Savings Account

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nebraskaguy85
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Savings Account

Post by nebraskaguy85 »

I am looking for thoughts/opinions on savings accounts. Currently I have a checking account at a local brick and mortar bank, and an online savings account with Ally which I am using to build my emergency fund. Does it make sense to have a brick and mortar savings account as well? If yes, would you have the brick and mortar savings at the same bank as your checking account or at a completely different brick and mortar bank where it is out of sight out of mind? Do bogleheads usually have a brick and mortar savings in conjunction with their online savings account?

I appreciate any thoughts and opinions.

Thanks for your time and effort.
123
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Re: Savings Account

Post by 123 »

I think a local brick-and-mortar bank checking account paired with a savings account at Ally is a good combination. At this time I don't think the interest yield at a brick-and-mortar bank is worth having a savings account with them.
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anon_investor
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Re: Savings Account

Post by anon_investor »

123 wrote: Sat Jun 12, 2021 12:27 pm I think a local brick-and-mortar bank checking account paired with a savings account at Ally is a good combination. At this time I don't think the interest yield at a brick-and-mortar bank is worth having a savings account with them.
+1.
Marseille07
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Re: Savings Account

Post by Marseille07 »

I'm so glad to get rid of local brick-and-mortar banks. One of them demanded that I show up in person at a branch 1000 miles away.

I am with Ally now for checking & savings, no such nonsensical demands and I can transfer money between them instantly.
LittleMaggieMae
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Re: Savings Account

Post by LittleMaggieMae »

Keep enough $$ at your brick and mortar bank to keep your banking free. If you are incurring any sort of monthly fee or "overdraft fees" or paying for any sort of monthly service... figure out what you have to do to stop that money leak*. Once you've done that - maybe keep an additional amount on top of the "minimum" in case of a lumpy expense or a 'small emergency'. (I keep 1K above what I need to free banking.) Keep the rest of your EF (or sinking funds) in a High Interest Savings account (and/or a CD or maybe an I-bond - if you have a big EF that's earning next to nothing.) Money that is used to "maintain free banking" can be thought of as part of your EF - but it should be the LAST money you access in an emergency - using it means incurring fees - at a time when you most likely don't need more expenses.

Don't be swayed by it's an interest bearing Checking Account. you can do better maintaining the minimum amount in checking (to keep it free) and putting the rest of your money else where. You may have to come to terms that your EF money isn't earning much. If you have a large EF (3 or 6 or 12 months of expenses and haven't ever had to use it ) perhaps think about doing it in tiers. Odds are you won't need the whole Pile O' Money in a suitcase at midnight if you do have an emergency (most likely job loss) that goes on for months - you will have time to pick and choose what EF money you access.

* I am often surprised when I hear that someone pays for their banking services (a monthly fee on their checking account) and thinks this is "normal" or just the cost of doing business. Don't be this person.
Last edited by LittleMaggieMae on Sat Jun 12, 2021 1:17 pm, edited 2 times in total.
BogleMelon
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Re: Savings Account

Post by BogleMelon »

Marseille07 wrote: Sat Jun 12, 2021 12:53 pm I'm so glad to get rid of local brick-and-mortar banks. One of them demanded that I show up in person at a branch 1000 miles away.
I heard horror stories before about brick-and-mortar but that is the most horrifying!! Was there a nearer branch but they required you to go to the 1000 miles away one? Were you able to get out your money successfully without traveling so far?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
Marseille07
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Re: Savings Account

Post by Marseille07 »

BogleMelon wrote: Sat Jun 12, 2021 1:16 pm
Marseille07 wrote: Sat Jun 12, 2021 12:53 pm I'm so glad to get rid of local brick-and-mortar banks. One of them demanded that I show up in person at a branch 1000 miles away.
I heard horror stories before about brick-and-mortar but that is the most horrifying!! Was there a nearer branch but they required you to go to the 1000 miles away one? Were you able to get out your money successfully without traveling so far?
I am a customer of Citibank for over two decades (they have lots of branches in CA). Zero in PNW where I am now.

About 6 months ago they flagged my 15K transfer from Marcus to my checking account as fraudulent, and they decided to silently block ACH debits without saying anything. Since ACH credits (such as salary deposits) are working fine, I didn't notice this evil act until my bill payments started bouncing.

When I called up their security department, they asked like 10 different questions and apparently I had one answer incorrect, and that's when they demanded i show up in person. I told them the closest branch is 1000 miles away, they didn't give a damn.

One day I decided to keep calling those people until I run into a good rep. After 5 hours, I passed their security questions and got my account unblocked. I immediately closed the checking account without even debiting the money, on the off chance that the debit might bounce again.

I still have their Double Cash credit card. In 3 days the statement closes, and as soon as I pay it with the cashback money, I'll lock it and shred the card. It'll be the happiest day of my life.
LittleMaggieMae
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Re: Savings Account

Post by LittleMaggieMae »

Does it make sense to have a brick and mortar savings account as well? If yes, would you have the brick and mortar savings at the same bank as your checking account or at a completely different brick and mortar bank where it is out of sight out of mind?
It might only make sense to have addition money at the bank that services your Checking Account - if doing so will waive any fees or costs for the checking account. You don't want to pay to use a checking account.

Due to having had a 30 year relationship with a local S&L I have my "main" checking account and a savings account (and a CD) there. Instead of keeping the total amount that I need for "free checking" in my checking account (and then worrying/having to remember I need to keep a minimum amount) I use the Savings Account and the CD to keep my checking free. The checking account bears no interest and as long as I don't drop the balance below 0.00 I incur no fees. I tend to have a $300 balance in checking - money goes in from my paycheck and then almost immediately out to pay bills (or transferred to long term savings at Fidelity or Ally). The Savings account is the first tier of my EF - $2000.00 the CD is to keep my banking free. I would go to Ally to get additional EF $$ should I need it. I'm OK with having 5K doing little to nothing for me (other than saving me from monthly fees).

I don't really feel a need to change my "primary checking account" to some other bank. I like the local S&L. I like what it does for my community (provides mortgages on local houses and provides business loans for people who work/live in the community without gouging/taking advantage of their situations). The service is great (any problems/issues are resolved quickly - there is always someone there who knows the procedures to fix something OR knows the answer to any question.)

If I had to change - I would look at Ally or maybe Chase or BoA both of those banks are close by and have more than a store front presence in my area.
BogleMelon
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Re: Savings Account

Post by BogleMelon »

Marseille07 wrote: Sat Jun 12, 2021 1:27 pm
BogleMelon wrote: Sat Jun 12, 2021 1:16 pm
Marseille07 wrote: Sat Jun 12, 2021 12:53 pm I'm so glad to get rid of local brick-and-mortar banks. One of them demanded that I show up in person at a branch 1000 miles away.
I heard horror stories before about brick-and-mortar but that is the most horrifying!! Was there a nearer branch but they required you to go to the 1000 miles away one? Were you able to get out your money successfully without traveling so far?
I am a customer of Citibank for over two decades (they have lots of branches in CA). Zero in PNW where I am now.

About 6 months ago they flagged my 15K transfer from Marcus to my checking account as fraudulent, and they decided to silently block ACH debits without saying anything. Since ACH credits (such as salary deposits) are working fine, I didn't notice this evil act until my bill payments started bouncing.

When I called up their security department, they asked like 10 different questions and apparently I had one answer incorrect, and that's when they demanded i show up in person. I told them the closest branch is 1000 miles away, they didn't give a damn.

One day I decided to keep calling those people until I run into a good rep. After 5 hours, I passed their security questions and got my account unblocked. I immediately closed the checking account without even debiting the money, on the off chance that the debit might bounce again.

I still have their Double Cash credit card. In 3 days the statement closes, and as soon as I pay it with the cashback money, I'll lock it and shred the card. It'll be the happiest day of my life.
That was very intense! I once had an issue with Citi checking account (unable to close) and they hit with overdraft fees because the zero balance account didn't have enough to cover monthly maintenance fees. It took me a bit till resolved but stressed me enough to decide never to get closer to them. I have too the Citi double but I stopped using it. But man! your story is a whole different level of stress. Glad you resolved it though
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
Marseille07
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Re: Savings Account

Post by Marseille07 »

BogleMelon wrote: Sat Jun 12, 2021 5:00 pm That was very intense! I once had an issue with Citi checking account (unable to close) and they hit with overdraft fees because the zero balance account didn't have enough to cover monthly maintenance fees. It took me a bit till resolved but stressed me enough to decide never to get closer to them. I have too the Citi double but I stopped using it. But man! your story is a whole different level of stress. Glad you resolved it though
Yeah, as much as I like the DoubleCash card, I'm not going to do any business with them. I'll receive less cashback but there are more important things in life.
NYCaviator
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Re: Savings Account

Post by NYCaviator »

Do what is more convenient and has better service/features. Interest rates are so low right now that it makes no sense to try and chase a higher rate. The difference between .1 and .5 is negligible (especially after tax). I find it convenient to have the savings at the same bank as checking so that transfers are instant (and I don't have to keep checking to make sure the bank-to-bank transfer went through).

I will also add that brick and mortar banks get a lot of negative comments on here, but most of the local and regional banks are just as good as the online banks. My primary bank is brick and mortar and I have no fees, competitive interest rates, great service, and products that online banks don't offer (preferred mortgage rates, business banking, etc.).
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anon_investor
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Re: Savings Account

Post by anon_investor »

Marseille07 wrote: Sat Jun 12, 2021 5:04 pm
BogleMelon wrote: Sat Jun 12, 2021 5:00 pm That was very intense! I once had an issue with Citi checking account (unable to close) and they hit with overdraft fees because the zero balance account didn't have enough to cover monthly maintenance fees. It took me a bit till resolved but stressed me enough to decide never to get closer to them. I have too the Citi double but I stopped using it. But man! your story is a whole different level of stress. Glad you resolved it though
Yeah, as much as I like the DoubleCash card, I'm not going to do any business with them. I'll receive less cashback but there are more important things in life.
I believe there is a free Fidelity 2% CB card if you have a Fidelity account to deposit the cash back.
Marseille07
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Re: Savings Account

Post by Marseille07 »

anon_investor wrote: Sat Jun 12, 2021 6:06 pm I believe there is a free Fidelity 2% CB card if you have a Fidelity account to deposit the cash back.
There is, though I'm trying to get cashback cards without foreign tx; as far as I know, only Cap1 has them. Fidelity charges 1% iirc.
musicmom
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Re: Savings Account

Post by musicmom »

We've used Chase for decades for checking and savings.
Opened an Ally savings account several years ago and closed the Chase savings.

The Chase checking is free since we meet their requirement by having monthly direct deposits over $500 (I think).
Love their online billpay and there are numerous Chase offices near us.
Though I rarely go in person since my son taught me how to deposit checks with my phone.🥴
Ivygirl
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Re: Savings Account

Post by Ivygirl »

I think we might get better service from banks if we actually paid them anything to keep our accounts there. Just sayin'.
retiredflyboy
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Re: Savings Account

Post by retiredflyboy »

I have my Ally savings account attached to my local bank checking account. Same day transfer if needed. I also have an Ally checking account with $1,500 just in case I needed ATM cash in addition to local bank. Local bank has $500 ATM limit and Ally has $1,000.
Facts are stubborn things. Everything works until it doesn’t.
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GerryL
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Re: Savings Account

Post by GerryL »

I left Chase and switched to a local credit union several years before I retired, when Move Your Money (from the big banks) was a rallying cry. Almost all my bills are on auto-pay through my CU checking account, and my SS and two tiny pensions are on auto-deposit. I keep some savings there. The larger share of my cash is at Ally. I like having a local institution I can go to for odd events like getting a money order* or if I want a bunch of cash in specific denominations.

*When I decided to pay off my mortgage about 6 months early I went to my CU to get the cash to carry to the Wells Fargo a few miles away. I mentioned what I was doing and they cut me a money order at no charge and I then drove up the road to WF and did the deed.
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cowdogman
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Re: Savings Account

Post by cowdogman »

Marseille07 wrote: Sat Jun 12, 2021 1:27 pm
BogleMelon wrote: Sat Jun 12, 2021 1:16 pm
Marseille07 wrote: Sat Jun 12, 2021 12:53 pm I'm so glad to get rid of local brick-and-mortar banks. One of them demanded that I show up in person at a branch 1000 miles away.
I heard horror stories before about brick-and-mortar but that is the most horrifying!! Was there a nearer branch but they required you to go to the 1000 miles away one? Were you able to get out your money successfully without traveling so far?
I am a customer of Citibank for over two decades (they have lots of branches in CA). Zero in PNW where I am now.

About 6 months ago they flagged my 15K transfer from Marcus to my checking account as fraudulent, and they decided to silently block ACH debits without saying anything. Since ACH credits (such as salary deposits) are working fine, I didn't notice this evil act until my bill payments started bouncing.

When I called up their security department, they asked like 10 different questions and apparently I had one answer incorrect, and that's when they demanded i show up in person. I told them the closest branch is 1000 miles away, they didn't give a damn.

One day I decided to keep calling those people until I run into a good rep. After 5 hours, I passed their security questions and got my account unblocked. I immediately closed the checking account without even debiting the money, on the off chance that the debit might bounce again.

I still have their Double Cash credit card. In 3 days the statement closes, and as soon as I pay it with the cashback money, I'll lock it and shred the card. It'll be the happiest day of my life.
Similar, but not nearly as bad a story: I too live in the PNW. I wanted to add my wife to a Citibank savings account. I filled out the paperwork (literally paper, not online) and it was rejected (no reason given) with a request for a signature guarantee from a bank. I did that and mailed it in. Rejected again and I was told I needed to go to a branch. I closed the account and cancelled my Citi credit cards.
Marseille07
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Re: Savings Account

Post by Marseille07 »

cowdogman wrote: Sun Jun 13, 2021 12:10 pm Similar, but not nearly as bad a story: I too live in the PNW. I wanted to add my wife to a Citibank savings account. I filled out the paperwork (literally paper, not online) and it was rejected (no reason given) with a request for a signature guarantee from a bank. I did that and mailed it in. Rejected again and I was told I needed to go to a branch. I closed the account and cancelled my Citi credit cards.
That's awful. Maybe Citibank is particularly bad. Although they have 723 branches nationwide, "The U.S. branches are concentrated in six metropolitan areas: New York, Chicago, Los Angeles, San Francisco, Washington, D.C., and Miami." This makes the rest of the country unserviceable.

I'm really baffled why they haven't changed their practice. I'm sure we aren't the first customers to point out how unreasonable it is to be told to go to a branch 1000 miles away. It's not our fault their branching strategy sucks. It's not difficult to allocate a branch in the most populous city in every state, for example.
Doctor Rhythm
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Re: Savings Account

Post by Doctor Rhythm »

nebraskaguy85 wrote: Sat Jun 12, 2021 12:13 pm I am looking for thoughts/opinions on savings accounts. Currently I have a checking account at a local brick and mortar bank, and an online savings account with Ally which I am using to build my emergency fund. Does it make sense to have a brick and mortar savings account as well? If yes, would you have the brick and mortar savings at the same bank as your checking account or at a completely different brick and mortar bank where it is out of sight out of mind? Do bogleheads usually have a brick and mortar savings in conjunction with their online savings account?

I appreciate any thoughts and opinions.

Thanks for your time and effort.
We have a multi-account (checking / savings / teen checking) relationship with a national brick and mortar bank in additional to on-line checking and savings accounts. In keeping with that distinction, the physical bank interfaces with the “real world” of salaries and expenses, while the internet bank talks to the “virtual money world” of investments and the taxes.

TBH, the brick and mortar savings account is sort of useless. We need to maintain a combined minimum balance to avoid fees and get some rarely used perks, so the savings account acts a buffer to achieve this. I suppose it’s also reassuring to have a large sum of cash immediately available, say to get a cashier’s check to make an impulse buy on a car or an ocelot. Hasn’t happened yet; probably never will.

If you want a real world savings account, I’d use your existing bank to be able to quickly move money between it and your checking account. I don’t see any reason to use a different bank unless you’re chasing a new customer bonus. I’m not sure I understand your point about “out of sight / out of mind”— is this to avoid spending?
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tennisplyr
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Re: Savings Account

Post by tennisplyr »

I have a major brick and mortar account for conventional banking needs and an online account for slightly better yields.
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Dandy
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Re: Savings Account

Post by Dandy »

1. We have a local brick bank checking account minimal balance to avoid fees --for convenience. Hardly use it. Did use it last year to cash some EE bonds that matured.

2. On line bank "A" Savings and money market accounts. Both SS and both pension incomes goes to this Savings Account. Doesn't have a checking account I want.

3. On line credit union Savings and Checking accounts. Twice a month Bank "A" automatically transfers money to this checking account that earns modest interest. So far this arrangement has worked well.

If this checking account starts adding fees, restrictions, etc. I'll just direct bank "A" to send money to a better checking account. Avoids having to contact SS and pension and have them redirect payments. Also, the 2X a month automatic transfer acts like my old salary payments and if I have to start adding more to meet monthly expenses I know I need to look at why my expenses are creeping up and either cut expenses or up the monthly transfers.
humblecoder
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Re: Savings Account

Post by humblecoder »

I used to have a B&M checking account (my main hub account) and a savings account at the same bank. Because of low interest rates, I then opened up a High yield savings account like the OP.

I kept the B&M savings account for some time afterwards, since it was set up as an overdraft account for my checking account. However, I was able to switch to use my credit card account as my overdraft account. When I did that, the B&M savings served no purpose anymore, so I closed it.
lostdog
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Re: Savings Account

Post by lostdog »

We moved to Capital One 360 checking. When we have quite a bit more cash I'll open a Capital One Performance Savings account.

So far we're happy with Capital One.

A long time member here by the name of "Toons" has been using Capital One for years with no issues.
LittleMaggieMae
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Re: Savings Account

Post by LittleMaggieMae »

I live in an area of older suburbs (built up from the 30's thru the 60's) - the old joke was a "Bank, a Bar, and a Bakery on every corner!"

Perhaps when discussing Brick and Mortar banks - modern ones may not all be the same...

When I think Brick and Mortar bank - I think of a building that looks like a Greek or Roman Temple. Or a more modern slightly smaller foot print than a Temple Bank - 70's era 2 story brick building with a 2 or 3 line drive thru on the side. All these buildings had a lobby, and then a teller area and then an "office" area where the customer service people sat.

My current Chase bank (new to my area) took over a White Hen Pantry store about 1200 square feet and converted it to a "banking space". It has a bank of ATMs, and a couple of desks/cubicles that CS people could use (there's no computer or phones on these desks and I'm not sure there are any CS people at this location). There's a bullet proof glass encased back alcove with 1 teller behind the glass. I'm not sure I could apply for a mortgage loan or any other sort of banking beyond withdrawals, deposits, maybe a money order or cashiers check. I would have to drive 10 miles to the bigger main bank (Chase took over an old Temple Bank in another suburb - and just has storefront "branches" in surrounding suburbs).

I do use a "branch" of the local S&L - when I needed to do a wire transfer - I had to go across town (less than 2 miles) to the main branch (which is vaguely Temple like (and has been there since 1930 or so) and has a marble lobby and marble and wood teller counter (and for nostalgia - one of the original "marble counter/tables" that matches the rest of the marble and wood in the main banking area where you could get a deposit slip and fill it out before getting in line for a teller).
When I closed on my first mortgage - the closing took place in one of the conference rooms (a very posh/stodgy room) on the second floor of the main bank. had to take a marble staircase to get to it.
Last edited by LittleMaggieMae on Mon Jun 14, 2021 10:19 am, edited 2 times in total.
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anon_investor
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Re: Savings Account

Post by anon_investor »

lostdog wrote: Mon Jun 14, 2021 9:41 am We moved to Capital One 360 checking. When we have quite a bit more cash I'll open a Capital One Performance Savings account.

So far we're happy with Capital One.

A long time member here by the name of "Toons" has been using Capital One for years with no issues.
I got rid of my Capital One 360 Savings a while ago because Capital One played the game where they would create a "new" type of online account with a better rate of interest, but then not make the existing online savings account types have the best interest.

I just use Ally Bank checking/savings (with a b&m checking for physical bank stuff).
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FOGU
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Re: Savings Account

Post by FOGU »

Ivygirl wrote: Sat Jun 12, 2021 6:59 pm I think we might get better service from banks if we actually paid them anything to keep our accounts there. Just sayin'.
The banks get paid by being able to lend out customer deposits, n'est pas?
Not to mention having a nearly captive audience to pitch all manner of financial products and services.
sam1838
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Re: Savings Account

Post by sam1838 »

I used to have a Chase checking and Ally savings. Then I realized it was more profitable to open and close Chase checking every 2 years for $300 and switched to Ally checking. I don't need a brick and mortar account right now, but I figure if I ever did I'd just look for the best bank account churning offer and pick that one temporarily.
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FrugalInvestor
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Re: Savings Account

Post by FrugalInvestor »

Marseille07 wrote: Sat Jun 12, 2021 5:04 pm
BogleMelon wrote: Sat Jun 12, 2021 5:00 pm That was very intense! I once had an issue with Citi checking account (unable to close) and they hit with overdraft fees because the zero balance account didn't have enough to cover monthly maintenance fees. It took me a bit till resolved but stressed me enough to decide never to get closer to them. I have too the Citi double but I stopped using it. But man! your story is a whole different level of stress. Glad you resolved it though
Yeah, as much as I like the DoubleCash card, I'm not going to do any business with them. I'll receive less cashback but there are more important things in life.
We've had a checking account (actually two) with BofA for a couple of decades. The second one is to keep our medical insurance $ separate to avoid an inadvertent overdraft since the premiums are withdrawn automatically.
Both checking accounts are fee free providing we make an auto-deposit of at least $250/month which we do automatically from our investment account...so zero fees and zero hassles. My wife likes their Billpay system which is free along with the checking.

We also have a Citi Double Cash card which is our primary card for everyday purchases and a BofA cash back card which generates 3% cash back for online purchases. We like them both and have never had a problem with either one.

I'm always surprised to hear about the problems that some people have with bank accounts and credit cards. I guess we've been very fortunate over the years.
Have a plan, stay the course and simplify. Then ignore the noise!
Marseille07
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Re: Savings Account

Post by Marseille07 »

FrugalInvestor wrote: Mon Jun 14, 2021 7:29 pm We've had a checking account (actually two) with BofA for a couple of decades. The second one is to keep our medical insurance $ separate to avoid an inadvertent overdraft since the premiums are withdrawn automatically.
Both checking accounts are fee free providing we make an auto-deposit of at least $250/month which we do automatically from our investment account...so zero fees and zero hassles. My wife likes their Billpay system which is free along with the checking.

We also have a Citi Double Cash card which is our primary card for everyday purchases and a BofA cash back card which generates 3% cash back for online purchases. We like them both and have never had a problem with either one.

I'm always surprised to hear about the problems that some people have with bank accounts and credit cards. I guess we've been very fortunate over the years.
Citi credit cards are fine imo. Double Cash is a great card and I'll miss it for sure. Cutting ties with them is a matter of principle, not financial.

BofA & Chase are fine choices since they have branches everywhere. Citi, not so much.

I'm happy with Ally now though, I really don't have much banking needs where I have to go visit a branch or Ally can't deal with online.
Last edited by Marseille07 on Tue Jun 15, 2021 12:33 am, edited 1 time in total.
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jabberwockOG
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Re: Savings Account

Post by jabberwockOG »

I have had a free "no fee" checking account with the same bank (admittedly thru several name changes, mergers/etc.) for 32 years. Never paid them a dime in fees, except maybe last 5 years, when they started charging a $15-20 for printing 200 paper checks.

We keep savings and CDs floating between various online financial institutions because rates are always better. We keep a relatively small balance in checking, and do a monthly transfer from savings into the checking account to fund ongoing bill paying/expenses.
Samueul
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Re: Savings Account

Post by Samueul »

Does anyone feel that savings accounts are pretty pointless right now? I only keep enough in my HYSA at Ally to cover a few months expenses and any short term cash needs. Everything else goes into investments. The interest I’m making on savings is eaten alive by inflation and I’m almost to the point of not maintaining the account and moving everything back to checking just to have less things to deal with.
Ivygirl
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Re: Savings Account

Post by Ivygirl »

FOGU wrote: Mon Jun 14, 2021 6:38 pm
Ivygirl wrote: Sat Jun 12, 2021 6:59 pm I think we might get better service from banks if we actually paid them anything to keep our accounts there. Just sayin'.
The banks get paid by being able to lend out customer deposits, n'est pas?
Not to mention having a nearly captive audience to pitch all manner of financial products and services.
It's because they don't get paid by us that they have to aggressively pitch all manner of financial products and services.

How much do you think the bank is really making by lending out your deposit?

If you don't pay for the service, you are not the customer. The one who is paying is the customer. And since no one can serve two masters, the banks serve the one and despise the other, the other being you.

I belong to a credit union myself.
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anon_investor
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Re: Savings Account

Post by anon_investor »

Ivygirl wrote: Fri Jun 18, 2021 7:38 am
FOGU wrote: Mon Jun 14, 2021 6:38 pm
Ivygirl wrote: Sat Jun 12, 2021 6:59 pm I think we might get better service from banks if we actually paid them anything to keep our accounts there. Just sayin'.
The banks get paid by being able to lend out customer deposits, n'est pas?
Not to mention having a nearly captive audience to pitch all manner of financial products and services.
It's because they don't get paid by us that they have to aggressively pitch all manner of financial products and services.

How much do you think the bank is really making by lending out your deposit?

If you don't pay for the service, you are not the customer. The one who is paying is the customer. And since no one can serve two masters, the banks serve the one and despise the other, the other being you.

I belong to a credit union myself.
This is why the larger your account the more freebies and better service you get. If you have a $500 account with Chase they will treat you a lot differently than if you have $500,000 (you are more valuable to them).
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winterfan
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Re: Savings Account

Post by winterfan »

We have a savings account attached to our checking account. I keep it so I can transfer money instantly if we need it. I have an online account too, but the interest rate is so low on it, I'll probably just close it to simplify things.
Ivygirl
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Re: Savings Account

Post by Ivygirl »

anon_investor wrote: Fri Jun 18, 2021 7:47 am
Ivygirl wrote: Fri Jun 18, 2021 7:38 am
FOGU wrote: Mon Jun 14, 2021 6:38 pm
Ivygirl wrote: Sat Jun 12, 2021 6:59 pm I think we might get better service from banks if we actually paid them anything to keep our accounts there. Just sayin'.
The banks get paid by being able to lend out customer deposits, n'est pas?
Not to mention having a nearly captive audience to pitch all manner of financial products and services.
It's because they don't get paid by us that they have to aggressively pitch all manner of financial products and services.

How much do you think the bank is really making by lending out your deposit?

If you don't pay for the service, you are not the customer. The one who is paying is the customer. And since no one can serve two masters, the banks serve the one and despise the other, the other being you.

I belong to a credit union myself.
This is why the larger your account the more freebies and better service you get. If you have a $500 account with Chase they will treat you a lot differently than if you have $500,000 (you are more valuable to them).
If you have $500,000 on deposit at Chase for very long you may not be making the optimal investing choice though. Bogleheads will scold you.

I am a pretty typical middle-class person. I have $12,000 in a savings account which is my emergency fund. And I have about $3,500 a month passing through checking from my paycheck, which does not stay with the bank but leaves for other places within a few days - the electric company, a different bank that holds my mortgage, the grocery store, Vanguard for my Roth IRA. I have no debt except mortgage. No banker is making an appreciable amount of money off of me. If a banker wants to increase his or her hoard they will need to look for someone who borrows, who holds their proprietary credit card, or who will bite on the offer of a financial product. My "value" to them is not worth the space I occupy on their financial network, they have got to try and sell me something.

I don't kid myself that I am their "customer" and have paid for any service beyond the very basic.

This is why I say long live credit unions. We share the risk and reward among ourselves and they do not obnoxiously market to me. In return I don't make demands for gold star treatment that I never paid for.

*Edited for two words out of order.
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anon_investor
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Re: Savings Account

Post by anon_investor »

Ivygirl wrote: Fri Jun 18, 2021 10:04 am
anon_investor wrote: Fri Jun 18, 2021 7:47 am
Ivygirl wrote: Fri Jun 18, 2021 7:38 am
FOGU wrote: Mon Jun 14, 2021 6:38 pm
Ivygirl wrote: Sat Jun 12, 2021 6:59 pm I think we might get better service from banks if we actually paid them anything to keep our accounts there. Just sayin'.
The banks get paid by being able to lend out customer deposits, n'est pas?
Not to mention having a nearly captive audience to pitch all manner of financial products and services.
It's because they don't get paid by us that they have to aggressively pitch all manner of financial products and services.

How much do you think the bank is really making by lending out your deposit?

If you don't pay for the service, you are not the customer. The one who is paying is the customer. And since no one can serve two masters, the banks serve the one and despise the other, the other being you.

I belong to a credit union myself.
This is why the larger your account the more freebies and better service you get. If you have a $500 account with Chase they will treat you a lot differently than if you have $500,000 (you are more valuable to them).
If you have $500,000 on deposit at Chase for very long you may not be making the optimal investing choice though. Bogleheads will scold you.

I am a pretty typical middle-class person. I have $12,000 in a savings account which is my emergency fund. And I have about $3,500 a month passing through checking from my paycheck, which does not stay with the bank but leaves for other places within a few days - the electric company, a different bank that holds my mortgage, the grocery store, Vanguard for my Roth IRA. I have no debt except mortgage. No banker is making an appreciable amount of money off of me. If a banker wants to increase his or her hoard they will need to look for someone who borrows, who holds their proprietary credit card, or who will bite on the offer of a financial product. My "value" to them is not worth the space I occupy on their financial network, they have got to try and sell me something.

I don't kid myself that I am their "customer" and have paid for any service beyond the very basic.

This is why I say long live credit unions. We share the risk and reward among ourselves and they do not obnoxiously market to me. In return I don't make demands for gold star treatment that I never paid for.

*Edited for two words out of order.
I was giving an example. I don't have a Chase Bank account or $500k in a bank account.

We keep our emergency fund in I Bonds, but use Ally Bank (an online only bank) as our hub. We also have a low minimum balance checking account with a bank that has lots of branches in my area (sometimes you need certain in-person b&m bank services not offered by an online only bank). Extra funds each pay check go to our Vanguard taxable brokerage account (VTSAX and chill).
Marseille07
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Re: Savings Account

Post by Marseille07 »

anon_investor wrote: Fri Jun 18, 2021 7:47 am This is why the larger your account the more freebies and better service you get. If you have a $500 account with Chase they will treat you a lot differently than if you have $500,000 (you are more valuable to them).
My experience with a Chase private banker hasn't been positive. They just try to sell you consultations, financial planning etc etc that you can DIY better.
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anon_investor
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Re: Savings Account

Post by anon_investor »

Marseille07 wrote: Fri Jun 18, 2021 10:22 am
anon_investor wrote: Fri Jun 18, 2021 7:47 am This is why the larger your account the more freebies and better service you get. If you have a $500 account with Chase they will treat you a lot differently than if you have $500,000 (you are more valuable to them).
My experience with a Chase private banker hasn't been positive. They just try to sell you consultations, financial planning etc etc that you can DIY better.
Sounds like every other big bank...
Ivygirl
Posts: 456
Joined: Sun Apr 06, 2014 1:36 pm

Re: Savings Account

Post by Ivygirl »

anon_investor wrote: Fri Jun 18, 2021 10:30 am
Marseille07 wrote: Fri Jun 18, 2021 10:22 am
anon_investor wrote: Fri Jun 18, 2021 7:47 am This is why the larger your account the more freebies and better service you get. If you have a $500 account with Chase they will treat you a lot differently than if you have $500,000 (you are more valuable to them).
My experience with a Chase private banker hasn't been positive. They just try to sell you consultations, financial planning etc etc that you can DIY better.
Sounds like every other big bank...
Again, what could you expect, the bank must make money and a normal banking relationship does not pay them. You are likely not their customer. The one who is paying is the customer - whoever that may be.

The contest to see who can go through life paying nobody anything results in this: entities go elsewhere for the funding they must have, generally to unsavory places. Better to pay for what one uses and have a real relationship. Or belong to a credit union, which does not have excessive profit as a motive.

The same dynamic is operating in media and journalism. Nobody using the service is willing to pay - pay anything at all. Zero. Zilch. Nada. Gotta find a way to get around that paywall and read for free. Any wonder they start raking muck to stay alive?
Cousin Eddie
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Re: Savings Account

Post by Cousin Eddie »

nebraskaguy85 wrote: Sat Jun 12, 2021 12:13 pm I am looking for thoughts/opinions on savings accounts. Currently I have a checking account at a local brick and mortar bank, and an online savings account with Ally which I am using to build my emergency fund. Does it make sense to have a brick and mortar savings account as well? If yes, would you have the brick and mortar savings at the same bank as your checking account or at a completely different brick and mortar bank where it is out of sight out of mind? Do bogleheads usually have a brick and mortar savings in conjunction with their online savings account?
I've never had need for a separate savings account, especially since there is not much difference in the rate of return with a checking account. A few months ago I went to a high yield savings/checking account at my local CU with 3% interest on up to $25k funds. It's one of those accounts where you have to make one ACH transfer and 12 debit card transactions per month. So far so good, though I wouldn't recommend it to everyone since you have to keep track of your transactions more closely than most people do. It has been easier than I thought it would be as I use it 3-4 times in a row everytime I go to the grocery store.

The rest of my portfolio is in stocks/bonds.
GoFish
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Re: Savings Account

Post by GoFish »

I have had accounts at B&M banks my entire life, and will continue to do so until/unless online savings accounts begin to offer a much more attractive interest premium compared to my local bank. I usually have $50K, give or take, cash in the bank at any given time, used to pay current expenses.

The difference in interest paid by online savings vs B&M at this time isn't even rounding error in our overall finances.

So for the foreseeable future I will keep cash for current expenses in a local bank where I can speak with someone on the phone or in person at my convenience. The (really) small loss of earned savings interest is the price I’m willing to pay for this convenience.
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