I am considering a change in the way I manage my savings.
Currently I have one savings account - the Vanguard Prime Money Market Fund. I use it for many purposes:
- My Emergency Fund.
- To pay property taxes and insurance premiums which are due once or twice a year.
- To pay for sporadic travel and shopping expenditures, which I do not provide fro in my monthly budget.
- For gifts and charity.
In short, my savings account is pretty much just treading water. It grows a lot in the first part of the year and decreases a lot over the second.
Combining all forms of "savings" in one account fails to limit me in my travel and shopping budget. When the account balance swells over my 3-6 month EF threshold, I don't think twice about dipping in for something I want.
Another problem is that I'm not deliberately saving for midterm goals such as a car or a wedding.
I think the solution is to open up at least one other savings account. My VGPMM will be my emergency fund, and I will contribute to it evenly at least until I reach 6 months of expenses. I could also continue to use that account to save for taxes and insurance (which I'd put in monthly on top of the EF savings). I would only dip into it to pay taxes/insurance or for emergencies.
I'm considering ING Direct for my second account because I've heard you can split it up into sub-accounts for specific goals. That way I can have a shopping/travel subaccount, a car subaccount, and so on as I come up with other short or mid term goals.
Does anybody have any experience or advice regarding ING Direct, or other suggestions or insights?
20 comments:
I love ING! I have a half dozen different accounts for specific things. I really like making my savings specific and defined.
"I'm considering ING Direct for my second account because I've heard you can split it up into sub-accounts for specific goals"
ING is your best choice! I have set up accounts for all kinds of categories
I love ING for just that reason. I have sub-accounts for all my major categories - efund, car (for large repairs, insurance), etc. I use my credit union savings account for my 'slush fund' (travel, gifts, etc.).
ING is the best even though their rates are a little low right now. I have been a customer since Dec 2000 and have never had a problem with them once. Customer service is great and I love the sub-account feature.
I use Emigrant Direct and Everbank myself. I really liked my Everbank money market, but the recent upping of the no-fee balance to $5000 is upsetting and might make it a no-go for you.
If you aren't already, try and take advantage of the rewards accounts out there too -- they are offering some really good interest rates. The one I know near Dallas in Grand Bank of Texas which is giving 5%! see here: http://www.grandbankoftexas.com/p_checking.htm#reward
I have had ING for 6 years and love it. I have several accounts for different goals. They also have a referal bonus plan, which many bloggers have links to for a $25 bonus with a $250 opening balance.
FYI: JD @ Get Rich Slowly recently did a post on online savings accounts.
To add another voice to the chorus, I have six sub-accounts at ING right now, most of which are funded by a combination of scheduled transfers and lumps from unexpected surpluses:
1. Emergency Fund (stays funded from year to year, knock on wood)
2. Short-Term Vacation/Gifts (I stop funding this one once it's "full" according to my budget for the year)
3. Car (I plan to buy a new-to-me one next fall so this needs to stay stable; funded monthly via automatic transfer)
4. Wedding and House (A joint account with my honey)
5. Holding Pen (presently holding a sum until I've accumulated enough to purchase some MFs)
Their customer service is fantastic!
I've heard a billion reasons for going with ING!
The only reason why *I* haven't, is because we have something called PC Financial in Canada that was here LONG before ING, and operates like an ING bank with cheques for free etc...
The best bank in the world :) Run by a fab grocery store.
When I move to the States, I'm getting a regular bank account and an ING one :)
Yes, like others, go with ING if you want to separate your money. Note, when opening the "subaccounts" you are in fact opening a new account. ING just gives you the ability to view all under one window. I use it and like it. The rate is ok like others, currently 1.5%. the only negative with ING is their float when you transfer from to their account. Once you transfer, it will only be available to access a week after the transfer started. Not the case when transferring out of ING.
ING is fine, but I'm currently mad at them -- you may have issues linking them up with Mint/Yodlee. They actively are trying to prevent account aggregation. Annoying, since I have been managing my finances with yodlee for 2 years now.
At minimum, you should have a savings account for short term revolving funds that you never expect to grow, and another one mid and long term goals, that you don't generally touch.
I have... an efund, a "short term savings" fund (which encompasses a lot of things, but mostly travel, insurance, and other revolving costs) and a couple other "goal" accounts (car, wedding). It helps me to really see if I can afford something, or if I'm just spending money that probably should be used for insurance or something next month.
I am also in the ING camp. Most of the features have been discussed, but I wanted to second thier customer service. I've been with them since 2001 and have never had poor service. When your money is not at a brick and mortar that you can walk into I think customer service has to be amazing.
I much prefer GMAC Bank, which is now Ally Bank. The new advertising campaign is hokey, but the rates are significantly better. I have a money market account with checks and an ATM card that is currently paying 1.85 percent, and an online savings account paying 2.0 percent. Money transfers quickly between Ally/GMAC and the bricks and mortar bank. The CD rates are among the best available, although I would be hesitant to commit money to long term investments at today's rates.
I love ING (if you need a $25 bonus sign-up link, e-mail me)! I have ten different sub accounts--clothing, car maintenance, emergency fund, etc. It's easy to transfer money between accounts, but it's really easy to transfer money out of my accounts too! I recently set up an electric orange checking account to attach to the subaccounts in case I need money quickly.
As if to hit the nail on the head... I love ING, too! Subaccount feature has me hooked. I have ones for my E-fund, Travel, Car (maintenance/insurance), Gifts, and Other.
:)
I suggest watching Ramit's excellent video on how to automate your finances and reading through some of his resources on the subject
http://www.iwillteachyoutoberich.com/automating-your-money/
ING is good, I recently switched to them and haven't regretted it one bit. Only bad part is that the ACH transfer take 2-3 business days to happen. Transfers within accounts of course are instant.
Add another vote to ING. The subaccounts make reaching targeted goals MUCH easier for me. As Wayne mentioned, subaccounts are actually separate accounts accessed under one customer number. That's important because that way you don't go over the limit of allowed withdrawals for savings accounts (I think it's 6 per month). You can also easily rename subaccounts, so when you've reached a short-term target, you can repurpose the account. The savings rate is a little lower than some other online banks, though.
In addition to a couple categories like car repairs and home maintenance, we also use a credit card holding account for all of our Amex charges as we go, so at least we earn a little interest before paying off each month in full.
I use ING and I love it. The fact that you can open a subaccount in less then 30 seconds is awesome. Plus you can transfer money between accounts without any hassle. The fact that it takes 2-3 days to transfer money to my checking helps me use it for what it is for - savings.
Thanks for all the great responses! Looks like I will be opening that ING account shortly! I don't really care about the slightly lower interest rate - with the amounts of money I'm dealing with and the revolving nature of most of the savings (for travel, etc), it won't make that much difference in the long run.
I was with ING but closed the account and am now with Ally. I'm loving Ally - better rates than ING - more user friendly - and you can easily setup separate sub accounts like ING. I currently have a vacation, emergency, HOA fees, water bill, and car registration accounts (since these bills aren't monthly).
Ally also seems to connect easier and better with quicken & mint.
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