Save For Specific Goals With Your Own Online Piggy Bank

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piggy bankYou may be expecting a review of the new online service SmartyPig. Well, that review is in-progress, but while doing my research I was reminded of an alternate way to create your own online “piggy bank”. Remember how you’d actually have to save your quarters to buy what you wanted? Oh, the good old days… 😉

Let’s say you want to set up multiple “baskets” or “piggy banks” of money for specific goals. Maybe you have

  • an ongoing pet medical fund to which you add to regularly instead of paying for insurance ($50 per month?)
  • an ongoing car maintenance/repair fund (I need one of these)
  • a summer vacation fund (goal: $1,000?)
  • a Christmas fund
  • …or that all-purpose emergency fund!

You want separate balances and accounting for each account to keep things neat, but you don’t want to open up 3 new accounts at 3 different banks. The good news is that this can all be done with Capital One 360 – they let you easily and instantly create multiple savings accounts that have their own balance and nickname. No credit checks, no applications, and it earns interest. Here’s how:

1) First, you’ll need a Capital One Consumer Bank account. If you have one already, you’re all set. If you opened one before and it got closed to due low balance or inactivity, you can have them re-open it by calling 1-888-ING-0727 (or you can login and do it). If you are a new customer, you can earn a $25 sign-up bonus here by opening with at least $250.

2) Open up an additional savings account (or several!). It’s not all that complicated, but it still confused me initially so I broke down the steps below with screen-by-screen walkthrough. Click on the thumbnail images for a full size screenshots.

3) Set up an automatic savings plan
Although you can schedule manual transfers, why not make it easy on yourself and set up an automated transfer schedule? You can set a fixed amount of automatic withdrawals if you have a specific goal ($100/month x 1 year = $1,200 = HDTV), or you can make it repeat indefinitely (great for our often-used pet fund).

And you’re done! You can make as many of these sub-account as you like. The cool thing is you can make withdrawals at any time (max 6 per month), and there are no minimum balances or fees. The interest rate at 0.75% APY isn’t the absolute highest, but comparatively it’s no longer that far behind other similar banks.

(FYI – I was talking with my sister about this and she told me she didn’t use her Capital One 360 account anymore. When I asked why, she said it was not because the interest rate wasn’t high enough, it was simply because they made you log in with your customer number, and she would never remember it! I just wanted to point out that now you can pick your own username (like “janedoe444”). Use it carefully though, as your password is still just a 4-digit PIN.)

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  1. Dave Diller says

    Your PIN can be longer than 4 characters, I think – 4 is just the minimum.

  2. Yep, I was expecting Smarty Pig, but this is much better. After all, I already have an ING account (on the minus side, I think SP gives more interest…). I really could have used a hands-on guide like this back when I was trying to figure out how to work subaccounts and the like!

  3. For new account, (opened new account recently) passwords are now more than 4 digits.

  4. I signed up for an ING account for the express purpose of creating sub-accounts for various savings goals.

    However, I can’t figure out whether shifting money between sub-accounts is counted as one of my 6 withdrawals per month. Do you know how that works? I would think that only withdrawals to external (non-ING) accounts are counted, but I want to be sure.

  5. The only thing I haven’t ever figured out is how to delete an ING Direct account. For example, I had 3: Car Fund, Emerg. Fund, Vacation Fund, and then we finally bought our new car last year. I couldn’t delete the Car Fund once we no longer needed it. So there it sits with like $1.00 in it.

  6. Beth Change the name and use it for the next bucket idea, I have had a wedding fund become a car fund to a emergency fund. I just change the name and then my mindset.

    Newer accounts that you create actually ask you if you want to delete the accounts if you take all the moola out

  7. Good information. Thanks. I have been manually tracking ‘earmarked’ deposits in GnuCash, but it’s nice to know about setting up multiple accounts.

    FYI, My PIN is 8 numbers – it’s not restricted to 4.

    Beth, I haven’t tried to close an account, but some google searching has revealed that a ‘quick and painless” phone call can get the job done. I didn’t see an online option, either.

  8. Kyle Gates says

    You don’t have to be that careful with your user name because you still have to answer account verification questions. If you’re paranoid you should say you’re on a public computer so you’d need to enter your username, pin, verification to log in. If your computer is secure yes you can just login with your pin.

  9. Works just as well with WaMu which offers higher rates. You can even rename your accounts now to one of your liking. I had three (3) ING subaccounts which I transfered over to three (3) WaMu online savings accounts which are ALL connected to my WaMu online checking.

  10. I don’t understand why you couldn’t just account for it on a spreadsheet? Of course, this is for those who actually make and KEEP budgets.

  11. I actually really like the idea of separate accounts for some things. After all, it really keeps things separate. But I like to simplify into: Long Term Savings, Short Term Savings and Checking. If an emergency comes up, I actually just go to the short term savings first. That usually works out. Usually gets replenished quickly. Haven’t had to go into the long term stuff, so that’s still growing nicely.

  12. Right now I too just have Checking, ST Savings, and LT Savings.

    Then, I have a spreadsheet with costs, which are to be paid from the LT Savings. For example, birthday and christmas gifts, a vacation, IRA contributions, etc. This works good for allocating how I spend my money, but I haven’t really done this to earmark what my savings are being saved towards ie. a house “fund”.

    Is ING and smartypig the only to offer this? I was banned from ING for inactivity a few years ago and they won’t let me open a new account.

  13. tell ur sister i dont remember my account # but I always answer the 4 simple questions and get the account # and then log in

    The questions are:

    last 4 digit of SSN
    Telephone #
    zip code

    As you can see, they are easy questions

  14. Thanks for posting this Jonathan! I’ve been wanting to do this, and I knew it was possible with ING, but couldn’t figure it out…

    Really, who’s gonna click on “Open an Account” when they’ve already got one? Well, now I know… and now I’m off to the ING website!

  15. I do this and it’s great. I like to save for specific things so I have about 8 sub-accounts that get bi-monthly automatic transfers when I am paid.

  16. I have an ING account, but my password/PIN is more than 4 digits…

  17. “Is ING and smartypig the only to offer this? I was banned from ING for inactivity a few years ago and they won’t let me open a new account.”
    Beth – If you empty it completely they might close it for you, but a phone call is probably required. Didn’t know about the asking to close, but that’s nice.

    4-digit PIN – I guess I’ve been with ING too long 🙂

    xmasy – True, after 3 years of cutting and pasting maybe I should have just done that 😉

    Brainy – I know! I remember trying and giving up multiple times.

    JM – You are not “banned”, but they do close accounts if you have less than $5 or so and no activity for a while. To reactivate, you cannot simply click on ‘open a new account” on their main page. They will recognize your old SSN and say “you already have an account, go away”, or something.

    You have to either call in specifically, or you have to pull out your old login info, login again first, and then “open an account” again. It’s not intuitive, I know. I had to do this recently.

    Angelo – Good info with WaMu, I’ve had multiple checking accounts for a while when they rolled out their high yield online savings account.

    So all new savings accounts also earn the 3.55% APY? I’ll have to check this out.

  18. Mike Hardin says

    I have recently opened an account that I’m using to save to pay off my wife’s student loans. She is working on her Master’s now, so the Feds are paying her interest. So rather than pay in on the loan I’m saving for it and banking the difference. I already had an ING savings account and opened a second one for this.

    I didn’t realize it was considered a “sub-account.” I thought it was just two savings accounts, EACH with a 6 withdrawal/mo limit. Is it instead only 6 withdrawals for all of your accounts combined?

  19. I’m pretty sure it is just another savings account, as it has it’s own account number. “sub-account” is probably not technically correct, but it’s one way to think of managing your accounts/goals.

  20. I guess I’m a boring person. I just have a single savings account. I save even when there is no immediate need for it because I know it will come in handy some day. Some day it may be used for my down payment / retirement / kid’s college / vacation / fun money.

    I’m also pretty boring when it comes to budgeting. My policy is called “understand the difference between needs and wants.” I satisfy my needs without remorse. Then I satisfy my wants, provided that I want something bad enough. If I want to drop 3 grand on a vacation, I would do it provided it gave me 3 grand worth of enjoyment and provided that I wasn’t sacrificing my needs.

    If everyone mastered my form of budgeting, I think a lot more people would have a grasp of their personal finances. American’s simply can’t differentiate between needs and wants. Cell phones and cable TV have turned into needs, when they clearly aren’t. More importantly, they indulge too much in wants at the expense of their needs by going into consumer debt.

  21. That’s great and thanks for letting us know about it!
    I would totally go back there and do it if ING would start competing with WaMu!

  22. I also use the multi-account scheme… but I also use the one account & spreadsheet scheme as well. Both work fine… one problem with the spreadsheet thing is that you have to remember to add back in interest you earned.

    One question though – where do you guys read that you can only have 6 withdrawals? I’m not doubting it, I just have never read that anywhere on their site? Can someone point me to it? Thanks!

  23. It is a bit off topic, and maybe it can be a future article, but why do people get so annoyed about others saving a different way?

    There area few comments above (no names, references, or @s) that seem bothered that I (or anyone else posting) like sub-accounts, and talk down to the fact that I would rather do this then keep a ledger on an excel file.

    If everyone is commenting about saving (and benefits thereof) – who cares how it is accomplished?

  24. Evan – I think that any tool which helps people save money is great. If it is 20 bank accounts or a piggy bank, that’s great. I was just trying to explain what I believe to be the most empowering savings concept out there.

  25. The issue with this is it lacks a feature to allow other people to add to your savings. THe draw of SMartyPig is you can send a link to family/friends and they can contribute. This works great for weddings, parties, etc. But SpmartyPig’s costs to contribute are too high. I wish there was an alternative.

  26. ok, so i just keep a spreadsheet that i use to split money up within my given accounts – i have spending, gas, food, car payments, mortgage, etc. This lets me track income and expenses in about 5 minutes once a week, while paying bills. What I like about one account and a spreadsheet is if I have money I want to move around, I do it on the spreadsheet and I dont have to bother with the bank (ie I have leftover spending money I want to put towards an extra car payment). Also, when I pay my credit card bill, all the money comes from one place, but I can easily split it out on my spreadsheet. There is also the ability to rob peter to pay paul – perhaps make an extra large car payment thanks to the overall balance even though my car payment balance may go negative for a couple of days.

  27. Thanks fo the info. I use to have my money in ING. Since the rate kept going down, I slowly kept taking the money out and putting it elsewhere. Then when it was close to zero, withdrew everything. Easy closure. I’m still thinking of just chucking everything into a CD, but eh. Need some liquid money, just in case.

  28. LordOfTheManor says

    re closing an ING Account

    If I recall when I transferred all money from one sub-acocunt to another it prompted me if I wanted to close the source account.

    It didn’t require a phone call for me.

  29. an ongoing car maintenance/repair fund (I need one of these)

    I honestly think that everyone does.

    We spend all of this time bashing “consumer debt” but then sympathize with people who broke their budget scrambling for money to fix their car.

    Given that vehicle-related expenses (maintenance/repair/deductibles) are inevitabilities and that vehicle expense are right behind housing & taxes for most people, I’m actually quite surprised that having a car fund and/or a house fund isn’t just standard advice. Thanks for providing an easy tool to help people handle this.

  30. Well, that’s quite handy i might say. Should really save some trouble..

  31. And how long does it take to get your money when you want to withdraw it?

  32. Nate Finch says

    Yup, I’ve been using ING to do this ever since I opened the account. It’s so much easier than a spreadsheet… not only does it keep all the interest into account, but it gives a much more tangible division between the accounts. If I want to spend money from my “house downpayment fund” I have to actually go in and transfer it. That’s a barrier to spending it, and that’s a good thing (especially for that account).

    One thing not mentioned here is an account for fun things. I find it to be incredibly freeing to put away $50 a month or so that I have allocated to spend on whatever I want, regardless of how frivolous. So, not only do I not have to feel guilty if I blow $50 on a random gadget, it also keeps me from spending more than I should on those types of things, since I know I can only spend what’s in my fun fund.

  33. I know ING increases the interest at certain points for amounts in your savings account, do they combine all savings accounts, or just go per account?

  34. “JM – You are not “banned”, but they do close accounts if you have less than $5 or so and no activity for a while. To reactivate, you cannot simply click on ‘open a new account” on their main page. They will recognize your old SSN and say “you already have an account, go away”, or something.”

    As i just found out today…. Yes, you are banned if they close your inactive account. I was attempting to open a new business savings account with them this afternoon and i was informed that because i had an account closed due to inactivity, “our banking relationship was terminated.” As the rep on the phone confirmed, my account was only closed because it was inactive.

  35. Interesting, I had mine closed due to inactivity as well, and it was reopened without any fuss.

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