Please help me convince my Dad

[rerod]

My Dad has over 300K invested in a US banks savings account which earns around 2.5 %. Iv been trying to convince him to open a online savings account, but he prefers his brick and mortar bank because that's what he has always used, and his "life is complicated enough". I want to urge him to open at least 2 other savings accounts since recently Iv learned that less than 1/3 of his money is FDIC insured.

Which online banks are the most reputable with good costumer service. Have user friendly web sites, and still have decent interest rates? He, like me, wants to park his money and wont be looking for the highest rates.

I will send him a link to this topic so he can read your suggestions.

Thanks for your time.

[safari]

I have an account with GMAC Bank, and never had any problems. They are currently paying 5.3%, which is 2.8% more than your dad's bank. With $300K balance, he could earn $8,400 more a year with GMAC. They also offer checkwriting and they mail you bank statements every month, so it's very similar to the brick and mortar bank. Your dad won't even need to login to their website in order to access his money. He can just write a check to himself and deposit it into his checking account. He can also use the ATM card that they provide; they don't charge any ATM fees and even reimburse the fees charged by the ATM owner up to $6 a month. When I called them with a question, their customer service was very friendly and helpful.

[kimiko]

He sounds like my dad. I think convincing him to park his money in CDs would be more feasible.

[tinapbeana]

well, pointing out to him that having all his money in one account and therefore not having FDIC insurance on all of it is probably your best track. at the very least, he should consider having 100k in three separate banks. as many have mentioned in other threads, it's not that anyone REALLY expects to need the FDIC insurance, but it's nice to know it's there.

since he has a relatively large amount available, talk to him and see if he'd be willing to do a test run with a small sum with one online bank, just to see what he thinks of it. if he doesn't like it, he can close the account.

[bigsaver]

He can more than double what he is getting by putting the money in FNBOdirect.com

Actually, he shoud keep the amount below $100k for FDIC insurance.

[scfr]

He might like Stearns Bank on-line (www.stearnsmoneymarket). They might not have the absolutely highest rates, but their rates are excellent and you really get the brick & mortar bank feel from them:

They are located in Minnesota, so they are Midwesterners like your dad (assuming he also lives in Iowa). Perhaps he could even go over to one of their branches to open up the account?

Live operators answer the phone each time you call (none of those annoying automated answering systems), and you'll probably end up speaking to the same people over & over.

They send out holiday greeting cards, which is a very "homey" touch. They also send you their annual report each year.

They have a 5-star (highest) Bankrate Safe & Sound rating.

Their rates don't change a lot; in other words, they stay pretty high rather than going up & down.

Their transfer times (time it takes to move from their bank to your primary bank) are the best.

[PrincessPerky]

The personal touch is important to many..and honestly when you have more than enough money...why not waste some finding the personal touch ... a touch that cannot come from a pure online account.

Though I would share the wealth to 3 or more for the fdic insurance level.
prolly not the advice you wanted....

[disneysteve]

Why not just find a bricks and mortar bank with a better rate? Also, would he consider buying some CDs? You should be able to find accounts and CDs in the 5.25-5.4% range without going online.

Take a look at AmTrustdirect.com. That is actually Ohio Savings Bank. They are paying 5.36%. Or Countrywide.com. They are paying 5.4% on balances of 50K or more.

[vsjhoc]

I have an account with GMAC Bank, and never had any problems.

Ditto. I've had my account for 5 years.

[disneysteve]

If you can't convince him any other way, show him this:

$300,000 at 2.5% for one year grows to $307,586.

$300,000 at 5.4% for one year grows to $316,607.

If an extra $9,000/year doesn't convince him, he may need professional help.

[Scanner]

One may need to ask why he has that amount of dough in a cash vehicle anyway.

How old is your father?

I'd max out my cash vehicle at $100,000 and place the remaining $200,000 in insured muni bonds if it were me.

[rerod]

Thanks everyone..

My dad is 80 years old. Money isnt a problem for him. He saves more than his pension pays. His main concerns are his family,80 acer farm ,cattle and horses, about in that order.

[disneysteve]

My dad is 80 years old. Money isnt a problem for him. He saves more than his pension pays. His main concerns are his family,80 acer farm ,cattle and horses, about in that order.

I can relate. My mom is the same way. She's 76 and has more money than she could ever spend as her needs are simple. Especially since selling her house a few months ago and moving to a senior apartment complex, her monthly income is now hundreds more than her expenses. However, she still sought out the best place to keep her cash, recognizing the benefit of higher interest. We split her house proceeds between Countrywide Bank (5.4) and a CD at World Savings (5.6%). Even though she doesn't need the money, there's no reason to pass up the best rates.

[Aleta]

I think that the greats are great now, but for someone wanting the income - it's good to lock in the rates in a CD. CD rates are good now and we don't know when the fed will lower rates which has been hinted and then that will affect future CD rates. If I needed the money for 5 years, I would ladder it. 5% and above isn't a bad rate since some retirees would like to receive between 6 -8% on their investments. You also don't have to worry about losing it in the market.

[Ima saver]

Well, I like brick and mortor banks also. I have a local bank, paying 5.25 on amounts over $50,000. It is the Appalachian Community bank in Blairsville, Ga.
Then I went to another local bank, Cadence, who gave me 5.75 on a jumbo c.d.
When I went to the third local bank and told the president what I was getting, he gave me a jumbo c.d. at 5.5% even tho the highest they were paying there is 5%. (never hurts to ask)
Now, I am going back to applachian bank and open two more money market accounts paying 5.25%. One in my husband name only and one in my name only.
That way I will have 5 seperate accounts of $100,000 all with fdic insurance.