12k + 1k every month -- online bank?

**cptacek** · 06-22-2007, 10:00 AM

First thing, remember that if you have the money in an online savings account, you can't transfer it to your checking account immediately...it takes a few days for the money to arrive after you push the button for it to transfer. So, I would suggest you keeping a buffer in your checking account until you are comfortable with having so much less in your account. Some people operate to the penny, some keep a buffer in there...it is really personal preference.

Then, I would open an account at FNBO, link it to my checking account, and put the 12k and the extra 1k in every month, until the end of the promotion. As the promotion is coming to a close (maybe a few weeks ahead of time), I would look around for another savings account with a better rate. FNBO, at that time, may have a great rate compared to others, or it may be way behind. If you find another one that is better, open the new account, link it to your FNBO account, and put in like $1, if that is all it takes to open it. Confirm the initial deposits, and make sure you can transfer money from FNBO to the other account. Then, link the new account to your checking account. You now have the account open, and ready to go.

Once the promotion at FNBO is finished, just transfer all the money except like $1 over to then new account (check first that there is no minimum at FNBO...if there is, keep that amount there). The reason I'm saying that is because if you transfer it and close the account right away, you might lose the interest for that month. So, just wait until the interest posts to that account at the end of the month, and then you can transfer all of it.

If you linked the FNBO to the new account, it will transfer in about 3 days. If you didn't link it to the new account, and instead just linked it to your checking, it will take 3 days to transfer to your checking and then 3 days to transfer to your new account. The direct link makes it faster to get it into the higher rate.

If you keep the FNBO account or close it at that point is personal preference. I don't mind having them open...what if FNBO comes back with a great rate? If it is open already, you can just transfer the money back there. I have three checking accounts (one main account, one business account, and one for two specific bills I pay with bill-pay), two bank savings accounts (one backing up my main checking account and the other I have had since I was a kid with < $100 in it) and two online savings accounts (one with like $1 in it and the rest with FNBO, because I did what I suggested you do above), and some people think that is crazy. The only one I would think about getting rid of is the one I've had since I was a kid, but it is not hurting anything, so I have kept it open.

**Ima saver** · 06-22-2007, 10:43 AM

12K in an account paying 5% will earn you $600 a year, or $50 per month. I keep my savings local because they are giving me 5.25 % on a money market account and it is a brick and mortar bank.

**poundwise** · 06-22-2007, 10:50 AM

Ima is fortunate and gets an exceptional rate at her local bank.

For most of us, a source like FNBO is very valuable as a way to get a top rate, regardless of where we live. I would open the account with FNBO and take advantage of the promo rate. But, I wouldn't recommend that to you just based on the promo rate. The fact is, before the promo, FNBO's rate was 5.25% APY. Assuming that they will be similarly competitive after the promo, you will likely be able/want to keep your money there after the promo anyway.

I wouldn't delay though. That promo ends in September.

**HelloHello** · 06-22-2007, 03:24 PM

Thank you so much for the advice, guys!!!

I will start working on an FNBO acct immediately.

cptacek -- THANK YOU so much for the detailed explanation and the thing that you mentioned about not closing the acct immediately is very important to know!

**Aleta** · 06-23-2007, 06:41 AM

Thanks cptacek also for giving us the tip about opening another account and linking the FNBO account before closing it. It's true that if you close your account out totally before the end of the month that you will lose that months interest but, if you close out most of it and leave a small amount at the end that can be transferred out, you won't lose your interest.

I also liked FNBO's previous rate of 5.25 as well. Although Vanguard's Prime Money Market Rate was up to 514 as of Friday.

**HelloHello** · 06-23-2007, 08:09 AM

BTW, I have a friend of mine whos trying to get me into ING Direct. I told her that ING offers only 4.5% ... She replied that -- "thats not true, mine is 6 %. In fact ING increases the percent on your account every month with some hundreds of percentage." Now, is this indeed true. is it if she is a special customer who's got lots of money and they indeed to keep her give a better rate than the rate they'd give to the Average Joe?

**buzz** · 06-23-2007, 09:19 AM

There is no need to restrict yourself to one online account. I have a handful, considering:

- Servers can go out of service temporarily
- Interest rates change
- Different services are available at different banks
- Multiple Debit Cards give me access to more cash in an emergency

One bank would probably be fine for most folks. I just happen to like flexibility.

**Ima saver** · 06-23-2007, 01:01 PM

I never heard of ING paying 6%??

**fake_usa** · 07-04-2007, 10:11 AM

neither have I...

**Ima saver** · 07-04-2007, 10:58 AM

Well,I don't think they do!!

12k + 1k every month -- online bank?