Online Banking rules
Where do you keep your extra cash? I was keeping my money in a checking account, of course. Turns out I didn’t know that I was losing money by doing so. How so? BoA was giving me no interest on the money I had in my account while they were earning (or trying to earn) for themselves by lending my money to subprime borrowers. How smart.
And then again, inflation itself is a good 3%. So after a year, the buying power of my money will be less. So if I have $10 in my account today that is good for a couple of latte and hot choc at Starbucks, I want to enjoy the same menu a year from now as well. However, it is more than likely that Starbucks would want $10.50 then. So I must have that much in my bank. That is possible only if my bank gives me a good interest.
I figured that Certificate of Deposit (CDs) are too cumbersome. I do not want somebody to tell me when I can use my own money without penalties. So I decided to try Online Savings accounts. I opened two, just in case. They have worked wonderfully for me so far. The rate of interest is 4.5% and I can withdraw and deposit whenever I want. One account even gives me checks and lets me use any ATM across the country. They reimburse those really irritating $2-$3 fees. Now, cheap as I am, I don’t have to look around for those red BoA ATMs. Any will do. How do you beat this?