Savings

In a previous post I mentioned Emergency Savings.

There are a number of Online Savings account available to meet the Savers needs.

Personally, I use an HSBC Direct savings account. Their current rate is 5.05%. Update: 3.55% APY as of 4 Feb 2008

That's a pretty good rate for only having to deposit just $1 to open the account, no monthly fee and no minimum balance requirement.

It is an Online account. That is how they can afford to pay such a good rate... because there are no tellers involved. That is cost efficient for them and just plain good for us savers.


For me, Online is where I keep my Emergency Savings.

At my brick and mortar bank, I flow enough money through my regular savings and checking accounts to meet my obligations and fund my investments.

After that, the Online rate is just too great to not take advantage of and as I try to build my Emergency Savings anytime I have extra money HSBC Direct is where it goes.

Now, this is something I feel I should tell you. It takes a few days to perform transfers from bank to bank.

In a way, I feel that is good. It makes you think before you raid your savings... hehe.

But, if it really is an emergency and you need your money it will take a few days to gain access; hopefully those days aren't that crucial. So that is something to think about. With a little emergency planning, taking advantage of these higher rates should be doable.

HSBC does offer an ATM withdrawal, but to be honest I don't know anything about how wide their network is... I'm sorry. I will work on that.

If your situation is as such that you need faster access then I'm sure that there is still a place for an online savings account for at least a portion of your savings.

I know it sounds like I am waffling on this a bit. I mean the words, "Emergency Savings" bring with them the connotation of money needed fast to met the needs of an emerging situtation. But, I only know my situation and not yours. I can speak to what I am comfortable with and it's up to you to figure out the comfort level of your situation and hopefully what I say helps with that.

It's just that unless you have a lot of money, Banks just don't pay you a very good rate on your deposits.

Online... you can get a great rate and that great rate will help you build your Emergency Savings faster.

Hopefully, I've at least given you something to mull over. Something that will help you strengthen your financial future.

Happy Saving.