The things you learn from your kids. When Older Son went overseas, he closed out his accounts at the bank down the street and moved everything into two online banks. He assured me he’d done his research, and he had; when I checked on it later, I found Consumer Reports had good things to say about the banks he selected.
The reason I went checking was not to second-guess Older Son. The bank down the street is convenient and used to be locally owned, but it got greedy during the housing boom and made a bunch of goofy loans that would have gotten its officers failing grades had they still been in bank school. The result is that the bank has been in Big Trouble lately and is taking it out on its customers (who, I might add, had nothing to do with making the goofy loans and in fact moved all their accounts to this bank about eight years ago because it had a solid reputation for being financially prudent…)
First the bank started raising fees all over the place unless you had a gazillion dollars on deposit, which would be silly because the bank lowered the interest it pays on deposits at the same time the fees went up, so the gazillions you have on deposit would earn about 20¢ interest each month.
Then the bank announced it was merging with Big Successful International Bank That Didn’t Make Goofy Mortgage Loans and would be changing their name to BSIBTDMGML and by the way, axing a whole bunch of people who work in the corporate office who had nothing to do with their goofy loans. (Full disclosure: this includes a friend of mine.)
For the time being we are still keeping our household money up the street, but I have moved my personal hundreds to one of the online banks Older Son is using. I am keeping a close watch on the interest rates.
And guess what? My no-minimum-deposit checking account is getting twice the rate of interest BSIBTDMGML is paying on our mid-four-figure-minimum-required Insured Money Market Account. The money I have been saving to replace my current computer is now sitting in a No Penalty for Early Withdrawal CD at the online bank, where it is is earning five times as much interest as the ten times as much money we have on deposit in our joint IMMA at BSIBTDMGML.
We are still talking pitiful amounts here, in the neighborhood of 1.2% APR, but it’s a darn sight better than the .23% we’re getting on our joint IMMA. By the time I cash in the CD for the new computer it’s earmarked for, I bet I will have earned earned enough in interest to fund a pretty nice lunch on the way home from the Apple store.
© 2011 Anne Bingham and Making It Up as I Go