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Spread Your Savings Across Multiple Online Banks

Posted By Jim On 07/14/2006 @ 2:11 am In Banking | 13 Comments

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.

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[1] Tweet: http://twitter.com/share

[2] Email: mailto:?subject=http://www.bargaineering.com/articles/spread-your-savings-across-multiple-online-banks.html

[3] FNBO Direct: http://www.bargaineering.com/articles/r/fnbodirect.php?tag=spreadSavings

[4] ING Direct: http://www.bargaineering.com/articles/r/ingdirect.php?tag=spreadSavings

[5] HSBC Direct: http://www.bargaineering.com/articles/r/hsbcdirect.php?tag=spreadSavings

[6] Emigrant Direct: http://www.bargaineering.com/articles/r/emigrantdirect.php

[7] rating to two stars: http://www.bankrate.com/rates/safe-sound/memorandums-memos.aspx?fedid=137915&pid=p:brg

[8] discussion here: http://bankdeals.blogspot.com/2006/07/emigrant-bank-downgraded-to-2-stars.html

[9] HSBC account: http://www.bargaineering.com/articles/r/hsbcdirect.php

[10] email if you’d like one: http://www.bargaineering.com/articles/contact-me

Thank you for reading!