In life and money, I am conservative. I read about those playing the 0% Credit Card Balance Transfer Game and think, "God bless 'em, but there's no way I could do that." I also like to keep things simple and organized. I read about those with 10, 14, even 16 different bank accounts (used primarily for interest rate chasing) and think, "God bless 'em, but there's no way I could do that." Of course, as conservative, simple and organized as I may be, my frugality prevents me from passing on free money and a good deal.
How do I balance the conservative, organized part of my personality with the part that wants to get the most out of my finances? Oftentimes, these two halves mix well (budgeting, finding bargains, etc.). Occasionally, like when I read about the aforementioned 0% Balance Transfer Game, they do not mix at all.
Make a List, Check it Twice
After tithing, living below my means, and paying off my debt as fast as I can, what else can I be doing to maximize my money? The numerous online savings accounts readily available are right up my alley, but I do not want to open 15 of them and constantly be moving my money around. To suit my split personalities, I came up with a checklist. For me to open up an online savings account, it must meet each of the following criteria:
- Free money. If an online savings account is offering bonus money just for signing up, and the initial deposit is minimal, it has my attention. In most cases, the money I earn as a sign-up bonus will be more than I earn on the account in interest after one year.
- No minimum deposit. I do not want to have to worry with keeping a certain balance in this account, a certain balance in this other account, and so on. If I am required to keep a certain balance in an account, I pass on it.
- No fees. Minimum balance fees, maintenance fees and the like will send me running for the hills.
- No hard credit pull. If you do not know what these are, just know that they hurt your credit score. True, one of these won't kill your credit score, but as a personal rule I avoid any accounts that I know will do a hard credit pull.
- A good interest rate. If it can't beat the inflation rate, it's not worth the effort unless the sign-up bonus is huge. I'm talking Rosie O'Donnell's mouth huge here.
Why the limitations? Mainly, it will make it much easier for the organizational side of me to keep track of things. It automatically limits the number of accounts I will have, and the accounts I do have will be worry free. And even if an account I open turns out to fall behind on the interest rate war and I never add any additional money to it, I will have at least gotten a sign-up bonus from it.
To date, three accounts have made my list:
- E-Trade's Complete Savings Account. A $25 sign-up bonus, a minimum opening deposit of $1, no minimum balance requirements, no fees, and a 5.05% interest rate. No known hard credit pull.
- Citibank's Ultimate Savings Account. A $50 sign-up bonus, no minimum balance, no fees, no known hard credit pull, and a 4.65% interest rate. (Note: Since opening the account, I discovered Citibank does indeed do a hard credit pull)
- ING Direct's Orange Savings Account. A $25 sign-up bonus if referred by a current account holder and you open your account with at least $250, no minimum balance requirement, no fees, no hard credit pull, and a 4.5% interest rate. ING also offers a high-interest checking account (with online bill pay capability, Debit/Check Card access and 4% interest), which was its main draw for me.
As time goes on, I'm certain additional online savings accounts will meet my criteria. Emigrant Direct, iGoBanking, HSBC Direct and more are certain to offer bonuses sometime in the future to lure in new customers (they already meet my other criteria, plus their interest rates are noticeably higher). Once that happens, I'll jump on board.
Well, that's how I balance things. It's not too wild for the conservative side of me, and it's just wild enough for the side that loves working with money. It's a compromise, you see. A very boring, mildly insane compromise.