Bank hopping

[Nutria]

Hi,

Following up on the recently resurrected thread http://www.savingadvice.com/forums/i...est-rates.html, I wonder: how many people here hop from bank to bank, trying to squeeze that last 0.05%?

I ask because on $10,000 the annual difference between 0.75% and 1.0% is a whopping $25.16.

10000 * (1+(0.01/12))^12 = 10100.41
10000 * (1+(0.0075/12))^12 = 10075.25

Thanks

[disneysteve]

We keep very little in bank savings accounts so we don't bother. It isn't worth the hassle of frequently changing accounts to get a few extra dollars. The point of those funds is for emergencies, not to earn a lot.

[Nutria]

It isn't worth the hassle of frequently changing accounts to get a few extra dollars. The point of those funds is for emergencies, not to earn a lot.

That was exactly my thinking.

[MonkeyMama]

I would change banks to save $25. I don't like wasting money.

That said, when choosing banks, I try to find one that has more long-term interest rates and try to stay away from the short-term promotional rates. Just as an example, I have had an Ally account for many years. (Would have to look up exactly when we opened that account, but it's got to be at least 5 years and maybe getting closer to 10 years than 5). They've consistently had a higher interest rate than most financial institutions. I jumped over to another CU for a few years when they had a better interest rate and a long term track record, but closed that account once they lowered their rates below the competition. I always kept Ally opened because of their track record, and just moved everything back over. Right now I have a lot in CDs at my CU. Because they every once in a while have a really good CD rate. But then I am just moving money between two accounts that I have had long term. Which is really just the click of a button in this day and age. Definitely no big deal.

Of course, my kids were able to get 7% at a local CU which is a no brainer.

I am considering a 5% interest deal myself. I will move my money short term to make 5 times as much interest, for sure. Deals like this are pretty rare, so it's not anything I spend much time or effort on. When I can get 5x interest I will jump through a few hoops.

[Fishindude77]

I've always been of the mindset that having a good banking relationship is pretty important as you go through life. I think it is beneficial to deal with a local bank where you can walk in and talk to a real human, and over time develop relationships with tellers, lending officers, etc. that will help you with your needs.

Unless my local bank was ridiculously un-competitive on rates, I feel like you are best to try and do most of your business with with the people you know and can talk to, rather than shopping around online and jumping ship every time you can pick up another nickle.

[Nutria]

Of course, my kids were able to get 7% at a local CU

Seven percent interest??? At a Credit Union???

I am considering a 5% interest deal myself. I will move my money short term to make 5 times as much interest, for sure.

That's so high... my fraud alarm bells are blaring.

You've got to post a link to it. If it's legit, and there are 83 absurd qualifications, everyone on this board would jump at it.

[Nutria]

Unless my local bank was ridiculously un-competitive on rates

Like Chase with their 0.01% interest rates. They still have my "working" checking acct (opened at a small S&L 39 years ago, and been bought out 4 times until landed at Chase) and small "intermediary" checking and savings accounts, but big chunks roll into CapOne 360 at EOM...

[ua_guy]

For checking/savings rates, no. The local credit union is fine and the hassle of switching isn't worth it.

That said, our mortgage, vehicle loan, credit cards, are all through different banks because we go for the most competitive rates and terms. Our retirement is through yet another financial institution.

Let me put it this way: I've never had a "local bank" small enough that would help me out on a handshake. For as long as I've known banking, nothing is negotiable, you either qualify for a loan, or don't. If you accidentally incur a fee, they will usually adjust it off the account as a courtesy---but so do the big banks I work with. The local bank still makes me pay to get a cashier's check, even if it's with a smile.

Maybe it makes a difference if you're a small business working with a local/small bank? But for everyday people, banks haven't had an interest in average-joe consumer deposit accounts for going on 20 years now.

[Drake3287]

I've had the same problem but it generally has to be worth it. I had one $100,000. CD rolling over into a new .75% rate and the bank literally across the street was offering a rate of 1.00%. I begged the guy at my bank not to make me go through the hassle to save $250.00 but they wouldn't budge. I couldn't see passing up $250.00 for 30 minutes of paper work.

I recently had $50,000. sitting in a Wells Fargo account making .50% and found that the online Capital One Savings was offering a 1.00% rate plus a $500. bonus. The guy at Wells Fargo agreed I was crazy not to switch.

On a Wall Street day like today, I'm glad I still have cash sitting in a bank!

[MonkeyMama]

Maybe it makes a difference if you're a small business working with a local/small bank? But for everyday people, banks haven't had an interest in average-joe consumer deposit accounts for going on 20 years now.

I mostly agree with this.

I personally have always had a local CU to do all my banking with. Every once in a blue moon we need a cashier's check, and stuff like that. We can walk to our CU branch at current, but I go over there so infrequently it's pretty unnecessary to be quite this close.

That said, the CU terms are so good that we are pretty loyal. I just wanted to clarify that we have one checking account/conduit that we pretty much will keep open forever (or however long it makes sense). But all I need in my checking account is enough to pay this month's bills and the rest goes to higher yield savings or investments. The savings is what we shop around more frequently. Doesn't mean you can't also develop a banking relationship if that is important to you.

I also just recalled that I am pretty sure that we had a 6% CD last year. We had that account so briefly (12 months) I'd already forgotten about it. The catch on a lot of these is you can only put in so much money.

[Ima saver]

I keep a lot of cash sitting in banks because we build spec houses and we do it with cash. I use to try and keep my money locally, but I can't get a rate much over 1/10 of 1 per cent lately.
I go to online banks that offer me at least 1% like my savings direct, GE bank and Barclay.
What is this about Capital One 360 offering 1%? I have an account there (checking and savings) and they are only paying 3/4th of 1 percent.

[Nutria]

I also just recalled that I am pretty sure that we had a 6% CD last year. We had that account so briefly (12 months) I'd already forgotten about it.

That's so incredibly high, and FDIC insured, that every professional money manager this side of Minsk would be buying such CDs.

What bank or CU?

The catch on a lot of these is you can only put in so much money.

Like $500?

[MonkeyMama]

Seven percent interest??? At a Credit Union???

That's so high... my fraud alarm bells are blaring.

You've got to post a link to it. If it's legit, and there are 83 absurd qualifications, everyone on this board would jump at it.

7% for children's accounts, yes. Topped out at $500. What's stupid is there were many years I did not know about this account. This has been a long-term offering (10+ years?) at one of our local CUs. I am guessing the less people that know about it the more likely it stays around. The best is I did not even have to join this CU to sign up my kids. They are members on their own. I am a non-member custodian of their accounts.

It's just a local CU (so you'd have to live or work in this city) but I think I heard about it on this forum, strangely enough.

I just recalled in my last comment that we had a 6% CD last year. These deals are around. That was definitely a "short term rate to get in customers". But since it was a 12-month CD, I went for it. On savings accounts, they can bait and switch more easily. Which is why I tend to look up how long some of these higher interest rates have been around and why I now know how long that 7% has been around.

[Leo]

I just changed bank for my emergency fund from Ally (1%) to Chase because I got $200 opening it. I can switch back after 6 months. $200 is better than the interest rate I'll get in 6 months with Ally.

[Petunia 100]

Somewhat recently, Frugal Texan has blogged about this deal:

https://www.brinksprepaidmastercard.com/index.shtml

You open a prepaid MasterCard, and they allow you to open a savings account which earns 5% on the first 5k. You can have up to 3 savings accounts, so that's 15k at 5%. There are a few hoops to jump through to keep the prepaid card free of fees. The bank is FDIC insured.

At least, this is how I understand the terms.