on the nerd wallet page, I do not see the website OP listed, so I don't understand why they post a list of savings accounts, and then pick something not on the list.  Did I miss it?

Vanguard pays over 4%, which is where I keep most of my Roth IRA cash.  IBKR also pays over 4%, which is where I keep cash needed in the next few years.  Finally, Schwab pays less, so I use ultra-short term government bond ETFs there.  I try to have most of my cash on brokerages, so that I get a good return at a trusted institution.

Which Vanguard money market fund are you using?  VMRXX? I have not looked at the money market options at Vanguard, though I do have an account there.

[jnw]

I was considering using My Savings Direct today, because of the 4.35% APR.  But I found out the personal/taxable Vanguard brokerage account is setup with Federal Money Market by default with a current yield of 4.4% APR.  So I just opened up a brokerage account with them.  (There is no $20 annual fee since I am doing digital only communications.)  [I already had a Solo Roth 401K with vanguard; after signing up for the personal/taxable brokerage account with them, it now shows both accounts on my account overview screen, using the same login -- convenient.]

I trust Vanguard more and I can simply do an ACH transfer each month to Vanguard and that's it.. it compounds monthly.  I don't even have to buy a fund or etf, as the default cash account is mm.   It's also nice that I can directly buy some VTI from this account as well when needed.  They told me it only takes 3 days to ACH transfer back the money to my bank, when needed.. that's liquid enough for me.

I am also no longer going to bother with the treasury bills from treasury direct (due to overhead of waiting for auction date, the delay between auction date and issue date, lack of liquidity, delay in ach transfers back and forth, the manual reinvesting etc.).. I will just transfer the extra money from my bank each month to this vanguard account -- it pays about the same.. probably better since it compounds monthly and not as much delay.