- Bargaineering - http://www.bargaineering.com/articles -

Spread Your Savings Across Multiple Online Banks

Update: My funds are now safely split amongst FNBO Direct [3], ING Direct [4], and an HSBC Direct [5] account. (ING Direct is merely my online account firewall with PayPal, so it doesn’t have the same amounts as the other banks)

Right now I have all my savings, including my 0% balance transfer funds, in an Emigrant Direct [6] account. With the latest hubbub about Bankrate lowering their rating to two stars [7] (read the discussion here [8], hat tip to Tessa to clueing me into it initially), I started to rethink my online savings “strategy.” Tessa mentioned that Emigrant Direct could potentially hold my funds hostage for 30 days and so I thought… I shouldn’t have all my eggs in one basket. (Honestly, if I’m in a bind and need the money, any delay is too long) Right now, 75% of my cash is in that Emigrant Direct account (but half of that is 0% balance transfer money)… which is way too much anyway.

All my eggs are in, basically, one basket and it’s something I’m going to remedy. I just opened up a Virtual Bank account, who has competitive rates as well, and I hope to be able to link the two accounts together so I can siphon off half the contents of the Emigrant account. That way, if something fishy happens to Emigrant or with Emigrant (money there is FDIC insured anyway), I have access to the other half in Virtual Bank. (I opened up a Virtual Bank account and not an HSBC account [9] because there is a $20 referral bonus, email if you’d like one [10])

Something you should be considering if you aren’t already.