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What I Did With My Bonus

This article was written by in Career and Work, Debt Reduction, Real Estate and Home. 30 comments.


After taxes, my bonus amounted to about $2,000. The funds arrived in my checking account this morning, but thanks to an automatic transfer, the entire sum has been whisked away to a savings account at ING Direct for “relocation.” This account contains the funds that should be used towards my next move, whether a down payment for a house or general moving expenses.

I contribute to the relocation fund every week, but it’s nice to throw a larger amount at that goal. Why not put that money towards debt instead? Simple. The interest I earn on that savings provides more to me after taxes than I could gain from paying off low-interest loans. The calculation is closer now that it’s unlikely I’ll qualify for a credit or deduction for my student loan interest, but savings in a high interest money market account still wins.

If interest rates go down, this scenario might change It may turn out to be beneficial to pay down the student loan interest, but I’ll still need cash on hand for when I move.

Updated June 16, 2011 and originally published March 2, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 10 comments… read them below or add one }

avatar mnc

Flexo, I’m a big fan of ING as well but recently opened an account at HSBCdirect to take advantage of their 6% APY on new deposits promotion.

While I don’t think the web interface is as nice as ING, I transferred my parked cash courtest of American Express over there to earn the higher rate.

I wrote about my experience with opening the HSBC account and my impressions on my site if you are interested.

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avatar Luke Landes ♦127,505 (Platinum)

I have an account at HSBC Direct as well to take advantage of their higher interest rate.

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avatar tolak

My company lets us deposit all of it directly to 401k, which I did, and I’m maxed for the year :)

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avatar Jerry

We’re supposed to get profit sharing if we ever make any money. I don’t know what I’d do with it though.

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avatar Phil

Can’t wait to use mine for a house down payment. I get it next Friday.

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avatar Marshall Middle

ING rocks. I have automatic deposit.

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avatar Jason

I’m about to pay off some debt and could start tackling my student loans as it will be the only debt remaining. However, the interest on that is only at 4.5% and will be decreasing another 1% in about a year. As long as I’m still receiving 5.05% from Emigrant Direct I assume it would be recomended to just stash whatever extra payment I would make to the loan into my Emigrant account to gain the savings there until their interest rate falls. Any thoughts?

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avatar tinyhands

Just to clarify, but the implication here is that you have more than one savings account which might not be in your best interest as opposed to simply tracking ‘accounts’ on paper. Aggregating the funds into one bank account might qualify you for lower fees, higher interest rates, or other perks.

I’m sure you’re already aware of that, but less experienced readers might not be.

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avatar mstein_88

Online savings accounts rock. I have literally no need for my brick-and-mortar bank’s savings offerings.

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avatar JeremyAnderson

I am tremendously happy with my ING Orange Savings Account. It’s the only online banking I’ll ever do…

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