best internet savings accounts???

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I have a few questions. This is all very new to me in regards to investing, high yield accounts, etc.

I have some "extra" money sitting around (its from a loan I took for undergrad two years ago) and was looking to invest it in a high yield savings account. I don't want to pay the money back on the loan because I will not have any financial security if something would happen. Basically, my checking account is sitting around with this money in it and I want to have it available if something happens (car breaking down, etc).

That all being said, I was looking at ING and they can offer a lot more than my home bank (Citizens) for the money I am looking to invest. I gathered from the website that ING will link to a foreign account. What exactly does this mean? Is it an "open highway" where I can transfer money back and forth from savings to checking at the "drop of a hat" (or a few days of processing 😉)?

Also, would a financially and mathematically savvy person explain to me how to calculate the interest accrued on such an account? I found a calculator online but it was for a one time deposit (lump sum) versus a lump sum and then monthly deposit thereafter.

Thanks so much!
 
I'm also fairly new to the whole investing thing and just opened a savings account with ING. So there are people here that know far more than I do and I'd like to hear what they have to say about your question too. Basically though, the ING or Emigrant, HSBC, whatever you choose will take the money from your checking and hold it as it collects interest. You can transfer money back and forth from that savings into your linked checking account. Most of these accounts have no minimum balance requirement. It's better than your money just sitting in your checking collecting minimal interest and yet it is still liquid money that you can use.

I'm so glad you asked about calculating the interest. I've been a little embarrassed to ask b/c it seems like it should be really simple. I've just been converting the APY to decimal than multiplying by the total money in the account, the grade school math way to figure out the yearly amount. But I think that's too simplistic? The whole compounded should change the number logic tells me. Someone more savvy please enlighten!
 
jane70 said:
I'm also fairly new to the whole investing thing and just opened a savings account with ING. So there are people here that know far more than I do and I'd like to hear what they have to say about your question too. Basically though, the ING or Emigrant, HSBC, whatever you choose will take the money from your checking and hold it as it collects interest. You can transfer money back and forth from that savings into your linked checking account. Most of these accounts have no minimum balance requirement. It's better than your money just sitting in your checking collecting minimal interest and yet it is still liquid money that you can use.

I'm so glad you asked about calculating the interest. I've been a little embarrassed to ask b/c it seems like it should be really simple. I've just been converting the APY to decimal than multiplying by the total money in the account, the grade school math way to figure out the yearly amount. But I think that's too simplistic? The whole compounded should change the number logic tells me. Someone more savvy please enlighten!
Click to expand...
I agree with your approach to the calculations. I remember calculating this in senior economics and government but that was 4 years ago in high school and that folder has since been disposed of (woops). No need to be embarassed, atleast we're attempting to do something with our money.

Anyone know how to calculate? 🙂

When my roommate gets home I'm going to see if his macroeconomics book has anything in it (if he didn't sell it).
 
jane70 said:
I'm so glad you asked about calculating the interest. I've been a little embarrassed to ask b/c it seems like it should be really simple. I've just been converting the APY to decimal than multiplying by the total money in the account, the grade school math way to figure out the yearly amount. But I think that's too simplistic? The whole compounded should change the number logic tells me. Someone more savvy please enlighten!
Click to expand...

most of us on here don't have enough money in these accounts for differences of even 1 percentage point to matter. focus on convenience and liquidity, and don't worry about opening a new account just because it's rate is 4.35 instead of the 4.25 you are currently getting. and calculating interest? that's the banks job!
 
I've heard a lot about the fed meeting and that it might change rates. Do you think its worth it to wait and then see which has he best interest rate?

Also does it ever cost money to transfer back and forth from one bank's account to another bank's account (if I were to keep my BofA account too)? Thanks
 
Why wait? It won't make any difference. If they "change rates"-- it'll be to lower them, like they have for the last several months. That does not benefit people holding cash in (formerly) high yielding saving accounts and money market funds.

My favored cash holding FSLXX has dropped from yielding 5.2% since around the first rate cuts to 4.5% last week. The only reason it hasn't dropped even more is that the fund manager bought up longer-term interest bearing securities in anticipation of the declining Federal Funds Rate.
 
etf said:
most of us on here don't have enough money in these accounts for differences of even 1 percentage point to matter. focus on convenience and liquidity, and don't worry about opening a new account just because it's rate is 4.35 instead of the 4.25 you are currently getting. and calculating interest? that's the banks job!
Click to expand...

For me it will make a difference of about $200. Not a ton of money but not something I want to wash down the drain either if I can easily avoid it. I'm not talking about switching back and forth, but opening an account that's 4.55 is nicer than 3.65. And I'd like to know how to calculate the interest just to know. I feel like I understand things better then.
 
jane70 said:
I'm also fairly new to the whole investing thing and just opened a savings account with ING. So there are people here that know far more than I do and I'd like to hear what they have to say about your question too. Basically though, the ING or Emigrant, HSBC, whatever you choose will take the money from your checking and hold it as it collects interest. You can transfer money back and forth from that savings into your linked checking account. Most of these accounts have no minimum balance requirement. It's better than your money just sitting in your checking collecting minimal interest and yet it is still liquid money that you can use.

I'm so glad you asked about calculating the interest. I've been a little embarrassed to ask b/c it seems like it should be really simple. I've just been converting the APY to decimal than multiplying by the total money in the account, the grade school math way to figure out the yearly amount. But I think that's too simplistic? The whole compounded should change the number logic tells me. Someone more savvy please enlighten!
Click to expand...

jane70 said:
For me it will make a difference of about $200. Not a ton of money but not something I want to wash down the drain either if I can easily avoid it. I'm not talking about switching back and forth, but opening an account that's 4.55 is nicer than 3.65. And I'd like to know how to calculate the interest just to know. I feel like I understand things better then.
Click to expand...

We'll find out Wednesday of this week, and then we can see how the online direct-savings banks compete against each other in the week or two after that. EmigrantDirect remains pretty competitive (even when compared to its "usual" equal, HSBCDirect), and although FNBODirect was a new player in the game and kept their 5.05% forever [to attract new customers, plus they had a 6.00% promo rate], they just recently dropped theirs to 4.30%, matching EmigrantDirect.

Your APY math seems pretty correct to me. (It's assuming, of course, that you don't deposit or withdraw for one year), but the APY given is already derived from the APR and the compounding method (annually, quarterly, monthly, daily, etc.) is plugged into the formula and spits out the APY. I think you're doing it right. APY is meant to turn a compound interest calculation into a simple interest calculation.
 
UNR.Grad said:
Also does it ever cost money to transfer back and forth from one bank's account to another bank's account (if I were to keep my BofA account too)? Thanks
Click to expand...

It doesn't with ING. The only downside is that when transfer money to ING, you have to wait a few days before you have access to the money.

Boo on the interest rates dropping.
 
Well, I ended up going with UFB Direct (didn't see the post about them doing a hard credit pull).

It was annoying to set up. Had to mail in a signature card, twice.

Customer service seemed different than BofA's, in both a good and bad way. They were more relaxed, less rushed, I got a mental image of an actual bank with carpets and stuff, versus mental image of BofA's rows of phone support people.

BUT they're also slower doing things...looking things up...they take awhile to explain things (probably haven't found the shortest most precise to answer every question like busy BofA). Sounded a bit stuffier. Their email support thing takes days to reply.

Anyway, I just used BofA's online banking to send a check to by mail to UFB Direct with initial deposit...took forever to show on UFB website.


BUT
Since then it's just been sitting there growing. I don't worry about transfer fees, b/c it's a saving's account. I'll withdraw/transfer when when I have a huge expense or when I want to close it. My BofA checking acct is for transfers.

I've made $6.40 so far....put in $1,000 in December, $2,000 in January.

interest rate was 5.10%/5.22% APY. (though it really said 9.1% APY online...just a lot of errors all over...they also said they were sending an ATM card with VISA logo...but it was just regular savings ATM car)
Jan 8 5%/5.12% APY;
Jan 15 4.89%/5%;
Jan 23 4.41%/4.5% APY.


I guess it's still good according to:
http://www.bankrate.com/brm/rate/mm...=chksav&market=416&product=33&state=US&sort=2

I might consider United One Bank, though, since I'm local.
 
That bankrate.com rate comparison is great, one quick question: Is there any benefit to having a monthly compounding account over a quarterly compounding account?
 
I would imagine, given the same APY, compounding monthly is better than quarterly.
 
Wow, UFB Direct just totally dropped my rate again. It's 3.930% (APY3.99%).
They're tricky and there's (I think) a $12 charge to withdraw/transfer...had it for 1.5months and made $6, so I'd be losing money.

So, I'm just going to open a different account with higher rate and transfer my new earnings to that. As of last week, UFB was still toward the top, now it's way down.
 
UserNameNeeded said:
Why wait? It won't make any difference. If they "change rates"-- it'll be to lower them, like they have for the last several months. That does not benefit people holding cash in (formerly) high yielding saving accounts and money market funds.

My favored cash holding FSLXX has dropped from yielding 5.2% since around the first rate cuts to 4.5% last week. The only reason it hasn't dropped even more is that the fund manager bought up longer-term interest bearing securities in anticipation of the declining Federal Funds Rate.
Click to expand...
Is it true that a mutual fund like FSLXX provides less consistent interest compared to a cash reserve like FDRXX?

Right now, the difference between the two is 4.17% for the fund and 4.1% for the cash reserve which gives me little incentive to switch. If the fund's interest rate increases substantially, though, are there any disadvantages for me to shift my money to FSLXX?
 
Koko, I have FDRXX as my core, too, and the Fidelity reps always explain it (badly) that FDRXX is a more solid choice. But from my few years at Fidelity, FSLXX has always had a better yield. And, over the long haul (especially with a bunch of cash) that difference in yield adds up.

I guess the only con is that FSLXX can't be your core cash management holding. So if you write a check, buy other securities, etc. the money travels from FSLXX to core to settlement instead of going from your core cash directly to settlement. But I've had no problem with that since that work is on Fidelity's end and they do it.
 
FYI-Countrywide is offering 4.75% for savings.
 
I also cosign Emigrant. I think right now they give 3.6 APY, which is actually way below the 5.15 they used to give. I guess a lot of banks are in trouble and can't afford to give better rates.

I think I need to do some more research and see who has the best rates as of today. Thanks for reminding me!
 
I try to stay on top of it and get the best rate. If you or anyone can find a rate better than 4.75% please post it.
 
koko_eats said:
Is it true that a mutual fund like FSLXX provides less consistent interest compared to a cash reserve like FDRXX?

Right now, the difference between the two is 4.17% for the fund and 4.1% for the cash reserve which gives me little incentive to switch. If the fund's interest rate increases substantially, though, are there any disadvantages for me to shift my money to FSLXX?
Click to expand...

FSLXX hold the same investment vehicles as FDRXX but in different proportions. A quick look at the last monthly, quarterly, or annual statement for the respective MMFs should give that information.

Sorry, too lazy to link.
 
If you live in MA or RI, Dedham savings bank is offering a checking account with 6% interest. The "catch" is you must make 12 purchases with their debit card and have one direct deposit per month. I just opened the account with them and am waiting for a trial deposit so I can transfer the money.
 
That doesn't sound too bad ^. I guess if you really make it your main checking account, that should be no problem. I wonder how long they can sustain 6% though!
 
doctorloans said:
That doesn't sound too bad ^. I guess if you really make it your main checking account, that should be no problem. I wonder how long they can sustain 6% though!
Click to expand...

That's a good question- all I know is that while the recent tax cuts dropped my schwab high interest account from 4% to 3%, the 6% remained intact, so it seems promising.
 
PreMD86 said:
That's a good question- all I know is that while the recent tax cuts dropped my schwab high interest account from 4% to 3%, the 6% remained intact, so it seems promising.
Click to expand...

Recent tax cuts? Did I miss something, or do you mean the federal fund (interest) rate cut?

Bg difference
 
IceMan0824 said:
Recent tax cuts? Did I miss something, or do you mean the federal fund (interest) rate cut?

Bg difference
Click to expand...

Err...thanks for the catch! my mistake, I meant the interest cuts.
 
for those investing in MMFs, I just read an article on yahoo finance about how MMFs that invested in SIDs are in big trouble now. I guess FDIC insured is the way to go? As for best interest rates I think my Wamu online account dropped from 4.75 to 4.25 APY. Still solid though.
 
looks like it might be time to bail on ING direct - that 3.348% isn't even keeping up with inflation. They have been burning a lot of money on television commercials too. I'm glad I put a fair amount into a CD product in September.

Is Emigrant Direct a good company? Just by the name, I imagine them financing latino drug cartels or off-shore arms trading. I assumed that's why their interest rates were so good.
 
scrubswannabe said:
for those investing in MMFs, I just read an article on yahoo finance about how MMFs that invested in SIDs are in big trouble now. I guess FDIC insured is the way to go? As for best interest rates I think my Wamu online account dropped from 4.75 to 4.25 APY. Still solid though.
Click to expand...
Or all the other 90% of MMFs that didn't invest in SIV
 
carrigallen said:
looks like it might be time to bail on ING direct - that 3.348% isn't even keeping up with inflation. They have been burning a lot of money on television commercials too. I'm glad I put a fair amount into a CD product in September.

Is Emigrant Direct a good company? Just by the name, I imagine them financing latino drug cartels or off-shore arms trading. I assumed that's why their interest rates were so good.
Click to expand...
Heh, what's wrong with that?

I've been with Emigrant for 21 months and ING for 22 months and am satisfied with both of them. That said, is it really worth it to go from ING (3.40% APY) to Emigrant (3.60% APY)? There's a few others that offer slightly more. And if you have $10K, Countrywide has a decent offering. I'm personally looking keeping my eyes on FNBO Direct and e-trade and watching how the two change with the upcoming Fed cuts.
 
Emigrant is a very old NY based brick and mortar bank. I've been very satisfied with them. I was a little wary at first, but then I did my research and they turned out fine.
 
i think my idea is much better.. why dont you get a fidelity checking account? just like doin people before, and you must invest your excess cash into the fidelity select money market fund.. you will earn like what you expecting.. maybe this my idea helps you..merchant accounts
 
doctorloans said:
Emigrant is a very old NY based brick and mortar bank. I've been very satisfied with them. I was a little wary at first, but then I did my research and they turned out fine.
Click to expand...



I've had emigrant for a few years now. Love it. Haven't had a single problem.
 
Try out rewards checking accounts or installment savings plans. They outperform every other liquid account right now (APYs in the 4% range depending on the institution).

Yeah, checking accounts now earn more interest than savings.
 
YouAreAwesome, care to mention a few of those institutions offering 4% APY?
 
UserNameNeeded said:
YouAreAwesome, care to mention a few of those institutions offering 4% APY?
Click to expand...

Coulee bank is offering 5.01% APY right now, it is expected drop to the 4% range in July.
http://www.couleebank.net/rewards_checking.php . Coulee has no local-branch visit requirement.

Check out this for more-
http://www.money-rates.com/rewardschecking.htm

Usually they only offer the high interest rate on the first 25k or 50k you have in there. So you may have to open multiple accounts (spouse) and do multiple banks.

The requirements are generally to do the below in each statement period:
1. opt out of paper statements
2. make 10 transactions with your debit card
3. make 1 ach payment or receive at least 1 direct deposit
 
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