Thursday, June 21, 2007

Firing your bank

Who knew firing your bank would be so hard? I have been mulling over taking my primary bill paying checking account out of Wells Fargo and over to ING, to take advantage of their interest bearing checking accounts. For my tiny deposits, I can get a 3.8% interest rate. That's a lot better than 0%. The question is, how can I set all of it up with the system I use?

Maybe my system is too complex!

I have a savings account with FNBO (bulk of my emergency fund), that will stay the same. I have a checking account with Wells Fargo with direct paycheck deposits. This is where I currently pay my bills from. It's also my spending account, since we have debit cards with it. I have a savings account with Wells Fargo as an "immediate" emergency fund. It's $1k that I can transfer if I absolutely need money that day. I have a second checking account with Wells Fargo that is my readjustment account, ie all the bills that don't occur every month I transfer weekly into. It's a "pool" of money to pay irregular bills with.

Its the readjustment account that I want to switch to ING. My regular checking usually has very little money in it (I be broke), so I'm not concerned with earning interest on $23.51. But I regularly have up to a thousand in the secondary checking, just sitting there waiting to be zipped away to some company's bank account and on to an executive's Ferrari payment.

The thing is, ING offers free bill pay. I am paying $6/mo with Fargo. So obviously I want to combine my bill pay checking and my secondary readjustment account into a single "Billing Account". I'll just need to transfer money from my regular checking into ING.

Here is another problem. I'm going to have a large pool of cash in the ING account to pay bills, and I am going to need to keep track of what that money is earmarked for. So, I'll need to add another spreadsheet. At some point I am going to have to review my financial management plan and look for ways to simplify it. I really think combining the bill paying account and the readjustment account (irregular bill cash pool) is a good idea.

This is as far as I want to go. Could I dump WF entirely? Probably...but I just can't seem to get away from that brick and mortar bank. Their buildings are so pretty.

1 comment:

Jim said...

I thought my system was complex. When I got my house I ended up going through another bank to get my mortgage, and got a rate deduction by opening a checking account with them, direct deposit my paychecks to it, and doing the electronic payment of my mortgage. What is left over I transfer (by depositing a physical check) to the bank I have my checking/savings account at. The only reason I keep using my bank is tracking debit/pin purchases and such (my other bank runs 1 day behind). I have an emergency fund in my saving account (way too accessible) which I have thought about putting into a high interest checking account at ING or HSBC.

I like your system with paying those irregular bills. When I get to June and December of every year the car insurance throws me for a loop. This year I'm earmarking a 'payment' to myself to hold over so I don't have to worry. Christmas also seems to jump out at us even though it's always in December. As a kid I loved Christmas and last year I feared it, which is when the gravity of my debt hit me. So I would like to save for that too and it won't put me on edge this year.