High Yield Savings Accounts

athlete010688 · April 2014

We're slowly building our E-fund. We currently have about $1500 in our E-fund account (I realize that is not much). My thought was to open up an online savings account that gave us a higher yield. I was thinking every $500 or so to to transfer the money out of our regular savings account and move to the high-yield account. What are some the better high-yield savings accounts (in terms of interest rates plus ease of use)? I've never had an online savings account before. I currently have our 3 checking accounts and savings account through Chase.

juliebeannn · April 2014

we have Ally money market (0.85%) and savings (0.87%) accounts for our various needs (car maintenance, house maintenance, e-fund...).

athlete010688 · April 2014

juliebeannn said:

we have Ally money market (0.85%) and savings (0.87%) accounts for our various needs (car maintenance, house maintenance, e-fund...).

@juliebeannn - Do you also have a savings account at a local bank? Just curious how the logistics of an online bank account works. I haven't done too much researching on the topic, but need to.

vlagrl29 · April 2014

we are going to switch to community america very soon. their high yield savings is 4% up to 1500 and 1% on the rest of your money. Way better than the .03% we currently have.

hoffse · April 2014

My dad uses one out of Minnesota - I think it's Great Lakes checking (or something like that). He gets 3% back on up to $10,000. I'm pretty sure it's this one:

http://www.glcu.org/ultimatechecking

You have to do several things like direct deposit, etc. - he just moves money from fidelity to the checking account automatically each month to hit the direct deposit - and then he moves it back out. He and my mom have 3 of those accounts between them.

brij2006 · April 2014

I'm partial to Mutual Funds for E-funds. Just because most of them you only need $1k to open it and can have your money in your checking account within 3-5 business days. Ours earned 8% interest this year.

athlete010688 · April 2014

brij2006 said:

I'm partial to Mutual Funds for E-funds. Just because most of them you only need $1k to open it and can have your money in your checking account within 3-5 business days. Ours earned 8% interest this year.

Thanks @brij2006 - I need to look into Mutual Funds. Do you have any advice on those? Do they charge fees?

brij2006 · April 2014

Ours is through New York Life, and we just found a local representative we trust to handle it for us. There are no fee's to have it, and their representatives do not charge you a fee for any of their accounts.

The only fee you will run into is if you pull out of it early within the first year. So for the first year we just put the $1,000 minimum into it. After that year was up, we put our remaining E-fund in it.

athlete010688 · April 2014

brij2006 said:

Ours is through New York Life, and we just found a local representative we trust to handle it for us. There are no fee's to have it, and their representatives do not charge you a fee for any of their accounts.

The only fee you will run into is if you pull out of it early within the first year. So for the first year we just put the $1,000 minimum into it. After that year was up, we put our remaining E-fund in it.

Thanks for the info! I'll look into that!

ashleyjesse1112 · April 2014

We use an online bank called SmartyPig (FDIC insured) and it has 1% interest. It takes 2 business days to withdrawal from your account - so if I get paid on Friday, I do the transaction on a Wednesday. You can make as many goals as you want, but in order to withdrawal, you have to close the goal. I've thought about having 2 goals always open so I didn't have to take out all of my savings. I like that it takes a few business days to return the money because it helps fight off my Friday/Saturday shopping urges. I think you need $10 or $20 to open. I add my savings to it each week. No fees that I have seen - unless you want their cash rewards card. I don't want one. We are using this for our emergency fund & house down payment so it's accessible.

JoanE2012 · April 2014

athlete010688 said:

brij2006 said:

I'm partial to Mutual Funds for E-funds. Just because most of them you only need $1k to open it and can have your money in your checking account within 3-5 business days. Ours earned 8% interest this year.
Thanks @brij2006 - I need to look into Mutual Funds. Do you have any advice on those? Do they charge fees?

Do keep in mind that unlike most savings accounts at banks, mutual funds CAN lose money. Fluctuations can vary wildly depending on the fund type.

Also, I have yet to see a mutual fund that doesn't have fees. SOMEONE has to pay for the fund to operate!! Needless to say, there are expenses "built in" to the fund....you'll see this in the expense ratio of the prospectus or fact sheet. These are expenses YOU pay through a reduced investment rate of return. So while they're not direct costs, you are paying an expense indirectly. You want to research fund families and individual ones and be mindful of this expense ratio.

Depending on the fund family and fund, you could also have distribution and/or service fees (also known as 12b-1 fees), redemption fees (especially if bought and subsequently sold a short time later), exchange fees, sales charge (either upfront or contingent), small balance fee, etc.

Point is, read the prospectus and do your research before investing in anything.

brij2006 · April 2014

I will agree that there is a possibility that the mutual fund could lose money. But even in the crash of the market in 2006-2008 they were still earning 2-4%, which is still higher than most savings accounts. Our thoughts are that as long as we still have our original 6 months e-fund amount in there, then we don't care what it "earns." It's still going to be better than having it in a savings account.

NYL's "fee's" are made off of how well your investment does. So if your investment is earning 8%, the company will give them 1% (not off your 8% share). I feel a lot more comfortable with an investment like that than a set fee because they earn more the better your investment does. Which is incentive for them to make sure they're giving you the best earning potential on your money.

juliebeannn · April 2014

athlete010688 said:

juliebeannn said:

we have Ally money market (0.85%) and savings (0.87%) accounts for our various needs (car maintenance, house maintenance, e-fund...).

@juliebeannn - Do you also have a savings account at a local bank? Just curious how the logistics of an online bank account works. I haven't done too much researching on the topic, but need to.

athlete010688 - We do. We have a regular accounts at BofA to transfer money to and from the Ally accounts. Also, the Ally MM account has the option of getting a debit card for easier access to funds.

JoanE2012 · April 2014

brij2006 said:

I will agree that there is a possibility that the mutual fund could lose money. But even in the crash of the market in 2006-2008 they were still earning 2-4%, which is still higher than most savings accounts. Our thoughts are that as long as we still have our original 6 months e-fund amount in there, then we don't care what it "earns." It's still going to be better than having it in a savings account.
NYL's "fee's" are made off of how well your investment does. So if your investment is earning 8%, the company will give them 1% (not off your 8% share). I feel a lot more comfortable with an investment like that than a set fee because they earn more the better your investment does. Which is incentive for them to make sure they're giving you the best earning potential on your money.

Sounds like this is the fee your sales rep makes. The mutual fund itself still will have additional fees built into the fund. Unlike the fee to your sales rep, the fund fees you won't see directly.....it's "baked in" to your return.

That said, I agree, I like mutual funds. I do alot of research to ensure that I'm picking funds that have low fees with good performance. I think too many people are swayed by returns and don't pay enough attention to the fees. Why throw away extra money with high expense ratios! I also don't use a rep so I don't pay a fee that way....I invest directly with the fund company.

I will say that I think if a person has no other savings other than an emergency fund, the only mutual fund type I'd recommend is a money market or bond fund. To invest in a stock fund is just too risky if that's what you're counting on in an emergency and you have nothing else. We have our emergency fund in a cash like account and then we invest above and beyond that.

mana8503 · April 2014

We have checking and a savings through PNC. We keep 1 month of savings in there for fast transfers. Then we have the rest in capital one 360 (formally ING). I think the rate is .85%. I like it because it's easy to add an account for different things, like my H stashing away his extra monthly spending for a play toy (car). Eventually I'll like a car maintenance account, vacation, etc to be separate from the efund. It takes 2-3 business days to transfer, and it it's easy to connect the two banks to do so.

irishfemme · April 2014

mana8503 said:

We have checking and a savings through PNC. We keep 1 month of savings in there for fast transfers. Then we have the rest in capital one 360 (formally ING). I think the rate is .85%. I like it because it's easy to add an account for different things, like my H stashing away his extra monthly spending for a play toy (car). Eventually I'll like a car maintenance account, vacation, etc to be separate from the efund. It takes 2-3 business days to transfer, and it it's easy to connect the two banks to do so.

Same here. I do remember the "good old days" when that account yield was inching up to 4%. We have separate sub-accounts for car insurance/registration, "personal" savings for each of us for fun $, and our Roth IRAs (we save all year and deposit in January to get a few more months of growth out of each...we had to front a big chunk a few years ago to do this, but it's worth it now).

mana8503 · April 2014

kkaple said:

mana8503 said:

We have checking and a savings through PNC. We keep 1 month of savings in there for fast transfers. Then we have the rest in capital one 360 (formally ING). I think the rate is .85%. I like it because it's easy to add an account for different things, like my H stashing away his extra monthly spending for a play toy (car). Eventually I'll like a car maintenance account, vacation, etc to be separate from the efund. It takes 2-3 business days to transfer, and it it's easy to connect the two banks to do so.

Same here. I do remember the "good old days" when that account yield was inching up to 4%. We have separate sub-accounts for car insurance/registration, "personal" savings for each of us for fun $, and our Roth IRAs (we save all year and deposit in January to get a few more months of growth out of each...we had to front a big chunk a few years ago to do this, but it's worth it now).

----
Oh yea! I had a savings from Wells Fargo back in college, that I could put in $100/mon and $1 for each time I used my debit card... I think it was called way2save. It got 5%. Then if you didn't take out of it for a year, they added a 5% bonus. I swear at one point I was making $15/mon interest for not a huge amount in there. It ended up being our house dp after 5 years.

emily1004 · April 2014

I like Barclay's Online Savings, but I've heard you can get great rates at local credit unions. I would check it out.

High Yield Savings Accounts

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