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Financial Planning - Financial planning in general. (Moderated)
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Posted by CB on March 28, 2007, 3:14 pm
at work i have direct deposit and it goes right to my savings but i
would like to have it go into an account that gains interest. i know
CD's are at 5%ish right now and do they have any savings accounts like
this? that my check can be deposited to and then i can pull whatever
money i need for monthly bills out. or maybe if it could direct
deposit to the account and then that bank only keeps X amount of money
per month and deposits the rest to my checking? please suggest
something for me. how do you all do it? i want to gain interest and
have X amount of money out of reach every month.
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Posted by Rich Carreiro on March 28, 2007, 3:45 pm
> at work i have direct deposit and it goes right to my savings but i
> would like to have it go into an account that gains interest. i know
> CD's are at 5%ish right now and do they have any savings accounts like
> this? that my check can be deposited to and then i can pull whatever
> money i need for monthly bills out. or maybe if it could direct
Yes.
See ingdirect.com, or emigrantdirect.com, or hsbcdirect.com, etc.
--
Rich Carreiro rlcarr@animato.arlington.ma.us
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Posted by kastnna on March 28, 2007, 3:49 pm
WIthout going into too much detail or promoting specific companies,
many banks offer "sweep accounts" to accomplish your goal. At the
close of every business day, the remaining account balance is "swept"
into an interest bearing account. Many sweep accounts require high
minimum balances however and are geared more towards businesses.
Alternatively, many brokerage firms now offer money market accounts
from which you have check writing ability. I can't speak for every
brokerage Co., but some charge flat fees (check issuance, monthly
fees, etc) that will eat into interest earnings. My local bank, on the
other hand, charges no fees and checks are only half the costs of
those charged by my brokerage firm. Online brokers/banks often tend to
be slower than brick-and-mortar banks in regards to common processes
and therefore require more attention to budgeting. If you for some
reason needed your entire account liquidated, and in cash, in a hurry
this could only be accomplished at a physical institution.
You could start by asking your local banks and by searching the online
brokerage houses. Just remember, it doesn't do any good to pay $2 in
fees to make $1 in interest and then get slapped with a 1099-int to
boot.
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Posted by Cal on March 28, 2007, 4:00 pm
Try " ING DIRECT"
Cal
> at work i have direct deposit and it goes right to my savings but i
> would like to have it go into an account that gains interest. i know
> CD's are at 5%ish right now and do they have any savings accounts like
> this? that my check can be deposited to and then i can pull whatever
> money i need for monthly bills out. or maybe if it could direct
> deposit to the account and then that bank only keeps X amount of money
> per month and deposits the rest to my checking? please suggest
> something for me. how do you all do it? i want to gain interest and
> have X amount of money out of reach every month.
>
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Posted by Andrew Koenig on March 28, 2007, 5:23 pm
> at work i have direct deposit and it goes right to my savings but i
> would like to have it go into an account that gains interest. i know
> CD's are at 5%ish right now and do they have any savings accounts like
> this? that my check can be deposited to and then i can pull whatever
> money i need for monthly bills out. or maybe if it could direct
> deposit to the account and then that bank only keeps X amount of money
> per month and deposits the rest to my checking? please suggest
> something for me. how do you all do it? i want to gain interest and
> have X amount of money out of reach every month.
There are any number of financial companies that offer money-market accounts
that you can link to your bank account.
I am personally familiar with Vanguard, having been a customer of theirs for
more than 10 years, so I'll outline how their setup works. This is from
memory, so you should consult www.vanguard.com for definitive information.
I am quite sure that other companies such as Fidelity offer similar
services, but I don't know what they are.
For a minimum initial investment of $3,000, you can open a money-market
account. These accounts pay interest monthly, based on your average daily
balance, and are currently paying about 5%. If your balance falls below
$2,500, they charge $10/year for account maintenance. If it falls below
$500, they may close the account and send you a check.
Once you have the account, you can write checks on the account. There is no
charge to write checks (and even the checks are free), but each check must
be for $250 or more.
You can set things up so that you can transfer money between this account
and your bank account electronically in either direction. There is no
charge for the transfers, but they take two business days to happen, and
there is a $100 minimum per transfer. If you transfer money *to* Vanguard,
you can't withdraw it for 10 days, but it earns interest during that period.
Of course, you can still withdraw other money in your account during the
waiting period.
You can also arrange for your direct deposit to go directly into your
Vanguard account, and then transfer to your bank account as needed. You can
also cause transfers to happen on a regular schedule.
You can do just about anything you want with your account over the web. For
that matter, you can sign up for the account over the web (though you
probably have to print out some forms and mail them in so that they have a
paper signature). For more information, I suggest you check out
www.vanguard.com (or other financial company of your choice).
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