Limit of 6 ACH Transfers on Savings Accounts

There is a limit of six transfers, ACH or otherwise, per statement cycle on savings accounts as mandated by the Federal Reserve board Regulation D, which defines the rules of each account type and its reserve requirement. Why is this important? With the advent of online savings accounts and the chase for a better interest rate, ACH transfers into and out of savings accounts are becoming more frequent. Before online savings accounts like ING Direct and Emigrant Direct, when you actually had to visit a bank to initiate an ACH transfer; a limit of six transfers on a savings account wasn’t really a problem. In fact, you’d be hard pressed to initiate six in a year, let alone six within a statement month. Now, you can initiate six ACH transfers within a statement cycle without really realizing it and that can be cause to terminate your account!

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Direct Deposit Saves You Money

A recent survey highlighted by CNN Money showed that only 59% of those aged 45-64 used direct deposits, compared to 72% of seniors (65+). The three reasons they listed, as to why they don’t use direct deposit, were they liked going to the bank to cash their check (21%), they don’t trust it (19%), and they preferred receiving a paper check (18%). There are a lot of reasons why everyone should be using direct deposit, especially now that all the kinks have been worked out.

It saves you money to have the money directly deposited. Everyone saves money when you use direct deposit. Your company doesn’t have to mail you a check (though sometimes they mail you a paystub anyway), you don’t have to drive to the bank or take time out of your day to cash the check, and your bank doesn’t need to process a paper check (though this was made cheaper by Check 21).

It can help automate your savings. Many employers offer the ability to direct deposit to multiple banks. Send a steady percentage each month to your emergency/vacation/slush fund and the rest to your primary bank account. You’ll soon find yourself flush with cash you didn’t even really think you were saving.

Direct deposits don’t get lost. The USPS is pretty reliable but for anyone depending on their next paycheck, you don’t want to be that one out of a few hundred thousand that gets unlucky and has their paycheck lost or mangled beyond cashability. Also, let’s say you get the check but can’t get to the bank… what if you lose it? Getting a payroll check cancelled and reissued can cost you a lot of time and potentially some money (for the stop payment).

You earn interest faster via direct deposit. This is less of a financial reason than a psychological one because the difference in interest is negligible but if you direct deposit, you earn interest the moment the money hits your account. There is no waiting for the postal carrier, the drive to the bank, the waiting period for the check to cash, etc.


How I Avoid ATM Fees

A majority of my cash is spread across two bank accounts, Emigrant Direct and my company’s federal credit union, which means the number of no-fee ATMs I have access to is very low. Emigrant Direct has none (it’s entirely online) and my company’s federal credit union only has ATMs here at work yet I have never paid a single ATM fee despite the dearth of branded ATMs because I try to plan ahead – and so can you. Here are a few of the strategies I employ… and please feel free to add any that you use that I may have missed.

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Opening Treasury Direct Account

In reading learning I-Bonds and Treasury Direct, I felt it important that I actually open a Treasury Direct account even if I didn’t plan on buying any bonds just yet. It’s a quick five minute process and besides the typical personal information, it would be handy to have your driver’s license and your bank information (that you’ll link to the Treasury Direct account). I opted to use my Emigrant Direct account (Name: Emigrant Savings Bank, Routing #: 226070319, it’s important to have the name typed correctly) as the linked bank.

The account opening process was two pages long (the second was just pick a password, a hint, and some security verification questions) and I was surprised that the password could only be a combination of letters and numbers but no big deal. According to the webpage my account was setup and ready to go, less than five minutes! Look in your email inbox for an email with your account number.


Emigrant Direct Savings at 4% Interest!

With the increase in short term interest rates by the Fed, Emigrant Direct is now offering 4% interest on their American Dream accounts. Four percent! That’s better than a lot of CDs.

For information on Emigrant Direct itself, read my Emigrant Direct review.


Best Place To Store Cash

CNNMoney has a great article on the best place to put your short term funds. They discuss the merits and drawbacks of savings accounts, money market accounts and CDs for those of you who aren’t familiar with the differences. Personally, I deposit my cash with Emigrant Direct, get my 3.5% interest and can relax knowing I have the flexibility to withdraw and deposit at will (not possible with CDs and limited ability with money market accounts). Now, if you’re not comfortable with online banking then perhaps you’ll find a good alternative in their article.

 Banking, Reviews 

Emigrant Direct Account Opening Guide (and Review)

Updated 9/19: Emigrant Direct’s interest rates are at an impressive 4.0%!

So about three weeks ago, like a week before they raised their rates to 3.25% (and before ING raised their rates to 2.80%), I decided I was going to open up an Emigrant Direct account so I could get the best interest rate possible by having the accounts opened already. I had heard about some confusion and difficulty with opening an account with Emigrant but for the great rates I was willing to brave it and have posted the following as a guide to make the process as painless as possible. So the oddesey begins with a click on the “Open Account” button…

The first thing you have to realize is when you first open an account, the information you receive about an account number, your chosen username and password, will not give you access to your account immediately. After the test deposits are deposited in and withdrawn from the externally linked account you specify, click on the link in the email they sent to verify the external account.

At this point I had messed up and omitted a digit from the end of my account number so I had to call in and change it. The email that they sent asked me to talk to a specific person (two people), who I then asked to talk to. One person was gone and the other didn’t want to answer the phone, which rang about thirty times before I was kicked back into the normal customer service pool again where a random CSR helped me. I wonder what the point in sending me to a specific person was if anyone could’ve helped me.

So now the external account was verified, I needed to wait a few days for a paper package in the mail with my account details. It was just a letter with my new account number and some “instructions.” Anyway, back to I go and I click on View Account. Then… this is where there’s a little more confusion, I can’t login yet. I have to click on the “Sign Up” link located in the “New Customers” box underneath the login section. Once there I had to verify some information and I was finally in!

But I couldn’t transfer money from an external account yet! Just click on Message Center on the left sidebar, click on Contact Us, and send them an email with the following information (you can cut and paste the one I’ve included):

I’d like the links to transfer money between my Emigrant
Direct account and the external linked account activated

In a day or so there should be an External Transfers link for you to transfer money into the account and you are set! This should help you make the process, which takes around a week and a half overall, as painless and clear as possible. I hope you find this helpful and let me know if I missed something.

 Personal Finance, Reviews 

ING Direct Rate Hike – 2.80% (still not gonna cut it!)

Looks like ING has probably lost a whole bunch of customers so they are trying to keep what they have left by upping money market account rates to 2.80%. As MM at PFBlog pointed out, there are four banks offering over 3.0% so this move may not result in any changes in people’s decision making. I recently opened an Emigrant Direct account because of their generous 3.25% rate and haven’t looked back yet. And with the Fed also expected to raise rates by a quarter point today, this increase by ING isn’t as significant as it sounds.

But would you move your money from a 2.80% account to a 3.25% account? If you had $10,000 in there the difference is only around $45. If you had $1,000 then we’re only talking $4.50 in interest when Emigrant Direct’s account opening process still has some kinks. So this stop-loss move may be successful on some level.

From my perspective, ING has to be willing to match Emigrant Direct and stop these shenanigans. With electronic banking, moving funds after the account has been opened is simple, safe, and fast. ING is just showing weakness by trying to stop people from leaving instead of increasing rates beyond Emigrant in order to gain new customers. ING doesn’t have brick and mortar banks… its rates should be better than Emigrant’s! (at least ING still has their $25 referral bonus)

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