The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: 401Killer on July 19, 2018, 09:25:53 AM
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06/14/2018
Interest Earned $0.08
Previous Balance $10,000.00
New Balance $10,000.08
Thanks bank of America, the extra $0.60 that I made from carrying many thousands of dollars in my savings account in 2017 will help me out! I'm really tempted to keep my emergency account above the $10,000 mark so I can get a better interest rate. To go from 0.00008 to 0.000whocares will really help!
/miniventover
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You could get $175 (or more) over the next year at Ally among many others.
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+1 for Ally. Started using them 8(ish) years ago with a 1% interest rate and we're up to 1.75% - Sure on $10k it's only worth ~1,900 over 10 years but that's FREE MONEY if you're planning on keeping an emergency fund stashed somewhere anyway :)
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You could get $175 (or more) over the next year at Ally among many others.
I may just do that...
Be nice to just get away from BoA in general really.
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Synchrony is offering 2.4% CDs at the moment, where we keep our short term cash
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Here is a list of many that are higher if your willing to do a few things
https://www.doctorofcredit.com/high-interest-savings-to-get/
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Some other alternatives if you want to avoid losing so much to inflation:
https://forum.mrmoneymustache.com/investor-alley/how-to-choose-a-high-interest-savings-account-(or-an-alternative)/
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Switched from USAA (.3%) to Ally a few months ago. Believe I've already made more interest in the 3 months than I did last year. Easy to move money to Ally from USAA as well.
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This is how I introduced my girlfriend to investing years ago. She scoffed at how few dollars or pennies (I forget) of interest she got in her TFSA all held in a high interest savings account and proclaimed it all a scam, a perfect opening to explain what her options really are.
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I switched to a credit union years ago and haven't looked back - currently 1.75% on savings; has been steadily climbing this year. But even if you want a bank, you can do better: https://www.depositaccounts.com/ (https://www.depositaccounts.com/) They constantly track the best savings and CD rates.
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I know this is irrelevant now but I have 3 receipts from 1983 and 1984 and the interest rates back then. I drool over them!
June 17, 1983, 30 month term certificate, 12.00% interest rate
June 01, 1984, 30 month term certificate, 12.55% interest rate
July 25, 1984, 18 month term certificate, 10.00% interest rate
I have no idea how much was deposited into these certificates. It just lists an account number.
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Similar for CapitalOne 360. 1%.
Still tiny but better than 0.0000%
Make the change once to a higher yield and forget about it.
CapitalOne 360 Money Market ($10,000+) is 1.6%. I just moved my regular Capital One account $ into one because it hit 10k and I recently learned about the 1.6% rate. (This is my EF and I am only contributing a very small amt to it these days (auto deposit) as I never use it and it just kept increasing.) If the MM account falls below 10k I think you just get 1% until it's above 10k again.
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Ah, this reminds me of the days when I first started building up my emergency fund and was getting 5% in my money market account!
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Ah, this reminds me of the days when I first started building up my emergency fund and was getting 5% in my money market account!
Ah yes! My CapitalOne360 was originally an ING Orange account in something like 2006. Rates were sooooo good then!
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Even better - put that money into an Ibond (if you can live without it for a year) and guarantee you either match or beat inflation (if you end up living without it for 5).
Ally is a good company it seems if you don't want to chase rates. They are always pretty competitive.
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I know this is irrelevant now but I have 3 receipts from 1983 and 1984 and the interest rates back then. I drool over them!
June 17, 1983, 30 month term certificate, 12.00% interest rate
June 01, 1984, 30 month term certificate, 12.55% interest rate
July 25, 1984, 18 month term certificate, 10.00% interest rate
I have no idea how much was deposited into these certificates. It just lists an account number.
Rates like that today i wonder what effect it would have on the markets. I tell my kids about those rates and they just dont get it. Be nice to be getting that guaranteed somewhere on part of my money
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Interest rates were high on savings in the 80's because inflation was high - and because you had to *pay* rates like that, too.
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Lake Michigan Credit Union has a "Max Checking" account that earns 3% interest on balances up to $15000 (every dollar over $15k earns a much lower interest rate).
There are some stipulations (you need to have a direct deposit and make 10 debit card purchases per month, but even Google Wallet transfers from that bank account to another country), but to me it seems worth it...
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Same here. I earn 3% in my checking account (Evansville Teachers Federal Credit Union) on balances up to $20,000 as long as I meet the (really easy) minimum requirements. I too used to have my short term/emergency fund cash @ CO360 (and before when it was ING) but have since put all of that money in my checking. I still separate the "checking money" and "savings money" on my excel sheet as if they're in separate accounts, but it's all in one account. The GF does the same thing. Easy peasy.
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Goldman Sachs' consumer bank, Marcus, is paying 1.8% on its savings account:
https://www.marcus.com/us/en/savings/high-yield-savings
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It’s a shame I was in debt when interest rates were high, and am saving while they’re low
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BoA is a great consumer bank for regular everyday spending but I wouldn't keep a ton of money there. However they do pay me $800/month* and gave me $1,000 for free last year or year before last for babysitting their stock in Merill and gave me all the perks to go along with that.
I just put $10,000 into HSBC and they gave me $500 for holding it 60 days = 30% APY (!)
Last month alone we made $2,300 in bank bonuses just by depositing generally low amounts of cash. I find that way more effective than putting cash in low % accounts. Requires a little more work and organization but pays way more.
*in dividends
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If you have a brokerage account at Vanguard for your taxable accounts, their settlement fund is currently paying 1.85%. If you want added safety, and want your interest not to be taxed by your state, their Treasury Money Market fund yields 1.83%.
It's what I use as my "savings" account.
They weren't as competitive as my credit union when the fed funds rate was zero. As the FFR increases, it seems to do a better job of keeping up with these increases than my CU.
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Marcus by Goldman Sachs has a no gimmick 1.80% FDIC insured savings account.
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A savings account is only really good for an emergency fund or funds you'll need within a few years. Otherwise, you're losing money. 1.85% doesn't even cover inflation...
The typical savings account balance (less than $20k I presume) is pretty inconsequential anyway. Doesn't really matter whether you're earning 2% or 0%...it's still pennies compared to actually getting serious about investing. Don't get me wrong...savings accounts are excellent training wheels but I'll be damned if I let a big bank borrow a ton of money for basically free.
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It’s a shame I was in debt when interest rates were high, and am saving while they’re low
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No, because when interest is high, inflation is high, and you are paying back your debt with inflated dollars. That's the traditional economic argument, anyway.
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Which is a deliberate move by governments and banks. Keep interest rates below inflation to promote spending and borrowing cycles.
I think we are going to see rates stay very low for another 10 years and inflation may creep up too which is not good for people looking to FIRE. Markets need to boost the situation but we are at highs and although we are seeing fair value in the markets they are volatile at the mo IMHO.
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It’s a shame I was in debt when interest rates were high, and am saving while they’re low
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No, because when interest is high, inflation is high, and you are paying back your debt with inflated dollars. That's the traditional economic argument, anyway.
That's what I thought too...
Not if you aren't getting appropriate raises to cover inflation.
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While looking over other poster's stories about checking accounts paying 3% I found this...
https://www.magnifymoney.com/blog/earning-interest/best-high-yield-checking-accounts376922578/
This list has many options. Some paying 5%, but on small balances(1k-2.5k), and a bunch of options in the 3-4% range on 10k-25k balances.
My favorite so far is https://www.oneamericanbank.com/personal/checking/kasasa-cash.html. 3.5% on up to 10k for 12 debit card transactions, online banking, and at least 1 ACH.
Blue FCU also looks good at first, but reading the fine print they have a customer ranking system. Top customers(based on years of loyalty and # of products) get 4%, but someone new is getting 2%.
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While looking over other poster's stories about checking accounts paying 3% I found this...
https://www.magnifymoney.com/blog/earning-interest/best-high-yield-checking-accounts376922578/
This list has many options. Some paying 5%, but on small balances(1k-2.5k), and a bunch of options in the 3-4% range on 10k-25k balances.
My favorite so far is https://www.bluefcu.com/everyday-banking/checking/extreme-checking . 4% on up to $15,000. Complete 10 debit card transactions, estatements, and at least 1 ACH or direct deposit.
That last one seems nice the other one I was looking at is Consumer credit union but they require spending $1k a month I believe to get their rate which wasn't much better. Thanks for the links.
My other issue is these places always look so hoakey, and not really legit. Kinda concerns me.
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I saw a local bank offering 2.5% 1 year CD in the sunday paper. I think this is an ominous sign - last time I saw so many CDs offered at increasing rates was just before the 2007 crash.
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...last time I saw so many CDs offered at increasing rates was just before the 2007 crash.
Stocks might go on sale!!!
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Consumers Credit Union.
Up to 4.6% on 20 K balance, never looked back. 3.1% if you don't want to use their CC.
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I pulled my accounts out of the big banks quite a few years ago and went to a credit union. The amount of time spent dealing with bank-bullshit has dropped to zero, I get a higher interest rate (which is still low), and I've had no appreciable change in convenience... actually better since they opened a branch a half block from me a few months ago.
Those high rates in the 80s were also part of the high inflation rates of the day. Savings accounts are generally lucky to keep up with inflation and should not be viewed as a vehicle to put your dollars to work. More akin to the bowl you keep your car keys in.
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...last time I saw so many CDs offered at increasing rates was just before the 2007 crash.
Stocks might go on sale!!!
A relatives of mine sent me a dooms day article about all of the signs of the next real estate crash and this was essentially my response. “Can’t wait, maybe I’ll be able to buy another rental property.”
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If you have a brokerage account at Vanguard for your taxable accounts, their settlement fund is currently paying 1.85%. If you want added safety, and want your interest not to be taxed by your state, their Treasury Money Market fund yields 1.83%.
It's what I use as my "savings" account.
They weren't as competitive as my credit union when the fed funds rate was zero. As the FFR increases, it seems to do a better job of keeping up with these increases than my CU.
Are you sure that Vanguard Treasury Money Market Fund (VUSXX) is not subject to state tax?
Also, Vanguard Municipal Money Market Fund (VMSXX) is not subject to federal income tax. Depending on one's tax bracket may be a better alternative.
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Well I'm happy to report that I started my Ally account last week and the transfer will be complete in the next day or two!
Should have done this a long time ago...
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Vanguard's Prime Money Market (VMMXX) is also at 2.08% right now. It requires $3k minimum.
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Vanguard's Prime Money Market (VMMXX) is also at 2.08% right now. It requires $3k minimum.
Because I own Vanguard index funds this is where I park my cash for convenience. I could get slightly better performance elsewhere, but it isn't worth the hassle to me.