Posts Tagged savings account
The 1% More Savings Calculator
Need some motivation to help you save a little more from your paycheck? The New York Times has a nice calculator that will show you exactly how increasing your savings by just 1% can make a significant difference over time. One thing to note, by default they have the “expected annual return” set to 5%. I’m not aware of any savings accounts that currently offer that kind of interest rate, so you’ll want to move that slider to whatever your savings/money market/CD is earning for you.
Increasing your savings by one more percentage point – or even better, another percentage point a year – can add up to big additional savings over time.
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.
