Comments on: Saving for a Wedding Next Year

By: Brian

Brian — Fri, 22 Dec 2006 17:01:52 +0000

Flexo, you’ve given great advice to your coworker. Readers here will nitpick on the small details, but I would imagine she will be far better off than had she not seeked out your wisdom.

Have a prosperous new year.

By: Matt

Matt — Tue, 05 Dec 2006 21:07:58 +0000

Personally I’d have gone with the CD, but there are lots of options in the 4.5-5% range that are more than adequate. I would say it’s impressive how much market penetration ING Direct has gathered for themselves.

By: Dan

Dan — Tue, 05 Dec 2006 02:31:24 +0000

Another liquid account that is paying a very high rate is Citibanks E-savings it has been at 5% for a long time now. My future wife and I have this account with also a joint checking account, so when we have to write checks for wedding we just transfer from our E-savings to your check. At http://www.Citibankonline.com under Banking it says E-savings. It has been great!!!

By: Lazy Man and Money

Lazy Man and Money — Fri, 01 Dec 2006 00:44:35 +0000

Tom, I see what you are saying, but the complexity of dealing with two accounts and referring a husband is probably more work than it’s worth. If the person wants to go through that work they might as well earmark $500 or whatever it is and do that to get the free $60. Then they could put the rest in the higher interest account. They’d have their cake and eat it too.

I presume this couple isn’t looking to WORK for the absolute optimal strategy. They probably just want to earn more than their current checking account. It sounds like anything over 4.0% would have been a great service to them.

By: JR

JR — Thu, 30 Nov 2006 20:58:53 +0000

I’m using ING for my vacation savings account, because it was dead simple to set up so that both my wife and I can contribute to it from our separate checking accounts.

As for the E-Loan savings: I’ve had no problem, but a LOT of people have had terrible problems with double withdrawals from their checking accounts, which in many cases depleted the accounts, causing insufficient funds fees. Check out this Fatwallet thread… I linked to a random page, but there are a lot of people very upset with E-Loan!

In addition to the teething problems, their functionality is not very good (you can’t set up repeating transfers and can’t view scheduled transfers, for example). They’re probably not worth the extra few percentages when there are so many other good banks.

By: Matt

Matt — Thu, 30 Nov 2006 17:31:42 +0000

http://www.savingsbonds.gov
You could set up a free account with treasury direct and purchase 28 Day Treasury Bills at 5.25%. The rate is lower than others but interest earned on Treasury Bills is tax free at the state and local level. Treasury direct can pull the money directly from your ING account.

By: Jeremy

Jeremy — Thu, 30 Nov 2006 16:08:59 +0000

Does she have an existing non-retirement brokerage account? If simplicity is key here she could easily get over 5% in her existing account by putting some cash into one of the many money market funds offered by virtually any fund company. No bonus for signing up obviously, but if the account already exists it could be a very easy transaction. And no early withdrawal penalties like with CDs.

I actually just posted about this on my site yesterday when I heard of the ING increase.

By: Nick

Nick — Thu, 30 Nov 2006 16:03:14 +0000

You should tell them to take their cash to Vegas and bet it all on a hand of blackjack. If they win, they’re destined to be together forever. :)

By: Tom

Tom — Thu, 30 Nov 2006 15:10:14 +0000

Flexo – Yup, you’re right on the bonus, but she would actually be in line for $60 in total. She would open an account with the $25 bonus, then refer her fiance for his $25 bonus, which would give her another $10 bonus. Just doing some quick math, even a total deposit of $15000 would still make ING a better deal. It’s almost entirely because it’s only for the short term. That bonus is terribly difficult to overcome!

By: Flexo

Flexo — Thu, 30 Nov 2006 14:52:14 +0000

All valid points. She was depositing enough money for the wedding to make the ING Direct bonus not an issue, theoretically. The bonus is still $25 last time I checked. While she could have deposited $250, the minimum to receive the bonus, in ING and the rest elsewhere, for her, simplicty trumps the small gain.

E-loan’s rate is higher and I am sure it’s a good choice. I just wouldn’t recommend to a person I see almost every day a product which I have never used.

I’ll get around to opening an account there for myself, but moving my money around from bank to bank isn’t at the top of my priority list at the moment. :-)

By: John

John — Thu, 30 Nov 2006 13:39:43 +0000

Another consideration is a E-loan savings account, currently 5.50%. Though the opening minimum is $5,000, the opening process was a smooth as a babies bottom.

By: Tom

Tom — Thu, 30 Nov 2006 13:28:44 +0000

You may have done her a disservice!

While it is true that ING doesn’t have the highest interest rates around, the sign-on bonuses, especially in the short term more than outweigh any lower interest offering. I believe someone within the blogging world ran the numbers and came up with an initial deposit of $4007 in order to overcome the interest rate gap. This number, though, was calculated prior to the recent rate increase. Assuming an account is opened for both the bride and the groom, the gift would have to be more than $8000 in order to have ING _not_ be the place to be.

By: F2O

F2O — Thu, 30 Nov 2006 13:23:13 +0000

That’s where my soon-to-be-wife and I are stashing our wedding funds. The savings account is a better option for us since we will be making payments to different venders over the next 9 months or so. I didn’t want us raiding our other savings for wedding costs, so the liquidity of it is perfect.
The only thing I don’t like about HSBC is the time frame of their ACH transactions. It seems to take forever.