"savings account" plus bill pay, go with Ally?

[newloginuser]

Hello everyone,

Currently my wife and I allocate a portion of our paychecks to a joint checking account that covers all of our monthly bills. We do put in extra for those "just in case" bills that don't come up and are hard to plan. We've slowly started to move the money over into our banks savings account, however there interest rate is so low that we are thinking of going to Ally Bank just to make it simple.

However this got me thinking, is there an account you can put your money into that will earn you something close to a savings rate (or greater), that you can also pay bills from?

Most savings account you can't pay out of, does that mean most of you deposit directly to savings and move what is needed into checking? Is this an automated process or do you do it manually every month?

Thanks for your help and if there is a better account that Ally by all means I'd be happy to look into it.

[frugaliknowit]

You can research "high yield checking accounts".  I have one that pays 2.5% on up to $25K.  The catch is you need to do 10 or more debit card transactions within each statement cycle and only get statements via email: 

https://www.depositaccounts.com/checking/

[newloginuser]

Hmm the required 10 deposit transactions may be difficult since we just use it for a few mutual bills, but I will try to look and find one. If all else fails, our plan will be to go to Ally and just move the money from savings/checking. Not ideal, but seems easy enough.

[Radagast]

I would love if there was something like this. Your best alternatives are:
Split between several money market accounts which have competitive rates but charge transaction fees for more than 6 withdrawals per month
Alliant CU has 0.65% no strings checking last I checked
Aforementioned high yield checking accounts usually 10 or more transactions
What you said

[reeshau]

Most savings account you can't pay out of, does that mean most of you deposit directly to savings and move what is needed into checking? Is this an automated process or do you do it manually every month?

If you have a fixed amount, yes you can do so as a recurring payment, and occasionally do a one-off if more is needed.  I have an Ally MM account, and a local bank checking account.  I keep a minimum in checking, and move from Ally (manually) monthly--it's the effort of one more bill.  It takes a day to transfer (your first one may take more, but they speed you up when you establish a pattern)  If you also had Ally checking, the transfer would be instantaneous--that's the setup I have with my accounts in Ireland.  Over here, debit card transfers are quite common, and tension around card fraud is much less.  (fraud seems generally rarer--no big, splashy breaches.  But with "tap to pay" being common, petty fraud does exist)  So I keep things in my savings account *because* it's harder to reach (not on any debit card in my wallet) as well as to get some interest.  (though, not here in Europe)

[coffeefueled]

I just want to put in a plug for Ally. In my experience they have great customer service and I like that they pay atm fees for the few times I use cash. I still use their checking to pay all my bills. I usually transfer money from savings to my checking account once a month. It's easy enough that I haven't seen the need to look into paying bills from savings.