When we took the Dave Ramsey Financial Peace University class a year or two ago we started saving up our 3-6 months of expenses as is recommended in baby step 3 of the 7 baby steps. Over time we got our emergency fund fully funded up to 6 months of expenses. With the economy tanking, having an uncertain job situation and now expecting our first child we felt more comfortable having an even larger emergency fund. So my wife and I kept building the account and now have a 9 month emergency fund saved up. That should be enough to cover all our expenses and then some for 9 or more months.
This is definitely a considerable amount of money to have just sitting around, and up until now this money has been sitting in a high yield savings account at Bank Of America, earning next to nothing in interest, about .50%. Granted rates at other banks aren’t anything to write home about, but you can find a rate a whole lot better than .50%. Originally the account was an account with Countrywide Bank, earning about 1.1% interest, but when Bank of America bought them out last year, the account changed, and the interest dropped. Since then we’ve been shopping around for the best rate.
This past week I closed the account with BOA, and got a check for the account balance. I’ll be depositing that in my main checking account until we complete opening our new high yield savings account. We’ve narrowed our choices down to a few different accounts which seem to have some of the highest rates, while still getting decent reviews:
- Everbank Savings Account: My Review
- Ally Bank Savings Account: My Review
- Bank of Internet Savings Account
Currently we’re leaning towards the Everbank account as it has one of the highest rates (1.51%) for the first year, in addition to a bonus rate of 2.25% for the first 3 months. We’ve also heard decent things about them, so we’re willing to give them a try. The only downsides we can see? You have to have a higher balance (above $5000) to avoid fees on the account, and the opening balance has to be at least $1500. Since those amounts are not an issue for us, and they have one of the higher rates, we’re probably going to end up opening one of these accounts.
If any of you have experience with Everbank, Ally or Bank of Internet, I’d love to hear your feedback in the comments this week – before we finalize a choice! Let us know what you think!
Great Reads From This Week
It’s been a while since I did a roundup here on the site, so I thought that today I would give out some link love. Lots of great reading out there in the PF blogosphere!
- Refinance Home Loans – How One Call Saved Us Over $41,000 (We saved almost $20,000 when we refinanced!)
- Why Health Savings Accounts Are Great (My employer may be moving to these next year)
- How to Save Money When Moving Your House (I could have used this post when we moved a few years ago!)
- Seven Ways God Works Through Our Finances (A good look at the ways that God can use money in our lives)
- Why I Bought A Portable DVD Player For My Kids (I’ve got one, so when our child comes of age, we’re all set!)
- Free Office Space: Use this Money Tip to Get Free Office Space Anywhere in the World
- How to File a Federal Tax Extension (Hopefully I won’t need this, but you never know!)
- Why the Gym is a Waste of Money (I prefer frugal exercise options as well!)
- 10 Benefits of Raised Garden Beds (I’m not much of a gardener, but everyone seems to love it. Maybe I should give it a try!)
- Financial Risk Test. (How to create and take a financial risk test, and what you need to do to mitigate your financial risks.)
- Interview with Adam Baker on Unautomating Your Finances (check out my own review below under e-books)
- How to Make a Budget (the unboring way)
- There is a time limit on filing an amended tax return
- QuickBooks Accounting Software = Small Business Relief (I probably need something like this)
- Great Financial Advice From The In Flight Safety Handbook
- Manners And Money Series (An interesting series from Lakita!)
- What’s a Good Credit Score ? Should You Care and How to Check It
- Change Banks in 5 Easy Steps
- 28 Tips to Save Money on Car Expenses and Save Thousands
Ebooks Galore!
I launched my blogging e-book a couple of weeks ago, and I’ve been getting a lot of positive feedback, thanks everyone! If you sign up for our email newsletter, you can save $7 off the normal price, plus we’re giving away $25 cash to subscriber number 500 (should be happening soon!). My e-book isn’t the only one launched recently, however. Check out these other great e-books!
- Blueprint For How To Make Money With A Blog
- Unautomate Your Finances: A New E-book To Help You Find Your Financial Focus (Written by Adam Baker at ManVsDebt.com)
- Short Term Missions Handbook (Written by staff writer Craig Ford of Money Help For Christians. A handbook for missions!)
- 52 ways To Make Extra Money E-book (Written by PT over at PTMoney.com. I’m in the e-book!)
- Money School For Couples (More than just an e-book, a financial program for couples!)
Ok, so there you go, tons of great reading for the coming week. Go forth and read!
Thanks for including my post on Moolanomy in your round-up.
My advice on this matter is always the same… unless you have boatloads of money, don’t rate chase. Customer service, banking interface, services offered, etc. are far more important factors.
FWIW: I use ING Direct for checking & savings and have NEVER been happier.
Matt Jabs´s last post ..Debt Reduction and Savings Statement – February 2010
I’ve already got an account with ING that we use for saving up for certain savings goals, however, we wanted to find something with a better rate for our big emergency fund since ING has dropped a bit lately. I DO love ING as well, however.
Thank you for the link, Pete!
Squawkfox´s last post ..Free Budget Worksheets: Household Net Worth Spreadsheet
You’re welcome!
Thanks for the link Pete.
no problem. :)
We still have a BofA account for checking purposed. I’ve had issues in the past with them though. Their customer service isn’t the best.
Craig/FFB´s last post ..Pay Off Highest Interest Or Highest Balance Credit Card – Analysis Paralysis
Thanks for the mention, Pete.
Joe Plemon´s last post ..Reverse Mortgages Part Three: What are the Disadvantages?
Good luck with the move away from BOA. Switching banks can be a drag sometimes.
Thanks for linking and good luck with the e-book. Hope the first couple of weeks have gone well.
PT´s last post ..Question of the Week: Are You Lucky?
Thanks for the mention Peter! We are currently working on our 6 months of expenses but I am sure that we will probably build that up more once we’ve started saving for retirement and college. 9 months is a great emergency fund!
Brad Chaffee´s last post ..Debt Free News From A Debt Free Reader #7
Thanks for the link!
Neal´s last post ..Simple Ideas for a Balanced Life
Thanks for the include! I’ve never used any other the final choices you have listed so I can’t be of much help there. Let us know what you decide!
Lakita (PFJourney)´s last post ..Manners & Money: Gift Registries
Ditto on countrywide to BOA thing. I also cancelled this month.
Thanks for the ebook roundup, I still need to checkout Neal’s Money School. And thanks for mentioning the QuickBooks post!
Ben´s last post ..H&R Block at Home Software
Great post.
What if you look in some non-bank institutions?
I live in Chile, and I have my savings account in Coopeuch. It’s not a bank, and they give me 4% yearly if I take some money out and 4.4% if I don’t.
Thanks!
.50 percent to 1.x percent is not enough for me to change. Especially for the small amount I have in there.
Changing banks is like moving to another deck chair on the Titanic. Sure you can do it, but what’s the point?
You may want to consider Viewpoint Bank out of Texas.
I am currently gaining 4% on my checking account.
You have to jump through a few hoops to get it, but its worth it to me.
I am not sure if they’re still running the promotion.
David/Yourfinances101´s last post ..Fresh Squeezed Florida Frugality
Consider ING or HSBC. The rates are not great now (although there aren’t many other banks with great rates either), but I have not had a problem and earn 1.1% on my accounts now. Please write an article about your experience with Everbank. I have considered them in the past, but I just haven’t had time to look into them any closer.
I already have an ING account that we use for some specific savings goals. We like it so far.
Peter,
I’ve tried a ton of banks – probably had 10+ accounts in the last 6-7 years.
I tried Everbank about two years ago and was very, very disappointed. I don’t even know if I lasted through the entire trial period. I can honestly say is is the worst bank I have ever used.
Here were my problems:
Lot of issues getting the account set up. I think they lost a form and made me resubmitt something.
Could not sucessfully link to any of my other bank accounts (specifically ING Direct). They said that Firefox users continue to face issues. I attempted money three times and each time the transfer failed.
Could not sucessuflly transfer funds to my online broker (TD Ameritrade). I even had some fees charged because Everbank did not transfer the funds as I set it up.
After a few months of not being able to access my money at all I decided to close my account and have them cut me a check.
No matter how high an interest rate they offered I’d never go back to Everbank again.
And now, my friend, I leave the choice in you able hands.
In achieving our financial and saving objectives, reassessment is always a good practice. We should always consider other alternatives with careful analysis. Good thing that you have shared this post. And oh! I have visited those links, they are great. I have fun reading on them.
Victorino´s last post ..Personal Finance tips #1: Stick to Your Financial Plan