Better interest rate vs accessibility?

KTdidit · October 2013

As I've posted before, DH and I have been searching for a credit union to keep our house down payment/e-fund. The only one we quality for is through the school city that my mom works for. I have also been looking at an online savings through Ally. The credit union pays a tiered interest rate up to 1.5%, although we will be in the 1% tier right now, and after we buy a new house next year we will drop down to the 0.50% tier until we can build it back up. Ally pays a flat 0.83% no matter what balance you carry. Going through the credit union makes me nervous because they have one "office" inside the local high school, are open for about one hour, 2 days a week, and have no website to do online banking. Although my mom has had an account there for years with no problems, it makes me nervous that I couldn't get to the money immediately in an emergency.

Is the 0.17% extra really worth the limited accessibility?

CuriousKiddosMama · October 2013

for us, absolutely not. Those are crazy hours, and it sounds like unless you can get there on your lunch hour, that money is out of reach. I would go with Ally if I were you.

hoffse · October 2013

Frankly, that credit union would sketch me the hell out. Even though your mom's accounts have been fine, I find it totally bizarre that they don't operate during normal business hours. Are they NCUSIF insured?

The 0.17% translates to $17 less in interest per year for every $10,000 you deposit. When you look at it that way, it seems like a no-brainer to me.

If you are interested in chasing interest rates, high yield checking accounts get a better return than this. My dad has a few that pay 3%, but he has to do 10 debit card swipes per month. He simply hogs a self-checkout scanner at the grocery store once a month and does 10 transactions with groceries in one go. Then he's done until the next month. I think his is through Great Lakes credit union, and it's probably one of those credit unions you can join for a small fee. This isn't for everybody though and you have to be ok with "touching" your savings during debit card swipes. My dad always just sends an additional deposit to these accounts for whatever he spent out of them to get the requisite swipes, but it is another step.

The nice thing about Ally is it just sits there and earns interest without you doing anything.

KTdidit · October 2013

hoffse said:

Frankly, that credit union would sketch me the hell out. Even though your mom's accounts have been fine, I find it totally bizarre that they don't operate during normal business hours. Are they NCUSIF insured?

The 0.17% translates to $17 less in interest per year for every $10,000 you deposit. When you look at it that way, it seems like a no-brainer to me.

If you are interested in chasing interest rates, high yield checking accounts get a better return than this. My dad has a few that pay 3%, but he has to do 10 debit card swipes per month. He simply hogs a self-checkout scanner at the grocery store once a month and does 10 transactions with groceries in one go. Then he's done until the next month. I think his is through Great Lakes credit union, and it's probably one of those credit unions you can join for a small fee. This isn't for everybody though and you have to be ok with "touching" your savings during debit card swipes. My dad always just sends an additional deposit to these accounts for whatever he spent out of them to get the requisite swipes, but it is another step.

The nice thing about Ally is it just sits there and earns interest without you doing anything.

Very true. We decided to open up an Ally account this afternoon. Considering that we will be using it for an e-fund after we buy a house, it's important to me that we can get to it if we need it. My mom said she can always run and make a deposit or pick up a check for me, but that would make her way more involved in our finances than I'm comfortable with.

Better interest rate vs accessibility?

Re: Better interest rate vs accessibility?

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