(no subject)

[which_chick]

The Fed raised interest rates again on this past Tuesday. I'm happy rates are going up. I like higher interest rates because higher interest rates mean that I make more money without doing any more physical labor. Sometimes, people ask me why the hell I shop around for interest rates. After all, it's just a savings account and they just pay a pitiful rookerful, mere pennies. Why do I waste my time like that?



The best I can figure, the people going on about the uselessness of shopping around for interest rates on savings accounts don't have any fucking money. Once you get past a certain point, even marginally better interest rates will turn up improved profits to the tune of a couple of lattes a month. Please, we will not have the rolling of the eyes. (A latte is a perfectly good measure of profit in the Teep Economy. It's no worse than the giant stone coins of the Yap Islanders, anyway.) It is worth my time to chase after half a percentage point in interest. It is worth my time to chase after a quarter of a percentage point. Below that, it's not worth my time. Checking out interest rates should take less than half an hour at bankrate.com -- that's actually the easy part. Opening the account is normally the pain in the ass.

If you're not sure whether or not it's worth your time to open a new account at a higher rate and you don't want to do math to find out if the improved return is more than you make in an hour (which is what it will probably take you to shop for a rate, select an account, investigate it, and mail off the application and a check to start the account), you can apply my handy rule of thumb: if you can't do a quarter of a percentage point better, stay where you are. At a quarter of a percentage point, evaluate the relative difficulty of signing up for the new account. If the pain-in-the-ass factor is minimal, go ahead. If it looks to be annoying as hell, hold off for half a percentage point. At half a percentage point better than what you're getting, you do what it takes to open the account, even if it's annoying.

I don't check for interest rates every single day. I look about every other month or so. This isn't the kind of thing that you have to attend to all the time. Checking in on it every so and when will give you perfectly good results. So, y'know, why don't more people do this? Okay, interest rates are a lot more fun when I get interest payments of three figures than they were when I was making like 7.62 a month in interest. I grant that. But... you can still learn to play the game with a modest savings account. A thousand dollars will get you nicely started and many internet banks have no minimum balance at all so that you can start with twenty dollars if that's what you have. You gotta play to win...

Comments

[not-your-real.livejournal.com]

I get attached to my banks. I don't want to leave ING Direct for a better rate because I know my account number, love their relatively clean web interface, and just plain like them.

Also, having lots of old accounts around is messy.

[which-chick.livejournal.com]

It's not as messy as you might think. If it looks like the institution might be interested in offering competitive interest rates in the future and it has a no-fee, no minimum balance account, I keep the account open for later. Right now, that's a total of two banks -- ING and Emigrant Direct, both of which are linked to my brick-and-mortar checking account for ease of moving money. Everyone else... the teaser rate expires, I close the account and move on. It's nothing personal, just business.

ING has a delightful interface and I wish everyone else would copy it... but it's not about whether or not I like their online interface. It's about the profit. I don't have to like their interface. I don't have to like them. The thing that matters, here, is profit. If I were doing it based on personal feelings, all of my money would be in my local bank where they greet me in person, with a smile and my first name, every time I walk in the door. However, my local bank pays something under one percent on savings and I just can't take that kind of hit (it comes to something more than a hundred dollars a month) for the joy of a friendly face who knows my name.

[fooliv.livejournal.com]

Ugh, I just *started in on* this CD stuff. Don't ask me to go flailing around now. Not to mention I've never heard of these banks... I think I'll stick with ING for now. I've had enough trouble getting ahold of access to the money I've got rotting away in a near-useless MSA which was the boss's medical-plan bright idea from about two or three ideas back...

[which-chick.livejournal.com]

It takes practice. Get good at doing the CD thing, tracking dates for maturity (they send you stuff in the mail, anyway) and rolling them over and like that. When you have a handle on that, we'll work on advanced banking. :) I can see you quivering with anticipation from here... or is that cringing?

[fooliv.livejournal.com]

The cringing is from the incipient tendonitis I managed to inflict on myself through too much walking about like a damned fool. So much for the "exercise" part of "diet and exercise".

I'm too impatient for this losing weight crap.

[which-chick.livejournal.com]

It takes time. If you're making any headway at all, you're doing better with that project than I am.