Money Management

What Works For Me – Checking And Savings System

I have three checking accounts – a primary checking account at our local bank, a business checking account with the same bank, and an online interest-bearing checking account with ING Direct.  I also have an online savings account, also with ING Direct.

Click here to read about how I use these four accounts to manage the flow of my money.

Right Now –

I’m pretty satisfied with my current setup.  My primary checking account is a joint-account that I share with my wife.  We only write a few checks each month, so we rarely have to purchase checks.  The account is free and doesn’t require a minimum balance.

Transferring money to and from ING couldn’t be easier, and their customer service is second-to-none.  I’ve been and ING customer for more than eight years and I’ve never had a problem.  There are other online banks that offer slightly higher interest, but I’m hesitant to leave ING.  I’m impressed by the fact that I can get a real person on the phone when I call them.

The business checking account is my most rarely-used account.  I’ve set it up so that any business-related income is automatically deposited into my business checking account.  If I need to access the money in the account, I simply initiate a transfer, from business checking to my personal checking account.  I only do this four or five times a year.

Possible Future Improvements –

As I stated before, I’m actually pretty happy with my current system.  That being said, I do see some room for (possible) improvement.

First, it wouldn’t be a bad idea to look for a free primary checking account, from a local bank, that would be interest bearing.  (Interest bearing simply means that the bank pays interest on any money deposited in an account.)  My wife and I do not have access to direct deposit from our employers.  So, it’s absolutely necessary that we have access to a local bank branch.  If we did have direct deposit, I would simply have our checks deposited with an online interest bearing account, and be done with it.  As it is, deposits must be made manually.  We live in a rural area, and the banking options are somewhat limited.  I’m always on the lookout for a better primary checking account.  If I see one, I just might make a switch.

Second, I might want to think about finding an online bank with higher interest rates.  One of the best sites on the web for finding interest rate information is Bank Deals.  I’ve visited Bank Deals dozens of time, and almost pulled the trigger and opened a new account.  Right now, I’m really focused on rebuilding my emergency savings.  Once I’ve fully rebuild by savings, I might consider a little rate-shopping.  We shall see.

Finally, it might be smart to open an account with a local credit union.  At some point in the (distant) future, I might want to borrow some money to buy a home.  (My current plan is to pay cash for a new home, but plans can change.)  I’ve heard from several close friends that it’s a good idea to have a relationship with a local credit union.  Again, it’s something about which I should think.

What About You? –

I’d love to hear from you, my awesome readers.  How many checking / savings accounts do you have?  What’s the perfect system?  Do you and your spouse use a joint account, or do you have separate accounts?  Leave comments here and / or connect with me via Twitter.  Those who are reading this via RSS or Email should click this link to visit the site and leave a comment.

5 thoughts on “What Works For Me – Checking And Savings System

  1. I have a credit union that I leave a few bucks in if I have to deposit a paper check, but mostly I use Fidelity Mysmartcash. It “overdrafts” from the tax-free money market, so effectively my checking is my money market slush fund.

    It lets me use any ATM, even those rip-off ones, and refunds the fee the next day, even abroad. *love* Fidelity BillPay is incredible. You also get a human when you call Fidelity.

  2. We have our main account with an online bank. We were with bank of America, but their customer service was horrible.

    We’ve been fortunate to have direct deposit with our jobs and we transitioned the bills to come out of ING. We also have two small individual accounts with a national bank for incidentals. If in an emergency comes up, we can access the accounts.

    We’re currently using proportional budgeting to determine how much each of us puts into the joint account. Basically the deposit is based on the ratio of our income to the family’s total income.

    It’s worked well for us, but there’s always room for improvement.

  3. Argh, the internet ate my first comment. Here it is again…

    My husband and I have 3 checking accounts and 4 savings accounts between us. Here’s how they break down:

    1) 2 individual checking accounts with Bank of America. (@Laura: we hate them too, but they’re the most convenient bank around here.) We use these for cash and check deposits, which are immediately transfered to our ING “Stash”. It would be simpler if we had a joint checking account with them, but we currently have too much inertia to switch 😛

    2) 1 joint checking account with ING.

    3) 2 joint savings accounts with ING. One is our “Stash”, where our paychecks and any BoA deposits go. The other is our “Emergency Fund”.

    4) 2 individual savings accounts with ING. We fund these with a set small amount each month from the “Stash”… so these basically hold our personal “allowances”. This way we have joint finances with a little personal financial freedom on the side. We both get the same allowance no matter how much we put into the joint accounts… our philosophy is that any income we have is the family’s shared income.

    So every month we transfer our budgeted amount from the “Stash” into ING checking and pay all our bills from there. If we need to go over budget, that gets funded from our Emergency fund or personal funds, neither of which we ever want to touch, so we’re pretty strongly incentivised to stay under budget! 🙂

    And while it seems like a lot of accounts, 5 of them are with ING, which feels like one account with some internal organization. Gotta love ING.

  4. My credit union has made life simple. We have one checking account that currently pays 4.05% on the first $25,000. I have almost that much in the account and i have a hold on the portion that is my emergency money so it is unavailable to me. When I need it i just call and get the hold removed or reduced to a lower amount. So my emergency money is payin gout a great rate. Any money beyound that $25,000 goes to longer term investments like our mutual funds. t makes no sense keeping cash in savings accounts if you can’t at least get 2-3% at a minimum.

    The best thing going is the remote deposit option. I can scan a check at home for deposit into my account. So i scan a check get the confirmation number and destroy it after the transaction. Never need to go to the bank.

  5. I’ve never heard of the remote deposit thing… very cool. But most, if not all, credit unions are part of the national shared branch system. I belong to a credit union 2 hours away. But I can make deposits in the ATM machine at several local credit unions with no fee. I find it humorous that the deposit is credited immediately, but if I had deposited it in the ATM rather than the drive through at my own credit union they hold it for a day or two… go figure! And credit unions often offer interest bearing checking accounts. Something worth looking into.

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