(Note: interest rates updated as of 3/7/05)
As interest rates continue to rise, there is again reason to really scrutinize where you park your liquid cash, as that “free” checking account really isn’t free when your money could be earning it’s keep somewhere else. Here is how I handle most of my cash that I want to keep easy access to:
Bank of America
Interest Rate: 0%
Use: Day-to-day expenses, usually Pros: ATMs everywhere for convenient cash withdrawals and check deposits, great reliable online Bill Pay system, free tellers, they take my rolled coins and give me free wrappers, no minimums and free with Direct Deposit.
Cons: 0% interest
Interest Rate: 3.00%
Use: Bulk of cash savings (interest rate good up to $25,000)
Pros: Good interest rate, it’s a checking account instead of a savings accounts, so unlimited checkwriting and easy withdrawals with ATM card.
Cons: No local branches, Sub-par Online Banking and Bill Pay, Requires $200 monthly direct deposit and $1000 minimum to avoid fees.
Interest Rate: 2.60% (for bal. up to $10k)
Use: Emergency Money, Excess from Presidential
Pros: No minimums, decent rate. My favorite is VirtualBank, which allows you to connect 3 banks, and allows you to initiate ACH transfers both in and out to those banks. It allows you to redistribute your money as you see fit, and also can simulate a regular direct deposit from your employer.
Cons: Online only, No local branches, No ATM access, Only 6 transfers out per month without fee.