Opened An EverBank Account

Some of you already know that I have an insane accounting system. Since I also rate chase, I also collect savings accounts like a crazy cat lady collects cats. I've added a new cat... errrr.... savings to my collection - EverBank.

At the time I opened my account on 12/31/09 the 3-month bonus rate offered was 2.51%. Looks like the bonus rate went down in the mean time. *Sigh*



Anyhow, the purpose of the EverBank account is to hold a windfall that I came into on 12/31/09. I can't discuss the source or reason how I came into the windfall due to confidentiality clauses and other legal reasons. All I can say is that it's not from an inheritance, illegal activity, lawsuit settlement, lottery, gambling or from a side job of stripping.

My net windfall totaled $33,475. For now, I intend to keep everything liquid and set aside in my EverBank account. I'm pretty sure that with this windfall, I'll be subject to the AMT, so I'll probably pay a big chunk of tax from it. I'm also embarrassed to admit that I spent over a couple grand of it already in December that I'll have to pay in January.

I'd eventually like to use the majority of the windfall as a down payment for my first home. But with all best laid plans, things can go awry. I could get laid off and I may have to use the money as an EF. I could suffer some uninsured loss. I've decided to call this chunk of money my "X-Fund" since I don't know what the ultimate purpose of this money should be. Heck, I may just use it to pay a big chunk of my private student loans off. I just don't know yet.

On a side note, I'm currently enrolled in a free free credit monitoring program through Southern California's AAA. It immediately alerted me to the fact that EverBank checked my credit report. I'm glad to know the free credit monitoring program is really working!

Random Thoughts About My 3rd Paycheck and Bank Failures and One Confession

July is a 3-paycheck month and I got my first-of-three paycheck yesterday. I immediately transferred my money to my savings. I wish I could say that I "bank" my 3rd paycheck but alas, I can't. I instead disburse 1/6th of it to myself every month until the next 3-paycheck month comes along. Eventually, I hope to eliminate my debts to the point that I can just bank my 3rd paycheck as savings. Someday....

~~~

So my spendaganza goes on. I just bought myself my first EVER digital camera. Yes, it's time I joined the 21st century.

I bought a Panasonic Lumix DMC-ZS1, 10.1 MP camera with 12x optical zoom at Costco, using a $50 off coupon and a $100 gift card. The camera normally retails for $299-$330. With the discount and gift card, I paid about $155, including tax. The price includes a carrying case a 2 MB memory card. Not too shabby, wouldn't you say?



Costco offered a $50 off coupon last December. I really, really wanted it at the time, but decided not to. Ever since, I rued my decision of not taking advantage of the $50 off coupon. When I recently saw that Costco was offering the same coupon again, I decided to jump on this opportunity. I'm hoping that the 12x optical zoom will come in handy when I go see the Pageant of the Masters next weekend!

~~~

Holy guacamole. Have you seen the FDIC list of bank failures in 2009? Most of these banks had less than $1 billion in assets but it's still very unnerving.

As my faithful readers know, I'm arbitraging my 0% credit card debt by paying the minimum and putting my money in a 2.0% savings account at DollarSavingsDirect.

Bankrate gave Emigrant Bank (the parent company of DollarSavingsDirect) a 1-star rating as of 12/31/08.

Although I don't think Emigrant Bank will go under before October (when my 0% promotional rate expires), I also don't want to take any chances. I'll be transferring my money to SmartyPig (the online partner of West Bank). Bankrate gave West Bank 3-stars. Better yet, SmartyPig's current APY is 2.75%.

Checkbook Reconciliation

I was recently surprised to learn a couple of my friends don't maintain a checkbook register. Both friends said they just monitor their spending by checking their balances online on the banks' websites. Then again, one of them recently fretted that his rent check would bounce since his bank failed to immediately post another prior transaction that would put him over his balance. I asked whether this would convince him to keep a register and he said, "Heck no. I'm just going to change to a bank that will post my transactions real-time."

I think my friend's system is reckless since I always believe that there will be a lag-time between when deposits/payments post onto our accounts. Additionally, with online bill pay, if people set some payments to future dates, their current realtime balance would never coincide with their true balance.

Case in point, my checking account balance is currently reported as $3,849.46, but there are $3,778.68 payments currently outstanding. That would mean my real balance is $70.78. My check register says my balance is $18.00, but the discrepancy comes from the fact that when I calculate my balance, I always round-up my payments and I round-down my deposits. I play this silly game to ensure I will never be overdrawn. (Silly, I know.) But when I'm short some months, my "cushion" has often come to my rescue. :-P

Anyhow, my checkbook reconciliation is such a pain in my patootie. Instructions on how-to reconcile your checkbook aren't all that simple either.

Do you keep a check register? If not, how do you maintain the balance of your checkbook to prevent overdraft?

My Insane Accounting

I previously wrote about my 7 saving accounts and 3 checking accounts. I'm embarrassed to even write about my personal accounting system since it's inefficient, cumbersome and insane. But it's been working for me and until there's a drastic change in my life (i.e., I get laid off), I don't really have any impetus to change the way I do things.

Some of you commented how easily I can close down my inactive accounts. But that would mean I would need to re-jigger my current system and re-draw my crazy spreadsheet. I really don't want to have to go through that unless I really have to.

I also discovered that I'm irrational about money. I have this strange need to compartmentalize my money into different "buckets" for different purposes. For example, let's suppose I have $1,000 in my savings specifically earmarked for irregular expenses. And let's suppose I incur $100 in vet bills and $500 in car repairs this month. Most sane people would just pay $600 out of the $1,000 savings account and make plans to replenish the account.

Not me. Paying $600 out of $1,000 would drive me nuts. I would feel more comfortable if my $1,000 earmarked was categorized into a "pet fund", "car fund", etc. etc. I realize it's coming out of the same bucket of money, but categorizing and compartmentalizing has a calming effect on me. Go figure.




Anyhoo, here's my mental illness spelled out:

1. My Semi-Inactive Accounts (4 Accounts = Savings #1, 2, 3 and Checking #2)
My bricks-and-mortar savings at Wells Fargo (savings #1) and my credit union (savings #2) have approximately only $100 in each account. My BofA (savings #3) account has approximately $77 in it. Since they accrue piddly interest rates, I have no intention of increasing the amount in any of them. They are mostly kept open for convenience (i.e., in case I'm in a situation where I need to access some quick cash at an ATM).

I'm not exactly sure how much I have in my Credit Union checking #2 account. I only opened this account because it's the only true free checking account that doesn't require a monthly direct deposit from payroll in order to avoid monthly fees. If and when I get laid off from my current employer and if I have a significant lag time before I start my next job, I will probably designate checking #2 as my primary checking account.

2. Active Checking Accounts (2 Accounts = Checking #1 and 2)
I get direct deposit of $100 each pay period into my Wells Fargo checking #1 and the remainder of my paycheck goes into Bank of America checking #2.

As I previously wrote, checking #2 pays the bills. Checking #1 is supposed to be my "fun money", but I've regularly shifted 20% into my EF, 25% into my "mom and dad fund" and 20% into my car maintenance fund. But since checking #1 isn't linked to any of my online saving accounts, I have to write a check to myself to deposit into checking #2.

So let's summarize the inefficiency of this system: Payroll $100 -> checking #1 -> $65 into checking #2 -> $65 to savings #4. Insane, I know.


3. SmartyPig Account (1 Account: Savings #7)
Every month, my BofA checking #2 automatically transfers $25 into my BofA savings #3 to avoid monthly fees. (This means every month, I need to make sure that I set aside $25 to cover the transfer.) I've recently set up an automatic transfer of $25 from my BofA savings #3 into my SmartyPig savings #7, which is currently getting 3.05% APY. My SmartyPig Account is designated as a pure EF account.

So let me summarize the inefficiency of this current system: Payroll -> Checking #2 (set aside $25) -> $25 to Savings #3 -> $25 to Savings #7. Pretty silly, eh?

4. ING (1 Account: Savings #4)
My ING savings #4 account holds the majority of my "irregular expense" money that I don't need to tap right away. It takes approximately 2 to 3 business days to get money transferred in and out of this account so it's not the most convenient place to stash my emergency funds.

Currently, my ING savings #4 account is separated into the following categories:

a. I-Bond Fund

b. Mom and Dad Fund: To those of you new to my blog, my parents are not in the greatest financial shape. Knock on wood, they have not asked my sister or me to help them out financially in any significant way... yet. In the interim, I give each of them $100 in cash for mother/father's day, birthday and Christmas. This fund covers that expense.

c. Car Repair/Maintenance Fund

d. Pet Care Fund

e. Christmas Fund

f. Computer Fund

g. CD Ladder Fund

h. EF #1

Any money I have left over from my first paycheck of the month gets allocated into the above funds.

5. Dollar Savings Direct (1 Account: Savings #6)
Savings #6 holds some EF money, an earmark for 2009 taxes and my "arbitrage" fund. (My arbitrage fund holds money I intend to use to pay off my 0% credit card balance in October.) This fund has the highest APY (before I opened SmartyPig), so the majority of my EF is held in this account.

I transfer $931 of "arbitrage" money every month into this account.

6. Citibank Ultimate Savings Account (1 Account: Savings #5)
I allocate whatever money I have left over from paycheck#2 of the month into this account. Savings #5 holds the following funds:

a. Roth Fund: I try to deposit $50/month into my Roth account every month. But some months I'm short. I pay the shortfall out of this account;

b. COLA/Insurance: I've started paying my insurance premiums in one lump sum with a credit card rather than paying $3.50/installment fee to my insurance company. I pay $120/month into this account to cover my annual premiums. I also put extra money into this account to cover any unexpected cost of living increases. I tap this account until I can re-adjust my budget to cover the increased cost of living expense on a regular basis.

c. Vacation Fund

d. Extra Paycheck Fund: I get paid every other week and 2 months of the year, I get 3 paychecks. I wish I'm banking my 3rd paychecks, but I can't. I currently put the 3rd paycheck into this account and distribute it equally over the next 6 months to cover my living expenses. One of these days, I hope my livings expenses will go down enough so that I can just bank my 3rd paychecks.

e. EF

I keep this account open for liquidity purposes. Unlike ING, SmartyPig or DollarSavingsDirect, I can access money from this account immediately at a branch.

My once simple system has grown into a monster. But as they say, if it ain't broke, don't fix it. Oh, and here's another cliche: there's a method to my madness. Too bad only I can comprehend it!

Bank Account Madness

I have a confession. I have 7 savings account and 3 checking accounts. It wasn't always like this. Up until a couple of years ago, I was a one-bank woman. If banks were single men, I'd be a promiscuous 'ho.



In the early '90s, I opened checking #1 and savings #1 at Wells Fargo while I was a Freshman in college. Wells Fargo really didn't give me great products or services, but I liked them enough. In Southern California, Wells Fargo is one of the easiest banks to do business with since they have ATMs and branches everywhere. But at some point, Wells Fargo started charging me $7.00/month for online bill pay. Little did I know I didn't have to put up with this lousy service!

In early 2005, I opened savings #2 at my local credit union. I opened the account under the naive thought that if I had a savings account, I would get better terms on my car loan. (I didn't.)

Then in October 2006, I received a letter from Bank of America offering me $125 if I opened up a new personal checking and savings account. I was told I wouldn't be charged a fee on my checking so long as I had direct deposit every month. I was also exempt from fees on my savings if I transferred $25 every month from my checking to my savings. I thought, "What the heck?" and opened checking #2 and savings #3. At this point, I started using my BofA checking account as my primary checking account to pay bills. My Wells Fargo became my secondary checking account for "fun money".

In January 2007, I received a promotional mailer from ING offering $25 if I opened an Orange Savings Account. As far as I could see, there was no catch and the bank offered a remarkable 4.41% APY. Wells Fargo and BofA was paying a laughable 0.01% APY, so how could I turn this offer down? I signed up for savings #4, got my $25 and I was introduced to the wonderful world of online savings accounts. I was hooked!

In April 2007, I learned about another promotional offer for $100 if I opened a Citibank Ultimate Savings Account online. Again, there didn't seem to be any catch and the APY was competitive with ING. I opened savings #5. (Ahhh. The good ol' days when Citibank was giving out money, not taking money.)

In November 2008, I learned about DollarSavingsDirect, who was offering 4% APY while other banks were paying approximately half. I enjoyed the thrill of rate-chasing, so I opened savings #6. Little did I know that the interest rates would plummet at all of the online banks in less than a year. But online banks still offer a much better rate than the bricks-and-mortar banks. I'm sticking with them.

Around the same time, I opened checking #3 with my local credit union. I was concerned that if I got laid off and didn't have additional direct deposits, I'd be charged monthly fees by Wells Fargo and BofA. The local credit union offered a true free checking account, so if and when I get laid off, I'm certain that I will close down checking #1 and checking #2 and start using checking #3 exclusively.

And finally, most recently, I opened savings #7 through Smarty Pig. This was partly due to my addiction to rate-chasing (currently 3.05% APY) and because I liked the whole Christmas Club-like plan it offered.

You're probably wondering, why don't I just close some of my accounts? I wondered about that too. And here's what I came up with:

1. I'm lazy;


2. I like having options, including ATM and branch accessibility;


3. I'm lazy;


4. In case any of my banks fail, I have the peace of mind that I have money accessible at other banks while I wait for FDIC or NCUA to make me whole;


5. I'm lazy;


6. I may be clinically insane;


7. I have too much time on my hands;


8. Did I mention I'm lazy?

I was planning to write the bizaare and complicated system I use to keep track of my money, but I realized it will take forever. Tomorrow, I'll write about my crazy system and my even crazier spreadsheet.

Opened a SmartyPig Account

This is a follow-up to my post yesterday -- I opened a SmartyPig account. SmartyPig itself is not a bank per se, but it partnered with the FDIC-insured WestBank, to form a "nationwide savings initiative".

Opening the SmartyPig account was straight forward and easy. The identity verification process went without a hitch. I was able to open an account and link my funding source (i.e., my bricks-and-mortar savings account) in less than 20 minutes.

Although I can set-up my SmartyPig account like any other online savings account, I decided to give the "savings goal" feature a whirl. I selected the day of the month I wanted to deposit money and the funding source. I could've added an additional funding source, but I stuck with my bricks-and-mortar savings account.

I was then informed that $25.00 would be immediately withdrawn from my funding source that would not count towards this month's savings goal.



I then set up a savings goal (e.g, $1,000) and the time frame I want to achieve the goal (e.g. June 2012). SmartyPig automatically calculated the monthly contribution amount of $25.

This was an arbitrary goal I input. I can always edit or stop my savings goal and I can also transfer my funds back to my funding source via ACH transfers with no penalty.

I decided not to make my SmartyPig account "public". A SmartyPig public savings goal is one where a customer chooses to let his or her friends and family members see his or her savings goals, and allow them to make contributions if they so choose. Although this is a very creative and clever feature, I would feel awkward asking my friends and family, "Please donate to my vacation fund!" But if anyone figures out a way to ask for money without being perceived as a moocher, please do let me know. I'll make my account public then.

I think the SmartyPig account will work out well for me. I currently have my bricks-and-mortar savings account linked to my checking account. In order to avoid the monthly service charge, I have $25 from my checking acount automatically transferred to my savings account. My bricks-and-mortar savings account is currently yielding only 0.1% in interest, but by transferring $25/month into SmartyPig, I'll now get 3.05% APY.

The only problem I see with this arrangement is that I've now opened my 7th savings account. *egads!* One of these days I will simplify my banking. One of these days...

Thank Goodness I Don't Have to Write Another "Dear John" Letter

Warning: This post has a slight "adult" content at bottom.

I currently have a $9,367 (net) credit card balance with BofA at a promotional 0% APR until 10/28/09. According to the Wall Street Journal, Bank of America is raising the interest rates on credit card customers who carry a balance.

Et tu, Brute? Do I have to write another Dear John letter?

I called the customer service rep over the weekend and learned that the increased credit card rates affect only contract rates, not promotional rates. I was verbally assured that promotional rates will be honored unless I breach the terms first (i.e., I make a late payment). The customer service rep even offered additional 0% balance transfers, should I have the need to do so.

No, thanks. It's always good to remember than when you're stuck in debt, credit card companies won't help you out. They're more like the second cow in the pastoral scene below that's been making the viral email rounds:





Come hell or high-water, I'm paying off my credit card debt before October 28th!

To Opt Out or Not Opt Out?

I promise this will be the last post EVER about my archnemesis, Chase. (My prior posts can be read here, here and here.)


For those of you who are new to this blog, I've summarized my dysfunctional relationship with Chase below. For those who are already familiar, skip down to #7:

1. A long time ago in a galaxy far, far away, Chase offered me a 5.99% APR balance transfer that was supposed to be good until I paid off the balance. *SCORE!!* I transferred over $13,000 to my Chase card and I paid the minimum balance (2% of balance) every month religiously and on time as part of my debt snowball plan.


2. Chase purportedly advised me back in November '08 of the following change in terms of the credit card.



3. Oblivious to the unilateral change in terms, I didn't discover the $10 service charge and the 250% increase in my minimum payment until January 2009. I transferred my balance to Bank of America's 0% offer.


4. Because I knew Chase is a bloodsucking bank, I sent an additional $30 to cover any interest charges accrued.


5. Again, completely oblivious to the other change in terms, I discovered on February 5 that Chase will continue to charge me $10/month, regardless of whether I carried a balance or not. Chase tried to blackmail me to do a balance transfer to 7.99% APR to avoid the $10/month service charge. I told them to go pound sand and closed my account.


6. Chase closed my account and sent me a $20 refund and billed an additional $13.76, rather than issuing me a $6.24 refund. (Greedy and incompetent!)


7. I sent Chase a $15.00 payment and demanded a refund after the February billing month closed. Chase refunded me $21.24 in March as a "Fin Chrg Refund".

Woo hoo! I thought I got my service charge back because I'm so special. But turns out that Chase only agreed to refund $4.4 million of these bogus "service charges" in response to NY AG Cuomo's investigation and several class action lawsuits.

Which begs the question: Should I opt out of the class action lawsuit?

I do believe that Chase breached the spirit of the original balance transfer agreement and engaged in the classic "bait-and-switch" tactic, which could be fraud in the inducement. I therefore believe Chase should be penalized for their actions.

But did I suffer any damages from Chase's actions? No matter how I look at it, the answer is decidedly, "No." As a matter of fact, Chase may have actually improved my situation.

Had Chase honored its original balance transfer offer, I would not have paid off my car loan until July 2009 and my credit card balance until July 2010. (See, my originial snowball plan.) But when Chase started charging me bogus fees, I vowed to speed up my debt repayment plan. Consequently, I paid off my car loan 5 months early and I'm on track to paying off my credit card balance in October 2009 (i.e., 9 months early).

So in summary, Chase's breach cost me:
$358.17 in balance transfer fee to BofA + unquantifiable damages for reduction in credit limit of $18,500.

But Chase's breach saved me:
$48.13 in car loan interest + $639.15 in credit card interest (assuming I'll pay off my credit card in October '09)

All in all, looks like I came out ahead in this whole Chase debacle and hurray for me. But what if I didn't have the ability to transfer out my balance and close my account? I would've been in a world of hurt, or at the very least, I would've ended up with a higher APR, which Chase would have probably increased steadily.

As a matter of principle, I've decided to opt out of the class action since I haven't been damaged by Chase's actions. Let the people who've actually suffered from Chase's fraud/breach of contract collect on any settlement money that Chase will likely pay.

On a related note, I received an offer from Chase to open a checking account this past weekend. If I made 5 ATM purchases with the Chase ATM card, they would give me $100. Bah! Keep your stinkin' money, Chase. I hate you and will no longer do business with you - - yes, even if YOU paid me!

Trying to Maintain Confidence in My Government

I’ve always been pretty cavalier about where I keep my money since I’ve never had more money than the FDIC limits. Consequently, I speculate for the best yields regardless of the financial soundness of the bank. To hedge my bets, though, I keep multiple accounts at several banks in the event one of them fails, I still have a bucket of money I can access while I wait for the FDIC to make me whole.


But on 3/2/09, FDIC Chairwoman Sheila Bair wrote to bank CEOs that the FDIC needs to increase fees to shore up the fund since it could otherwise become insolvent. I think I peed in my pants when I read that.

Thankfully, it appears that the FDIC was granted triple its prior borrowing capacity from the Feds to keep it solvent. FDIC’s permanent credit line is now at $100 billion and the FDIC projects that bank failures will cost the agency about $65 billion through 2013. FDIC agreed to halve the emergency fees it was planning to charge banks in return.

Not the most confidence-inspiring news to say the least. I wondered whether should I give up the hunt for best yields and start putting money in safer banks with minimal yields, or perhaps my credit union?

But I’m finding it’s really difficult for me to move money from a low rated bank account yielding 2.5% (DollarSavingsDirect) to my credit union that only pays 0.5%.

At this point, I’m going to stay put, mainly because I’m greedy and partly because I want to maintain confidence in my government.

I just pray that this economy will stabilize itself to the point that I don't feel like I'm putting my emergency fund at risk. I love to gamble but not with my savings. Sheesh.

Funny Way to Show Appreciation to A Valued Customer

Wow. My financial relationship with Chase Credit Card has now officially started to resemble one of my (many) past dysfunctional romantic relationships.


Here’s a brief recap of my seriously disturbing history with Chase and my Ex (not Mr. Spock. He's one of the good ones.):

1. CHASE: Wooed me with an awesome 5.99% APR until loan paid off deal. EX-BF: Wooed me with poems, dinner and chocolate.
2. CHASE: Unitlaterally implemented monthly service charges. EX-BF: Unilaterally lowered the thermostat to arctic temps, kept toilet seats up and never replaced toilet paper.
3. CHASE: Blackmailed me to make a 7.99% APR balance transfer to remove service charge. EX-BF: Blackmailed me to…. Ummmm… TMI. Never mind.
4. CHASE: Gave’em the boot. EX-BF: Gave him the boot.

After the “Big Break-Up” , my ex had the gall to call me up weeks later to ask me, "Hey, do you want some special lovin'?" (Oh God, I think I swallowed my vomit then.)

In the same vein, I got a call from a telemarketer from Chase the other night. And no joke, the telemarketer asked, “As a valued customer of Chase Credit Cards, I am calling to see what we can do to improve our services to you?”

ARE YOU FREAKIN’ SERIOUS? Oh, man! This was my chance to give Chase a piece o’ my mind!

As I was preparing to lay my wrath upon the poor telemarketer, I remembered - - the guy is a working stiff just making a living. It's not like Jamie Dimon (CEO of Chase) called me.

I sucked it up and told the kid, "I cancelled my card and let me tell you why. Chase started charging me $10/month and boosted my minimum monthly payment to 5%. I know tons of people are ticked off by this. Good luck since I think you'll be dealing with tons of pissed off people."

The kid was surprised but said, "Uh... okay. Uhh... Thanks. Uhhh... have a good evening."

I'm still shaking my head. This is one of our better financial institutions, folks.

Plunging APYs, the Soundness of My Banks and Other Musings About Savings

Wow. It's only been 18 days since my last post about my shrinking savings interest yield and I now have to update again.

• Dollar Savings Direct's APY went from 3.2% to now 2.65%
• Citibank USA's APY went from 2.4% to now 2.3%
• ING's recently decreased from 2.2% to 1.85%

I guess the bright side is that all of my savings accounts are in line with each other in terms of APY yields. As we've learned with Madoff and the Stanford Financial Group, if your investment vehicles are yielding far above everyone else, you better start sniffing around for something fishy. I guess my banks all pass this initial "sniff" test.

But I think it's also worth taking a gander at how financially safe my banks are. Here is my prior post which cites the excellent LA Times article on how to determine your bank's financial health.

Here are the results:

DollarSavingsDirect (Online Branch of Emigrant Bank)

Bankrate.Com's Safe & Sound Rating: 1 Star
Bankrate believes that, as of September 30, 2008, this thrift exhibited a significantly below average condition, characterized by substantially lower than normal overall, sustainable profitability, very questionable asset quality, below standard capitalization, and near normal liquidity.

Bauer Financial's Star Rating: 2 Stars
(Bauer charges $10 for its analysis report. No other commentary provided.)

Citibank Ultimate Savings(Online Branch of Citibank, N.A.)

Bankrate.Com's Safe & Sound Rating: 3 Stars (Definition: "Performing") - Sthinky's Comment: This shocks me to no end!
Bankrate believes that, as of September 30, 2008, this bank exhibited a generally satisfactory condition, characterized by substantially lower than normal overall, sustainable profitability, satisfactory asset quality, mid-range capitalization and seemingly ample liquidity.

Bauer Financial's Star Rating: 3 Stars
No other commentary provided.

ING Direct(Online Branch of ING Bank, FSB)

Bankrate.Com's Safe & Sound Rating: 4 Stars (Definition: Sound)
Bankrate believes that, as of September 30, 2008, this thrift exhibited a sound condition, characterized by approximately normal overall, sustainable profitability, good asset quality, mid-range capitalization, and lower than normal liquidity.

Bauer Financial's Star Rating: 3½ Stars
No other commentary provided.

~~~

I guess it makes sense that the bank that's in the most shaky condition would offer the highest APY, since it wants to attract as many deposits as it can to stay afloat. The good news is that all of my banks are all FDIC members and I'm not in danger of losing any of my savings.

The majority of my savings is currently with DollarSavingsDirect since it was the account with the highest APY. Although it's still higher than the rest, it no longer makes sense for me to keep most of eggs in that one basket. Perhaps I should consider distributing my savings more equally between all 3 accounts.

I'm also considering creating a CD ladder. A CD ladder is the staggering of CDs at different interest rates and maturities. Similar to dollar cost averaging, I can smooth out the volatility of rising/decreasing interest rates over time by staggering.

But I'll need to be cognizant of 3 types of risks with CDs, though:

Default risk: There is very little chance of default on CD's IF the CDs are FDIC insured. So, if my bank is domiciled in Antigua and is giving me a 7% return with no FDIC insurance, I need to be wary! Oh, and I guess I need to make sure I don't exceed the FDIC limit at any one bank. (Ha ha.)

Market risk: If I decide to liquidate my CD prior to maturity, I will be subject to whatever price the market will bear. This can be lower than my original investment depending primarily on interest rate movements since purchase date.

Call Risk: Callable CD's will typically pay a higher interest rate compared to a non-callable CD with the same maturity. This is because the issuer retains the right to call back the CD at specified future dates. But even if I don't have a callable CD, my rates can can be slashed if my bank is taken over by another bank that is not obligated to continue honoring the rate. So... if I'm investing in a CD, I'm better off sticking with a more sound bank that's offering a slightly lower APY than a shaky bank offering a rocking APY. Got it!

Since I need most of my money as liquid as possible, I'll probably start small ($500) and infrequently (once a year). Hopefully, as I pay off my debt and more money frees up, I'll up the amount and frequency of my CD ladder.

Chase, The Zombie Credit Card Company That Won't Die

I am extremely frustrated because I am trying to wash Chase out of my hair completely and yet it won't go away like a stubborn blood sucking nit. (For those who are unfamiliar with my recent spat with Chase, my prior posts can be read here and here.)

Anyhow, here's a brief summary of what transpired:

1. Chase purportedly advised me back in November of the following change in terms of the credit card.



2. I discover the $10 service charge and the 250% increase in my minimum payment in January 2009. I make the decision to transfer my balance to Bank of America's 0% offer.


3. Because I know Chase is a bloodsucking bank, I sent an additional $30 to cover any interest charges accrued until the balance transfer takes place.


4. I discover on February 5 that Chase will continue to charge me $10/month regardless of whether I carry a balance. Chase tries to blackmail me to do a balance transfer to 7.99% APR to avoid the $10/month service charge. I tell them to go pound sand and close my account.


5. Chase closes my account and sends me a $20 refund (which I have not yet received).


6. Chase is now billing me $13.76, when it could have just issued me a $6.24 refund instead of $20.

Frustrated, I ranted at a poor customer service rep at Chase. He assured me that the $13.76 won't accrue any interest since it arose out of finance charges and only the principal balance accrues interest.

How much do you want to bet he's full of cow patty and I'll get a bill for 5 cents interest next month? Chase is becoming a zombie company I can't get rid of!

And to think Chase is one of our better financial institutions? I think I see why we're in the midst of the economic crisis we're in now.

Please, Chase, just go away. I hate you.

My Incredible Shrinking Savings Interest Yields

I've got three online "high" interest savings account with DollarSavingsDirect (the online branch of Emigrant Bank), ING and Citibank's Ultimate Savings Account (Citi's online branch). And all of their interest yields have been steadily diminishing.

• Dollar Savings Direct's APY went from 4.0% to 3.5% to now 3.2%


• ING's recently decreased from 2.4% to 2.2%


• Citibank USA's APY is now at 2.4%.

Hmmmm... as APYs go lower and lower, perhaps I will reach the point where potential returns of investment vehicles outweigh my need for security. But, with dividends getting slashed and Treasury bonds yielding virtually close to nothing, I'm out of ideas of where to put my money. Any ideas?

I Have A New Frenemy

I first heard the word "frenemy" in the movie, Mean Girls. (Lindsay Lohan’s 2nd best movie after The Parent Trap, IMHO.) And today, I just discovered that I have a frenemy in BofA.



As you know, I gave Chase the heave-ho earlier this month when it increased my minimum monthly payments from 2% to 5% of the balance and started charging me a $10/month service charge. [Chase reminds me of my passive-aggressive ex-boyfriend who was too wimpy to dump me, but instead made my life so miserable that I had to leave. Come to think of it, that’s MY break-up M.O. too! I guess what goes around, comes around, eh?]

Anyhow, as a result, I transferred my cc balance of $11,938.91 to BofA, who offered me a 0% APR until October. They of course charged me a hefty 3% transfer fee of $358.17, but at least they were upfront about it. And truth be told, I also actually like BofA, since that's where I keep my primary checking account and they provide a good, reliable service. Plus, they also gave me a couple of free vinyl check covers. (If you haven't noticed, it doesn't take much to make me happy.)

I finally got my BofA credit card bill and was a bit taken aback. The transferred amount and the transfer fee were correct. But unlike the standard minimum monthly payment that most credit card companies require (i.e., 2% of the balance), BofA is only requiring 1%. Hmmmm…. Why could that be?

Theory #1: Could it be that BofA isn’t interested in collecting my money?
Naaaah. That would mean hell froze over.

Theory #2: Could it be that BofA is being charitable?
Nyet. That would mean that pigs are flying.

Theory #3: Could it be that BofA is trying to "run out the clock" on the 0% offer?
Ding, ding, ding, ding, ding!!

Et tu, BofA?

Chase couldn’t wait to chase me out (no pun intended). In contrast, BofA is eager to keep me from paying the balance off in full by October. With "friends" like this, who needs enemies?

Boy... If I wasn’t motivated enough to get rid of my credit card by October, I sure am now!

Is Tracked Shipping Worth It When You Purchase Off the 'Net?

Call me old school but I rarely buy stuff online or by mail order. I recently ordered a box of checks and a check cover from Checks in the Mail. When I placed my order, I opted for free shipping (bulk rate, non-tracked, US mail), although the company recommended shipping + tracking.

Ultimately, I got my checks but my $6.99 vinyl check cover never made it. (Sounds like a perfect example of pennywise, pound foolishness. Damn.)



I've placed an email complaint about this but I suspect that since I opted for the cheapest (free) delivery method, they'll tell me I'm TSOL. Bummer.

I've never had problems with Checks In The Mail in the past. But then again, I've never ordered anything other than checks from this company. I doubt I'll ever do that again.

Many PF bloggers like Miss M are writing about how you can get money back from sites like ebates. Although my interest is piqued, this recent experience makes me less likely to buy stuff online since I'm too cheap to pay for tracked shipping.

Anyhow, I am happy to report that I've mitigated my loss, though. I went to Bank of America to deposit some checks. I asked the friendly teller whether she had any check covers she can spare and she gave me two.

I guess there's something to be said for banking at a traditional bricks and mortar bank. :-D Now I'm not so bummed about my lost $6.99 check cover. (Actually, I'm still pretty bummed.)

This made me wonder, though: Do most people pay for tracked shipping when they order stuff off the internet? I wonder if I should do so in the future? Is it worth the additional money to save myself from the aggravation of a missing delivery?

Opened A True Free Checking Account

It dawned on me over the weekend that my checking accounts with two different brick and mortar banks are not truly free since they require automatic deposits.

Although I survived the most recent round of layoffs, I'm not sure how much longer I'll be employed. In the event that I'm laid off, my automatic deposits will stop and my brick and mortar checking account will start charging me a fee.

Of course, I have the option of transferring some of my savings money to my non-interest bearing checking accounts so that I can meet the minimum balance at which the banks will waive the monthly fee. Screw that.



I currently have an automobile loan and a muy pequeno savings account with a local credit union. (The majority of my savings are with online banks like ING and DollarSavingsDirect.) I decided to open a checking account with my credit union since it offers free checking (minus cost of paper checks) with electronic statements. Sweet!

But in order to open an account, the credit union ran my credit report. Uhhhh... Not so good. I was recently so happy about increasing my FICO score to 712. Bummer. This'll take a hit.

With my new checking account number in hand, I tried to link it electronically to my ING savings account. Unfortunately, I was stumped by ING's security questions. I clearly got one or all of the questions wrong. For example, it gave me a list of phone numbers and asked me to choose the number I've had in the past. Are you serious? None of them looked familiar. Does anyone really remember the phone number they had during college?

[Sigh.] I'll now have to order paper checks and send a voided copy to ING to link my account. What a hassle!


While we're on the topic of ordering paper checks, in this age of online banking, I surprisingly have occasions where I still need to write paper checks (e.g., my rent, linking online banks). So I usually purchase my paper checks from Checks in the Mail. When ordering, I always check to see if anyone has posted any discount codes on the web. Sure enough, I found a couple: "couponcraze" (save $1 off check order) and "save20" (save 20% off check order). Cha-ching!

Once this is all complete, I'm also considering opening ING's Electric Orange checking account and making that my primary checking account since it offers an interest rate of 1.5% APY. ING is currently running a $50 bonus promotion right now to those who have an existing Orange Savings Account. (Reference code: EM227). The only problem with this offer is that you'll have to activate your Mastercard debit card and make 3 signature-based purchases within the first 45 days the account is open.

Maybe my goal next year should be simplifying my banking. This is getting out of control!