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Showing posts with label banking. Show all posts
Showing posts with label banking. Show all posts
Saturday, January 9, 2010
Roundup: Interesting Financial Planning Articles
Roundup of interesting financial planning articles:
Monday, September 7, 2009
Are Free Checking Accounts Going the Way of the Dodo Bird?
Do you use a free checking account? I do. In fact, I have free checking accounts from three different banks, one national and one regional brick-and-mortar bank, as well as one online bank (ING Direct Electric Orange Checking). Why do I like free checking accounts? For one thing, they don't have minimum balances. I'm also one of the very few who religiously balance their checkbooks every night to the one cent and I'm proud to say that I have never had an overdraft. I also avoid ATM fees by withdrawing at my banks' ATMs. Better yet is a free checking account with tiered interest, which is the case with my ING Direct Electric Orange Checking.
How long will free checking accounts be around? This walletpop.com blog article, "Free Checking Accounts Aren't Long For This World" suggests that free checking accounts are slowly but surely vanishing. The main premise in this article is that banks need to make money in this new business environment and free checking isn't going to cut it if folks keep only a bare minimum in their free checking accounts and start being more careful about avoiding overdraft and fees.
What do you think? Do you use free checking accounts? Are you able to avoid the various fees (overdraft, ATM, etc) that banks use to make a profit off free checking accounts?
Article Link: Are Free Checking Accounts Vanishing?
.
How long will free checking accounts be around? This walletpop.com blog article, "Free Checking Accounts Aren't Long For This World" suggests that free checking accounts are slowly but surely vanishing. The main premise in this article is that banks need to make money in this new business environment and free checking isn't going to cut it if folks keep only a bare minimum in their free checking accounts and start being more careful about avoiding overdraft and fees.
What do you think? Do you use free checking accounts? Are you able to avoid the various fees (overdraft, ATM, etc) that banks use to make a profit off free checking accounts?
Article Link: Are Free Checking Accounts Vanishing?
.
Tuesday, June 23, 2009
Online Banking Rate Comparison
I must admit that I haven't done much to update my early blog post on online savings accounts. If you want to know how the various online banking institutions compare among themselves, Get Rich Slowly has done a wonderful job compiling the various rate charts for easy comparison: Online Banking: 13 Choices for Higher Interest Rates and Increased Security.
Looking at the chart, it is clear that Ally Bank (formerly known as GMAC Bank) offers some of the best rates in the industry. My Money Blog has reviewed Ally Bank here and here. I am so tempted to move some of my funds, which is sitting in an HSBC Online Savings account with a paltry 1.55% annual interest rate to them. Any thoughts?
Looking at the chart, it is clear that Ally Bank (formerly known as GMAC Bank) offers some of the best rates in the industry. My Money Blog has reviewed Ally Bank here and here. I am so tempted to move some of my funds, which is sitting in an HSBC Online Savings account with a paltry 1.55% annual interest rate to them. Any thoughts?
Link: Online Banking: 13 Choices for Higher Interest Rates and Increased Security (via Get Rich Slowly)
Monday, May 18, 2009
10 Things Your Bank Won't Tell You
SmartMoney's 10 Things Your Bank Won't Tell You is hilariously funny but hits the nail on its head.
Link: 10 Things Your Bank Won't Tell You
Enjoy!
Link: 10 Things Your Bank Won't Tell You
Enjoy!
Thursday, April 30, 2009
Suze Orman's Recession Rescue Plan
If you are one of those who follow Oprah's daily TV show, you might have caught Oprah's favorite financial guru, Suze Orman expounding on her Five-Step Recession Rescue Plan. Her five-step plan is simple but requires a fair measure of discipline:- Learn to live on half what you're used to and save the other half.
- Stash your cash, especially since credit card companies are becoming less generous.
- Make the Federal Stimulus Package work for you.
- Make your home affordable.
- Look at what you have and not what you had.
Suze advocates a 8-month emergency fund. I am planning for 12 months. She says, "no credit card usage, everybody, Pay for things in cash." As I explained in an earlier blog, I use credit card to leverage a monthly interest float and get rewards points. But Suze has a point: if you aren't disciplined enough to budget with a credit card and keep track of your daily credit card expenses, you are better off using cold, hard cash.
Sunday, April 5, 2009
My Experiences with Online Savings Accounts
My first foray into online savings account came about when I opened an ING Direct Orange Savings account in 2004. At that time, I was in a position to put aside some money for emergency use and yields on savings and CDs at banks with brick-and-mortar branches were unattractive, to say the least. Since then, I have opened a Capital One Direct Banking Online Savings Account and a HSBC Direct Savings Account. Here are my experiences with these three products:
ING Direct:
ING Direct is my oldest online only bank account. Having had no previous experience with online only banking relationship, I opened an Orange Savings Account to see how things would work. The opening process was easy. I set up a link with my existing checking account to transfer funds, and ING Direct initiated two trial deposits to verify the link (this is also the practice for opening a HSBC Direct and Capital One Direct Banking accounts).
Since then, I have opened CDs and an Electric Orange Checking Account with ING Direct I use my Electric Orange checking account to pay my credit cards and other bills through ACH transfers (be warned that Electric Orange checking does not offer conventional paper checks). I keep the funds in my Orange Savings and transfer the required funds to my Electric Orange account just before payment is due, to maximize my interest earning potential. Hence, my collection of ING Direct accounts are for meeting my current and medium term expenses.
Compared to Capital One Direct Banking and HSBC Direct, ING Direct remains the easiest to use. The online interface is extremely user friendly and highly intuitive, even for non-techies. Fund transfers with an external checking account takes 5 working days for Orange Savings, 3 working days for Electric Orange and instantaneous between different ING Direct accounts. Hence, I always transfer money between my brick-and-mortar bank's account and the Electric Orange checking, and then transfer between Electric Orange and my Orange Savings or Orange CD. In the early 2000s, ING Direct has the best rates, but today's rates are at the low-end of online only accounts: 1.5% for Orange Savings and 0.25% for Electric Orange (for deposits up to $49,999.99).
HSBC Direct:
I opened a HSBC Direct Savings Account in 2006 to take advantage of the promotional nterest rates that HSBC Direct was offering at that time. Compared to ING Direct, HSBC Direct's online interface is more cumbersome and less intuitive. I have not tried their Online Payment account (HSBC Direct's answer to ING Direct's Electric Orange) or their Online CDs. My HSBC Direct Savings Account is designated as my emergency fund. The fact that the transfer mechanism is more cumbersome keeps me from tapping into this fund too readily. I am happy to report that I have currently saved enough to cover 12 months' worth of expenses. In view of today's prolonged recession and uncertainty in the job market, I think a year's worth of emergency savings is a necessity, since I am not sure how long I would remain unemployed if I were to be laid off. The current interest rate for savings is slightly more competitive than ING Direct: 1.65%.
Capital One:
I opened a Capital One Direct Banking Online Savings Account around the same time I opened my HSBC Direct Savings Account. Compared to ING Direct and HSBC Direct, I find that Capital One has the least intuitive and most cumbersome online interface. It took me a while to figure out how to navigate their original interface. The current interface has been redesigned and is more intuitive than the first-generation version, but it still pales compared to ING Direct's user-friendliness. Indeed, even HSBC Direct's interface is more user-friendly than Capital One's interface. Today, I no longer keep any money with Capital One for three reasons: (1) the hassle of dealing with Capital One's clumsy online interface, (2) among the three banks, Capital One has the longest hold on bank transfers, and (3) they introduced a tiered-interest rate structure, which I didn't care much for.
Astute readers might wonder why I haven't tried other high-yield savings accounts with other online only banks. I am perfectly happy with my ING Direct and HSBC Direct combination, and I see no reason to complicate matters by introducing a third online account. Indeed, I tried that with Capital One and gave up.
ING Direct:
ING Direct is my oldest online only bank account. Having had no previous experience with online only banking relationship, I opened an Orange Savings Account to see how things would work. The opening process was easy. I set up a link with my existing checking account to transfer funds, and ING Direct initiated two trial deposits to verify the link (this is also the practice for opening a HSBC Direct and Capital One Direct Banking accounts).
Since then, I have opened CDs and an Electric Orange Checking Account with ING Direct I use my Electric Orange checking account to pay my credit cards and other bills through ACH transfers (be warned that Electric Orange checking does not offer conventional paper checks). I keep the funds in my Orange Savings and transfer the required funds to my Electric Orange account just before payment is due, to maximize my interest earning potential. Hence, my collection of ING Direct accounts are for meeting my current and medium term expenses.
Compared to Capital One Direct Banking and HSBC Direct, ING Direct remains the easiest to use. The online interface is extremely user friendly and highly intuitive, even for non-techies. Fund transfers with an external checking account takes 5 working days for Orange Savings, 3 working days for Electric Orange and instantaneous between different ING Direct accounts. Hence, I always transfer money between my brick-and-mortar bank's account and the Electric Orange checking, and then transfer between Electric Orange and my Orange Savings or Orange CD. In the early 2000s, ING Direct has the best rates, but today's rates are at the low-end of online only accounts: 1.5% for Orange Savings and 0.25% for Electric Orange (for deposits up to $49,999.99).
HSBC Direct:
I opened a HSBC Direct Savings Account in 2006 to take advantage of the promotional nterest rates that HSBC Direct was offering at that time. Compared to ING Direct, HSBC Direct's online interface is more cumbersome and less intuitive. I have not tried their Online Payment account (HSBC Direct's answer to ING Direct's Electric Orange) or their Online CDs. My HSBC Direct Savings Account is designated as my emergency fund. The fact that the transfer mechanism is more cumbersome keeps me from tapping into this fund too readily. I am happy to report that I have currently saved enough to cover 12 months' worth of expenses. In view of today's prolonged recession and uncertainty in the job market, I think a year's worth of emergency savings is a necessity, since I am not sure how long I would remain unemployed if I were to be laid off. The current interest rate for savings is slightly more competitive than ING Direct: 1.65%.
Capital One:
I opened a Capital One Direct Banking Online Savings Account around the same time I opened my HSBC Direct Savings Account. Compared to ING Direct and HSBC Direct, I find that Capital One has the least intuitive and most cumbersome online interface. It took me a while to figure out how to navigate their original interface. The current interface has been redesigned and is more intuitive than the first-generation version, but it still pales compared to ING Direct's user-friendliness. Indeed, even HSBC Direct's interface is more user-friendly than Capital One's interface. Today, I no longer keep any money with Capital One for three reasons: (1) the hassle of dealing with Capital One's clumsy online interface, (2) among the three banks, Capital One has the longest hold on bank transfers, and (3) they introduced a tiered-interest rate structure, which I didn't care much for.
Astute readers might wonder why I haven't tried other high-yield savings accounts with other online only banks. I am perfectly happy with my ING Direct and HSBC Direct combination, and I see no reason to complicate matters by introducing a third online account. Indeed, I tried that with Capital One and gave up.
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