How much do you keep in your checking account?

[corn18]

We are in the process of moving all of our investments and banking to Fidelity. FIDO's cash management account (CMA) is very good and allows me to keep all of my money (including checking) in a high yield money market account. So far, I have moved all of our investments over from USAA (taxable savings and both of our Roth accounts). Then I moved our short term savings. Now I am in the process of changing all of our direct debit stuff over to FIDO CMA (mortgage, insurance and a couple of cats and dogs). The only thing left at USAA will be our 2.5% unlimited cash back credit card and all of our insurance.

Once this is all done, I no longer have to worry about how much is in checking. It all earns 2.34% or whatever the 7 day yield on FZDXX is.

[bjl584]

So if your bills are $5,000, do you only keep about that much and the balance dips down close to zero once everything is paid? Or do you keep any cushion in there?

I keep a few hundred dollars in there as a cushion.
My bills are always the same, so I know what I'll need for mortgage, electric, etc.
The only wild card is my credit card bill. I charge everything possible for the cash back rewards.
If I have an unusually expensive month I simple transfer some money over from one of my other accounts when the bill is due.

[QuarterMillionMan]

$80,000. I know I need to put my money to better use. Actually it was more at $120,000 but I recently moved $40,000 into a stock account but that money is sitting idle as well. I saw the investment thread where Capital One is giving a $500 bonus with a minimum $50,000 initial deposit which may get me motivated to open up an account there.

[disneysteve]

$80,000. I know I need to put my money to better use. Actually it was more at $120,000 but I recently moved $40,000 into a tock account but that money is sitting idle as well.

Why? Does the checking account pay a good interest rate? I'm guessing it doesn't. If you keep 10K in checking and move 70K to an Ally savings account (current rate 2.2%), you'll be earning about $130 EVERY MONTH on your balance, over $1,500/year plus compounding.

And when you say you have 40K in a "stock" account what does that mean exactly? How can it be in stocks but still be "sitting idle"? I'm assuming you mean it's in a brokerage account but just sitting in their money market waiting to be invested.

[QuarterMillionMan]

Why? Does the checking account pay a good interest rate? I'm guessing it doesn't. If you keep 10K in checking and move 70K to an Ally savings account (current rate 2.2%), you'll be earning about $130 EVERY MONTH on your balance, over $1,500/year plus compounding.

And when you say you have 40K in a "stock" account what does that mean exactly? How can it be in stocks but still be "sitting idle"? I'm assuming you mean it's in a brokerage account but just sitting in their money market waiting to be invested.

Good point! I really should move like you said $70K to Ally to get the 2.2%. I have a trust and it's humbug to make an amendment to my trust adding Ally or Capital One, etc. And/or removing my current bank accounts.

As for the "stock" account, yes it is more precisely a brokerage account where the uninvested funds are sitting idle in their money market waiting to be invested.

[QuarterMillionMan]

Actually, I am mistaken and won't need to change my trust. All that's need is to open a trust account with Ally which I intend to do. Having $130 a month slip away in interest has motivated me to open an account. However, I did run into a slight snafu. During the process it asked if my credit accounts are on freeze, which it is. I'll first need to unfreeze it before I can open the account. Thanks Disney Steve for getting me to take action.

[JBinKC]

If you are willing to shoulder the risks Robinhood now offers a checking account that pays 3%

[msomnipotent]

I get antsy if our checking account goes below $2,000 just because there seems to always be surprise bills between my daughter's school functions and teeth. It really shouldn't matter if it goes to zero because everything that is in there is meant to be spent and we don't earn interest. I have an emergency savings account in addition to the regular savings that I can transfer into checking, but recent events make me want to have a bigger cushion.

[HundredK]

I just tried opening an Ally account to move some of our savings, and what a nightmare that is turning out to be. I did the application online and it said I could call in or wait about a week for them to review my application. First I spent half an hour on hold on the phone, and then finally hung up when I got a chat representative. The chat representative couldn't tell me why it wasn't instantly opened unless he looked up the application, and said he could do that if I agreed to get a text message. That's fine. Then 10 minutes later said he can't send me a text message and he doesn't know why, but that now I have to call in for a verbal authorization. I explained to him I'd already spent half an hour on hold, and he recommended that I try calling in at 3am when it might not be as busy. So I am now on hold again and if anyone does ever answer the phone, I intend to withdraw our app for a new account. This is not the way to begin a relationship with a new bank.

[Jluke]

I just tried opening an Ally account to move some of our savings, and what a nightmare that is turning out to be. I did the application online and it said I could call in or wait about a week for them to review my application. First I spent half an hour on hold on the phone, and then finally hung up when I got a chat representative. The chat representative couldn't tell me why it wasn't instantly opened unless he looked up the application, and said he could do that if I agreed to get a text message. That's fine. Then 10 minutes later said he can't send me a text message and he doesn't know why, but that now I have to call in for a verbal authorization. I explained to him I'd already spent half an hour on hold, and he recommended that I try calling in at 3am when it might not be as busy. So I am now on hold again and if anyone does ever answer the phone, I intend to withdraw our app for a new account. This is not the way to begin a relationship with a new bank.

I saw this mentioned on bogleheads.

When calling, if you are prompted to press 1 for English or 2 for Spanish - select 2.

Chances are you will get an English speaking person.

Thought that was a clever idea. I haven’t had to try that yet though.

[disneysteve]

I just tried opening an Ally account to move some of our savings, and what a nightmare that is turning out to be.

I'm really sorry to hear that. I've found their website to be great and customer service to be excellent. It sounds like you encountered some sort of glitch. I had no trouble at all when I opened our account or when I later bought a CD. In fact, buying the CD literally took me less than 15 minutes. I was amazed. Even if another bank is paying more, I'd still go with Ally because of how quick and easy the process is.

[HundredK]

I'm really sorry to hear that. I've found their website to be great and customer service to be excellent. It sounds like you encountered some sort of glitch. I had no trouble at all when I opened our account or when I later bought a CD. In fact, buying the CD literally took me less than 15 minutes. I was amazed. Even if another bank is paying more, I'd still go with Ally because of how quick and easy the process is.

It's all good. I am glad I had this experience with them now; better now than after I give them a bunch of money. It took an additional hour, with a phone rep who was just a mess and only wanted to complain about how busy she was and who admitted their customer service isn't great. I'm still not sure they did what I asked and closed the account, but at least they don't have my transfer bank account info. I then proceeded to open a savings account at Cap1 (half the interest as Ally, more than where we have the money now, but great customer service, website, etc), and had zero problems and it was all done in about 5 minutes. I suppose that when you want to get the best interest rate for zero fees, you pay for that in lack of customer service, understaffing, etc. That's a valuable lesson learned. And hey, our money's earning a little more in interest now, so it's all good! I'm sure that it was a glitch, I would just never have any confidence in them after that experience.

[HundredK]

I saw this mentioned on bogleheads.

When calling, if you are prompted to press 1 for English or 2 for Spanish - select 2.

Chances are you will get an English speaking person.

Thought that was a clever idea. I haven’t had to try that yet though.

Awww, I wish I'd seen this earlier! Might have saved me a bunch of time!

[Jluke]

I then proceeded to open a savings account at Cap1 (half the interest as Ally...

CapOne money market for balances over $10,000 pays 2%.

They also have a 12 month CD paying 2.7% I believe.

something to think about in the future.

[disneysteve]

CapOne money market for balances over $10,000 pays 2%.

They also have a 12 month CD paying 2.7% I believe.

something to think about in the future.

Most people don’t have 10K in their savings account, which is why I always recommend Ally since they have no minimum to get the best (and only) rate. Unfortunately HundredK hit some system glitch when trying to sign up. I know it was simple when I did it and my daughter did it before me.