No matter what your financial position, no matter how many bank accounts you already have, you should have at least one internet-only savings account.
Why? Easy. These banks are able to offer higher interest rates (because they don’t have to deal with the costs of operating actual storefronts), for one thing. For another, having an account where you can’t run to an ATM and withdraw the money when you get a hankering for a mochaccino just makes good sense. Call it your nest egg account. Call it your rainy day account. I don’t care what you call it; just have one, and try to sock away at least a few dollars every month.
I’m somewhat partial to ING, because when I signed up way back when, they gave me $100 (and their customer service is great). Those deals are few and far between nowadays, though.
It’s not $100, but you might want to check out this deal from E*Trade. Deposit just a dollar and they’ll give you $25, plus they currently have a 5.05% APY on their savings accounts. Link it up to your checking account and set up a regular transfer of just a few bucks a month; before you know it, you’ll be able to have all the mochaccinos you want.
I’m of the opposite opinion on this one. We tried the internet savings, but found it waaaay to easy to check the balance and transfer a little to our checking while *promising* ourselves that we’d put it back with the next paycheck.
For us, it’s better to have a savings account somewhere so that I have to physically go into the bank and withdraw the cash. It’s much harder to get to, making us really think about whether or not we need it. Plus, since it’s only available during banking hours, we end up having to sleep on the decision, which is almost always beneficial. This is really for our “emergency fund”, though… something with a higher interest rate is good for long-term savings.
Thanks for the info!
Rachel: I hear what you’re saying… but what sort of interest are you getting on that account?
(I have a “money only goes in” rule with my account, btw… but I am already an incurable tightwad, so maybe that’s just me.)
5% interest? OMG thank you so much Mir. You’re sooo pretty. Please! don’t forget about us when your bank account reaches 19 gazillion bux ok 🙂
Thanks! I had a concern that the transfer fee was $15.00. I called and talked to someone who explained that it was completely free to transfer to the complete savings from your regular checking. Just FYI for anyone that has that same concern.
I’m of the same ilk as Rachel, apparently – having an account where I have to actually go to the bank (or at least find a fee-free ATM) is the only way I can keep from transferring a few bucks here and there into my checking accounts. I have a savings account with my credit union – because they have so few ATMs and branches it’s generally inconvenient for anything but savings – so I can get to the money when I need it but it’s “out of site out of mind” every other time. And direct deposit makes it super easy – I don’t ever see the money. It just gets dumped in there before I can miss it.
My husband, the family finance guy, did a huge study of this & decided on HSBC for their service and interest rate. I got one for myself called ‘Online Savings’ and earn 6% (six percent). A invested a large chunk of $ for his mother, and the way the interest mounts up fast is impressive.