(11/5/05: This is old news, I now have plenty of referrals. Please follow the new directions for the Emigrant Direct Sign-Up Bonus.)

Ok, I’m all caught up on e-mails now. Every who wrote me their 1st & 2nd email on or before Friday 10/7 should have a reply.

Lots of referrals left, so no worries.

As of this writing, 80 referrals have been given out, so 20 are left. I will try, but I cannot guarantee that I will be able to update again promptly when they run out, so this is my official warning: You may not get in on this offer if you are not within the next 20 people to go through my link and apply and e-mail me. But you really have nothing to lose by trying either. FYI, I’ve been getting from 2-8 referrals a day.
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Bank of America has just announced a new program called Keep The Change. If you enroll, every time you buy something with a Bank of America debit card, they?ll round up your purchase to the nearest dollar amount ? and transfer the difference from your checking to your savings account. So if you buy something worth $4.57, you’ll get charged $5 to your checking account, but get the 43 cents straight into your savings account. So far, ho-hum. But, for the first 3 months, they’ll match your “change” 100% (so you’d get 86 cents in your savings), and 5% after that (45.15 cents).

Obviously, you need both checking and savings accounts at Bank of America. I do. You also need to physically walk in a branch to enroll, which I haven’t had the chance to yet. I think I will sign up and participate, but probably only for the initial 3 months and for smaller amd non-gas/grocery store/drugstore purchases.
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(Update: This is old news, I now have plenty of referrals. Please follow the new directions for the Emigrant Direct Opening Bonus Promotion.)

First, I’d like to say thanks everyone for reading and making my $10 Emigrant Direct Opening Bonus Referral program successful so far. Ok, now here are some things I need participants to read:

1. Not everyone is following the rules exactly. I need two e-mails from everyone – one when you open the account online, and another when you get the paper letter and get full online access to your account. This is to ensure an accurate count, and to make sure we don’t go over 100 without knowing and leave people out in the cold. If this happens, the people who did not follow the rules will be the ones left out instead! Otherwise, the Honor System approach seems to be doing well.
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VirtualBank is the forgotten middle-child of the online banking world. It doesn’t have the great 4.0% APY rate of Emigrant, and it doesn’t have the advertising budget of Capital One 360. It offers a relatively competitive 0.75% APY now, with no fees and minimum balances for it’s eMoney Market savings account, but is mostly ignored since it no longer stands out in the crowd. It’s only slightly unique capabilities are shorter hold times on transfers, and the ability to link 4 accounts. I still use my account to shuffle money around quickly amongst my many accounts, though. For more information, please see my VirtualBank Information and Review Page.

I knew Presidential Bank would step it up. I have the majority of my cash at there, and kept it there even in the wake of Emigrant Direct’s recent 4.0% APY interest rate. Presidential Bank’s Internet Checking Plus Account [review] now pays 4.0% APY interest. And its Premier Savings Account [review] now pays 4.12% APY. Of course, both these accounts have additional restrictions that Emigrant Direct does not have like minimum balances, but it also offers more features like check-writing and online bill paying. It works great for me, but is definitely not the best fit for everyone. Check out my Online Bank Comparison page for some side-by-side stats.

Capital One 360 is now showing 0.75% APY on their site. Hmm… a rather weak reply to Emigrant Direct’s jump to 4.0% APY if you ask me. Still, the beauty of these accounts is that you can transfer money between them as you’d like. Although I’m sure ING is relying on ‘financial inertia’ to keep some people from moving their money out, even though you can even link Emigrant Direct and Capital One 360 together now.

For more information, please see my Capital One 360 Info Page and my Online Bank Comparison which compares many of the popular online savings accounts.

After linking Capital One 360 and Emigrant Direct directly, I just checked and my $5 test transfer from ING -> Emigrant over the weekend just posted to Emigrant today, so it is officially possible to move your money from 3.30% to 4.00% with just a few clicks!

Sweet. Emigrant Direct’s American Dream Savings Account is now paying 4% APY [Info Page, Bank Review], up from 3.50% and leapfrogging basically everyone in the liquid online savings arena, including Presidential Bank’s Premier Savings Account. And I just moved over ten thousand dollars out of Emigrant in the last two months. But I don’t think the interest rate wars are over yet. Things continue to look up for savers! An arbitraged $20,000 balance transfer at 0% APR would now earn $800 a year!

Yes, I used ‘Direct’ three times in the title. Many people have wanted to link their new Emigrant Direct account with their existing Capital One 360 accounts. However up until recently, unless you used your Capital One 360 account as your initial funding account, you couldn’t do this, as both required checks to link additional accounts. But thanks to a new check-less linking feature, it has been done! I got this idea from Consumerism Commentary.

First, log in at ingdirect.com, and click on the link about Externally Link Accounts. Then click on the Add Link button. You’ll need to know the name of your bank, the routing number, and the account number. For Emigrant, the name is Emigrant Savings Bank, and the routing number for Emigrant is 226070319. They’ll then send two small deposits to your Emigrant Direct account (free 43 cents for me!) which show up in a couple days and you confirm them again back at ING. I just confirmed my deposits and they’re all linked up. I’ll also send a couple bucks back and forth to amuse/assure myself, but I think it’s a go.

HSBC Bank has had their no minimum, no fees Online Savings Account around for a while now, but this is the first time they have offered a better rate than Capital One 360, VirtualBank, or Emigrant Direct. I don’t have an account there, but it does have some nice features:

• Currently at 3.75% APY
• Open with $1, No minimums or monthly fees
• Online access and unlimited linked external accounts
• ATM card and withdrawal access through any ATM, deposits at HSBC ATMs only
• FDIC Insured, and HSBC is a major international bank.

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Short answer: No, not really, unless you are talking amounts over six figures.

I’ve seen so many people get hung up on this, I think it deserves a post. The easiest way to explain it is with an example. Let’s say ‘DaBank’ compounds interest daily on their accounts, and ‘MoBank’ compounds interest monthly. Let’s say you have a $10,000, 1-Year CD with both of them at the same 5% APR interest rate, and compare how much interest you have at the end of the year. Both credit interest monthly.

• Compare the rates of the Best Online Savings Accounts

MoBank:
Since MoBank compounds monthly, you are getting 5%/12 = .4166% every month. So, at the end of the first month, you will have 10,000 x 1.004166 = $10041.67. During the second month, you will be earning .4166% on $10041.67, not just $10,000. So at the end of the 2nd month you’ll have $10083.51, not $10083.34. This goes on for twelve months:

• $10,000 x (1 + .05/12)¹² = $10511.62.

DaBank:
Since DaBank compounds daily, you are getting 5%/365 = .0137% every day. So, at the end of the first day, you will have 10,000 x 1.000137 = $10001.37. Using the same basic formula as above for 365 days:

• $10,000 x (1 + .05/365)³⁶⁵ = $10,512.67.

So over the course of a year you’ve only earned $1.05 more by compounding daily versus compounding monthly!

The easy way to not even worry about this is to just compare APY instead of APR.

If you compare APYs, or annual percentage yield, the compounding effect is already taken into account, whether it be daily, monthly, or every 6.374 seconds.  In our example above, MoBank would advertise a 5.12% APY and DaBank could advertise a 5.13% APY, with the same 5% APR. I hope that clears things up for some!

Now, I know someone commented “How the heck do you keep track of all these bank accounts?” before, and I’m sorry I didn’t reply right away. Someone else asked again, so I got off my butt and whipped up a diagram to explain it. It’s not that bad, and it’s worth it get the best interest rate for my cash. First, I use Yodlee to track bank balances. This way I just log in to one site, and at a glance I can see balances and recent transactions. If I need more detail, then I can log into the respective bank websites. Yodlee also recently added access to Emigrant Direct, so that was nice.

Now to explain how I transfer money to and from these accounts, here is a picture. Please excuse my mad Microsoft Paint skillz.
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