Posts Tagged ing
What I Use: Savings Account
Over the next several days, I’ll be detailing all of the tools I use in my financial ecosystem, from accounts to services. I’ll explain what I use and why.
Savings Account: Ally Online Savings
As with your checking account, you’ll want a no-fuss savings account that offers a competitive interest rate. Like my checking account, I previously used ING Direct as my bank of choice for savings. And just like my checking account, I’ve moved my savings over to Ally Bank.
There aren’t many details that need an explanation when it comes to Ally Online Savings. They offer a higher interest rate than most banks, including ING Direct, but as I mentioned in my last post, don’t base your decisions on interest alone. This account has relatively few fees, most of which are the standards, such as overdraft fees. This shouldn’t be an issue for most people, as long as you’re using your savings account for saving. There is no minimum balance to open an account and no monthly maintenance fee.
One item that does need a little explanation is the limit on transactions. You can only make six transactions per statement cycle before being charged a transaction fee. This is a federal regulation, and is the same for all savings and money market accounts, not just Ally. This restriction is not applicable for deposits, which are unlimited. Again, if you’re treating it as a savings account, this limitation shouldn’t pose a problem.
There is one feature that I would like to outline a little bit. Something that I really like about Ally Bank (and ING Direct before it), is the ability to create as many savings accounts as you like. It may sound strange at first, but having multiple savings accounts allows you to funnel your money into different accounts, each allocated for a different purpose. For example, in addition to our standard “Savings Account,” I’ve created one labeled “Vacation Fund.” Once we get our car paid off, I’ll create an account for “Car Fund” so we can start saving for another car purchase down the line. Being able to keep track of your different savings goals in this manner is extremely helpful, and I highly recommend taking advantage of it, if your bank offers it.
What I Use: Checking Account
Over the next several days, I’ll be detailing all of the tools I use in my financial ecosystem, from accounts to services. I’ll explain what I use and why.
Checking Account: Ally Interest Checking
The foundation of any good financial management system is the checking account. Practically everything you do will interact with this account in some way. You want a checking account with few surprises and even fewer fees. Unless your lifestyle requires regular visits to your local branch, I can’t recommend brick and mortar banks, these days. Take a look at the fees they charge and you’ll see why. Online-only banks have lower overhead costs and are able to keep their fees low as a result.
Interest earning accounts are a plus, but in this economy, the amount of money earned from interest is negligible unless you carry a large balance on your account. Ally is offering pretty high interest rates for a checking account, currently 0.50% APY for balances up to $15,000. (Tip: When comparing interest rates, be sure to look at the APY, or Annual Percentage Yield. It will take into account how the interest is compounded.) There are a handful of other banks that offer higher interest, but they either require a larger initial deposit, have various other restrictions, or don’t offer all the features I wanted in a checking account. I wouldn’t recommend choosing a checking account based on the interest rate alone.
Ally’s Interest Checking account has very few fees, and even reimburses fees charged by any ATM you withdraw money from. You get a standard debit card and even real life paper checks – something that my previous bank (ING Direct) doesn’t offer. Being an online bank, depositing money is currently a small hassle. You either need to transfer money from another bank – I have a credit union account that is used only for this purpose – or you can have Ally send you deposit envelopes for mailing your checks to them. They’re in the process of rolling out an e-check deposit system that will let you scan your checks and deposit them directly into your Ally account. My wife and I both have our paychecks direct deposited and I very rarely need to make any other deposits, but this will be a welcome feature, nonetheless.
Some other features that Ally offers:
- No minimum to open an account
- No maintenance fees – Many banks require periodic activity or a minimum balance if you want to avoid maintenance fees. Not cool.
- Ally Perks – Money back from stores, restaurants and more, just by paying with your Ally debit card.
- No ATM fees – As I mentioned above, you can withdraw money from any ATM. Period. Ally won’t charge you anything, and if the ATM you use does, Ally will reimburse it automatically.
- Bill pay – Something that most banks offer these days, but that doesn’t make it any less useful. (Note: In the near future, I’ll write a post on automating all your monthly bills.)
- 24/7 customer service – This is something that Ally brags about a lot, and with good reason. Knowing that they’ll be there any time – and that they speak English – provides a certain piece of mind.
Full disclosure: I’m still currently in the process of switching to Ally from ING Direct. I’m waiting on my antiquated employer to finish changing my direct deposit over. I was with ING Direct for years and had zero complaints, until now. As you may have heard, ING Direct recently announced that it will be purchased by Capital One. I have no interest (finance pun?) in being a Capital One customer. Most people would call me irrational for switching before any changes have been made, or even before the deal has gone through. That’s probably true, but it’s a personal decision. If you have no reservations about what Capital One might do to ING Direct, I can still recommend them for now. It’s really been a fantastic bank for the six years I was with them. Having said that, I have yet to find anything that ING offered that Ally doesn’t.
