Best Savings Account Options?

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Dues
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Best Savings Account Options?

Postby Dues » Sat Jun 16, 2012 11:28 am

TLDR: Where do you have your savings account at and what % are you earning?

I'm currently banking with Bank of America and never really paid much notice to the % interest earned on my savings account however I discovered recently that it is a pathetic .05% APY.

This has got me looking at changing banks or perhaps moving to a Credit Union. Unfortunately, I know nothing about CUs and am now in the process of trying to learn more and to find a better option (while remaining accessible) for my money to hibernate in. I would consider a 1 year CD but the % on a 1 year CD typically seems lower than the .85-1% some other savings accounts are offering.

First question is - if anyone has any recommendations for Credit Unions in Texas, specifically the Houston region. I hardly ever use a debit card or make withdraws from ATMs - I am pretty much 100% online and use credit cards to earn my 1% returns on everything. Because of this, I really don't care if it's a tiny CU and only has 1 location and 2 ATMs or whatever... You get the idea

Second question is - does anyone have any information period I should know about prior to moving my money from my Bank of America savings account into another account?

I found this site called Money Rates which talks about MMAs and Savings accounts. Is there any real specific downfall to an MMA besides they are backed differently than the FDIC?

I was considering going to American Express for the .85% interest (vs the .05 BoA interest) however there are other options that offer up to 1% interest for savings account - is there any reason not to consider those options? I don't know much about bank reputations and I've never heard of Barclays but everyone knows American Express.

I had no idea brands mattered so much for Banking heh, it does NOT just apply to cars clothing and food lol.


jeffysdad
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Postby jeffysdad » Sat Jun 16, 2012 12:11 pm

Any online bank is going to give you a better savings rate than with an account at a brick and mortar bank.

I was saving with ING Direct but switched to Discover Bank when the former's rate declined. Now Discover's rate is down. I won't save at Ally, just because I hate GM; they're an affiliate. All of them are insured, so safety shouldn't be an issue. It's really a matter of the rate and the convenience.

My checking account is at Chase; it's free with direct deposit.
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (Amazon.com, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

DavidNY
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Postby DavidNY » Sat Jun 16, 2012 2:47 pm

I recommend looking at reward checking accounts (RCAs), they routinely pay out more than savings accounts, but there are hoops.

Here's a bank in Tennessee paying 3.25% APY on a RCA but you have to take a trip there to open it.

https://www.cnbtn.com/personal/checking/rewards-checking/

Here are some more banks.

http://www.money-rates.com/rewardschecking.htm

High Yield Reward Checking Accounts - Compare reward checking account rates

As for internet savings accounts, check out TIAA Direct, now paying 1.25% APY on a money market demand account.

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ivotedale
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Postby ivotedale » Sun Jun 17, 2012 12:56 am

I can attest to American Express's high yield savings- no issues whatsoever. No minimums, fees, etc, unless you have $0 for months on end or something weird to make it inactive.

If I need to withdraw money, I usually get it in my checking within 2-3 days at most- not so instantaneous as having a linked checking/savings at a brick and mortar bank.

However, interest is payed every month, very consistent.

If anything, I'd recommend finding one savings account and sticking to it (if you go the online route). Interest rates will always fluctuate, and may not always have the highest percentage. If you decide to chase interest rates and always end up switching banks for the highest yield, it might prove counter-productive because of the delay of transferring funds (you're losing interest on those days it takes to transfer funds).

Either way, you have nowhere to go but up from leaving Bank of America, from the percentage rate you explained at .05%. I left Chase several months back from I think .01% interest savings to the once-current 1.05% Amex rate. Never looking back.

If I had to do it again, I'd go w/ ING or Ally if not for Amex.
Currently: American Express Blue Sky, American Express Zync, Chase Freedom Visa, Capital One Newcomers--->converted to Capital One Quicksilver Mastercard NO AF

Dues
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Postby Dues » Sun Jun 17, 2012 11:43 am

Thanks for the input guys =) much appreciated.

DavidNY
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Postby DavidNY » Sun Jun 17, 2012 8:12 pm

I've been very happy with TIAA Direct (TIAA-CREF is an old institution but new to online savings). Amex, Discover and Ally are all good options too, just slightly lower rates. The RCAs are a whole different ball game.

Since Capital One bought US ING operations I wouldn't bother opening an account with them, but I have a few cents in some accounts from their golden age.

Dues
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Postby Dues » Sun Jun 17, 2012 8:58 pm

Why would a bank offer a higher % yield on a RCA than a savings account? Then again, why shouldn't they I guess - checkings and savings accounts really operate no differently except you're more likely to have an overage fee if you move your $ from checking to savings....

Dues
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Postby Dues » Sun Jun 17, 2012 9:16 pm

ivotedale wrote:If anything, I'd recommend finding one savings account and sticking to it (if you go the online route). Interest rates will always fluctuate, and may not always have the highest percentage. If you decide to chase interest rates and always end up switching banks for the highest yield, it might prove counter-productive because of the delay of transferring funds (you're losing interest on those days it takes to transfer funds).


I've got no problem sticking around with X over Y if the % interest rate is minimal, not even for loss of $ but simply for the trouble of new accounts and moving money around. But, comparing the percentages posted by DavidNY some of these offer 4% versus the .85% that american express offers. That is pretty massive. Is this 4% only set to last for a very short period before it falls to .5% or something low? Anyone know of a chart to show overall yearly % rates that don't fluctuate that often? Likewise, any of these places likely to automatically raise your % interest as the economy climbs back up?

FutureBillionaire
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Postby FutureBillionaire » Sun Jun 17, 2012 9:24 pm

I moved most of my savings to online banks. I had ING Direct until the rate went down. I transferred that money to Discover bank. I have thought about moving to Amex as well. I called Suntrust and told them I was going to move the rest of my money away, they gave me an account with 2% interest for the rest of the year. Discover has been paying interest monthly.
Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
Plane tickets: CSP
Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
Clothes: Express, Amex BCP, Discover IT
Amazon: Citi Forward, Cash +
Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
Hotels and other travel: Discover Escape, CSP
Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
Balance transfers: Kroger 123 rewards
Bill Pay: Chase Ink Plus, Citi Forward
Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape

DavidNY
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Postby DavidNY » Sun Jun 17, 2012 9:54 pm

Dues, the reason RCAs pay more is because you need to do certain things to get that better APY.

If you're interested in a RCA, you need to go to the bank or CUs website you're considering and read what they will offer if you jump through a few hoops. Usually they'll require using a debit card a certain number of times, getting e-statements and maybe paying a bill out or the account with billpay and/or having direct deposit.

(Its easy to fulfill the debit card usage requirement by making a bunch of small payments to a cable or phone bill so you don't lose much by not using a rewards CC).

Also, many banks offering RCAs are small CUs, so you may need to live in a certain area or be affiliated with an organization to open an account there.



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