When Is It Worth It To Move Your Money?

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Another good question spurned by fellow rate-chasers’ comments. We now have a lot of competition in the high yield savings account arena. So, a good question asked is “When it worth it to move your money”? This is because there may be a gap in between money transfers from Bank A to Bank B where your money will not be earning any interest, which could negate much of the benefits of moving. (Another good question is which bank or entity is earning money off the float.) Things to consider:

1) When does Bank A stop paying interest?
2) How long does it take to for the transfer?
3) When does Bank B start paying interest on your deposit?

With this information you could find out, for example, that it would take 30 days to make a rate difference of 0.25% APR worth a transfer between two specific banks. So if you think Bank A will raise the rates in 30 days, maybe it’s not worth a transfer. But if you only needed say 5 days to break even, it may be worth a shot.

Now, I haven’t done the research yet to figure all these things out. And #2 may vary. So I’m thinking a group effort might be in order. If enough people transfer a small amount of money from different combinations of banks, and report back, we can get some statistically valid (?) data that would be useful. We could start on Monday, so we can count business days more easily. We would also need to record which bank initiated (via a pull or push) the transfer.

Here are the banks I’m looking at:

Capital One 360
Emigrant Direct
HSBC Direct
Presidential Premier Savings

I currently have an account at all of these except for GMAC bank. I haven’t gotten my HSBC ATM card so I can’t set up any external transfers at HSBC yet. Here are my current links:

1) ING linked to Emigrant Direct.
2) VirtualBank linked to Presidential Bank Checking (instant transfer to savings)
3) Emigrant linked to Presidential Bank Checking

Hmm… not very many. HSBC should have the ability to link with VirtualBank, Emigrant, and Presidential. This might be trickier than I thought.

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  1. I just opened a HSBC account and linked my Emigrant to it, told it to transfer $1000. I’ll let you know how long it takes.

  2. I opened an account at GMAC on Tuesday the 13th. At the same time I did a pull from my Emigrant Direct account. I did this after the cutoff time for the day. My GMAC account shows the deposit as being made 12/14/2005 and Emigrant shows the withdrawal as being made on 12/15/2005. So maybe I even get an *extra* day of interest?

  3. wow way to much time spent on this stuff. You people need to find hobbies. You waste more time than its worth. This blog use to be good but it has turned for the worse

  4. GMAC is the fastest and you earn 1 extra day of interest. you must initiate transfer from GMAC to get this extra day of interest

    HSBC sucks big time. They eat up 3-4 days of interest.

  5. Hey, this is a great idea. Like Dave mentions, there are some combinations I’ve read about where your money will be in both accounts for a day or so. If someone had the tenacity to pull it off and could find a two-way transfer that both had those extra days of interest, one could make quite a bit of extra cash transferring back and forth on a daily basis.

    That might be a little too rate obsessive…

  6. To the anonymous poster:

    When you are talking about moving $100,000 in funds, this is an important issue to consider. For some people, making money is a hobby. Since this blog has turned for the worse, you can stop wasting your time and spend it on your hobbies.

  7. Nick,
    Your arbitrage idea is good. I think the problem would be that these accounts are limited to 6 withdrawals per month.

    P.S. John Maynard Keynes, the famous economist, made a fortune in foreign exchange arbitrage before anyone knew what arbitrage was.

  8. LoL Nick what you are asking people to do is CHECK KITING or ACH KITING and it is very illegal. This is not an arbitrage idea.

    Define Check Kiting – The Federal Bureau of Investigation defines check kiting as “a scheme which artificially inflates bank account balances, in accounts that are under common control, for purposes of obtaining unauthorized use of bank funds, through the systematic exchanging or swapping of checks between these accounts, in a manner which is designed to misuse the float that exists in the banking system.”

    Here is a copy of the Federal Statue which applies: link


    I was a GMAC member for about nine months, all i can say about them, is they have very poor customer service and did nothing to protect me. long story short, I lost my checkbook back in october 24th. I reported my checkbook lost/stolen on the same day (and within an hour of noticing i lost it), had account frozen and canceled all checks. I also wrote the bank a letter, to confirm the freeze and canceling of checks. I also flagged my credit report including all check systems.

    Well as i figured, whoever found my checkbook was forging my name on the checks. Fine. But the problem was, checks were going through and money was being withdrawn by the thousands. And I wasn’t aware of this happening until I checked my account status online three days after i flagged/canceled all checks. so i called gmac back to see whats happening, apparently no body had frozed my account nor canceled my checks. so instead they closed the account and transfered the money into a another account. Great. But when I asked them to refund me the money, the bank refused and said that i was the issuerer of the checks and the debts were my responsbility. BULLSHIT. So I hired a lawyer to fight against the bank, after two weeks they finally decided they were at fault. so they refunded $2300 that was taken from my account. But because they fought against me on this issue, i decided to close the new account.

    now i know many of you will take side with the bank, cause it does take time to investigate this kind of matter. But the fact of matter is, the bank was trying to say I never called them to freeze the account and that i was the person who wrote the checks. so that was the point i needed a lawyer to settle this matter.


    since you’re looking at different banks/investments (i am too, still) what do you think about Ford Credit Money Market? link they’re offering compound yield as much as 4.73 and up to 5.03%. These are much higher than any other money market/cd. But it also carry more risks. and with Ford’s financial troubles, not so sure if investing in their debt would be a wise choice. ….what’s your take on that?


  10. Eesh. That sounds like a nightmare, thanks for sharing. Maybe not having check-writing capability is good =)

    As for Ford, I don’t think the extra risk is worth the rate increase for me personally.

  11. Jason I dont know where you are buying T-Bill with yeilds of 4.73% as the 10 year T-bill high in the last 5 years was 4.61% that was on Nov 9 highest it gotten after than was 4.56% and as of today close they yeild was 4.39%. If you are buying 28 T-bills today they closed at 3.43% and 91 day closed at 3.81% and 182 closed at 4.27%.

    Not sure how you can compare 6 months or longer paper to Money market fund yeild and say both are about same yeild. If you truely belive that then you can buy Muni Bonds going out 6-12 months paying around 3% today full tax-free which yeild is much higher than T-bills if you take into account the tax benfits.

    The main buyers are T-bills are Non US resident and Goverments as they are not subject to US Federal Income taxes.

    Anyone paying over 28% Federal tax is much better off buying Muni Bonds over T-Bills as there effective after tax yeild will always be higher.

    Now that being said I dont recommend investing in Ford Interest Advantage because it is not FDIC insured and invests in unsecured senior debt obligations of Ford Motor Credit Company who debt is consider junk status. If you buy a ford bond today it yeilding over 11% without any liquidity support because it consider a junk bond. Why would you want a junk bond fund that pays such a low yeild? There are junk bond mutual funds that pay over 6% and invest in many companies bonds and not just 1 so incase the company does BK you dont loose all your money.

    If you want a junk bond fund try something like VWEHX it dividend yeilds is 7.14% and it share price has been almost flat for 2 years another high was $6.44 low was $6.13 currently at $6.15

  12. You don’t neeed an ATM card to do transfers at HSBC. Just call customer service and they will enable setting up a security key without the ATM card.

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