Emergency Fund Local or Online

**klarose** · 11-15-2013, 01:23 PM

I wanted to add that I do keep a $500 buffer in my checking account for small "emergencies." So I wouldn't be completely without cash.

**Petunia 100** · 11-15-2013, 01:47 PM

I keep my emergency fund, my vacation fund, and my "curveball" fund at Barclay's. It is an online bank, and the rate is currently .90%. ING (now called Capital One 360) is a good choice, too.

It is very easy to transfer money back and forth, it just takes a few days. So, you do want to keep a buffer in your regular bank (as you say you already do).

**klarose** · 11-15-2013, 01:54 PM

Is a $500 buffer enough? Husband also has a personal checking account with a small buffer.

Should I close the savings account at the mortar bank? Is there any downside to closing a savings account? I don't really like their business, they have been rude to me in the past. The good part is that I can cash my checks there since I have an "account" there. But Husbands checking is there as well.

**Petunia 100** · 11-15-2013, 02:10 PM

Originally posted by klarose View Post

Is a $500 buffer enough? Husband also has a personal checking account with a small buffer.

Should I close the savings account at the mortar bank? Is there any downside to closing a savings account? I don't really like their business, they have been rude to me in the past. The good part is that I can cash my checks there since I have an "account" there. But Husbands checking is there as well.

The size of a big enough buffer is going to vary from person to person. Do you have a credit card you could use immediately while waiting for the transfer from savings? If yes, then $500 is probably plenty.

Closing a savings account won't hurt your credit score, if that is your concern. If you think it may be convenient to cash checks at that particular bank, that is a reason to keep the savings account open.

Is your primary bank (where you have your checking account) not conveniently located for you? Perhaps keeping your checking account at a bank which is conveniently located would eliminate the need to cash checks at the bank where your savings is now.

**MonkeyMama** · 11-15-2013, 02:17 PM

IT doesn't make any difference to me. It just depends if you have any personal "brick and mortar" needs. A bank is a bank - should be FDIC insured.

The online bank with more long-term higher interest rate (not just a bait and switch rate) is Ally. Right now, their money marking account (with checking) is the same interest rate as their online savings account. This gives you immediate access to money if you need it.

I am not aware of any disadvantage to closing a savings account. I close under-performing savings accounts all the time.

Just a tip: I consider my checking account as a conduit for all my financial transactions. Every single investment and savings account I have is set up to pull money from this account. Just to throw out another way to do things, so you don't have to worry about deposit amenities at each place you bank or invest at. I've never come across a financial institution where I could not just transfer funds from primary checking account? This checking account has offered "online deposits" for many years, and we also have a local branch for cash deposits, so that is where we put all our deposits.

**snafu** · 11-15-2013, 03:38 PM

I suggest you do a quick check of other Brick & Mortar banks, on-line banks and Credit Unions that are convenient to use with low rates for the services you use that also support on line deposits and mint.com. I mentioned this because since the downturn the banks have been increasing fees in a major way. Items that were free, now have fees. While reviewing on-line banks, find out details about checking services and paying bills on-line.

You don't need to maintain an account just because your mortgage is there, you can arrange automatic transfer with a few computer clicks. Like Monkey Mama many of us use a primary account as a conduit to switch/transfer money to other accounts, to bills, to savings easy peasy.

**klarose** · 11-17-2013, 05:46 AM

My checking account bank is conveniently located. The other bank is too though. Separate ends of town.

But both of the banks have other "chain banks" located in different towns that we frequently go to that are 30+ miles away. So if we are going some where, it's nice to have more options about stopping on the way and cashing a check, or giving money out of the atm.

I think for the time being I will keep the savings account at the bank, and just start putting anything I have from here on out into an online account.

Currently I am not on husbands account because I still need to get my name changed. After I get on his account, then I can cancel the savings account, and I will still be able to use their services.

Thanks guys!

Right now I'm trying to decide between Ally & Capital One 360 (ING).

Which one do you like better?

**MonkeyMama** · 11-17-2013, 06:33 AM

I'd choose Ally since Capital One is a "big bank". I think over the long run you'd probably be unhappy with their fees and policies. For the short run, they are desperate to keep ING customers happy (after taking over ING).

On the flip side, Capital One makes it easy peasy to close their accounts. Which one has the higher interest rate?

Whatever you do, just keep an eye on rates on the long run and don't get stuck with a low interest rate down the road because you aren't paying attention. I am sure either is fine for right now.

**bUU** · 11-17-2013, 09:36 AM

Originally posted by MonkeyMama View Post

I'd choose Ally since Capital One is a "big bank".

Ally Bank is majority owned by the US government. I'm not sure that that's better.

Originally posted by MonkeyMama View Post

I think over the long run you'd probably be unhappy with their fees and policies. For the short run, they are desperate to keep ING customers happy (after taking over ING).

One of the fundamental characteristics of online bank customers is the willingness to just pick up and switch to another bank if the bank they're currently with turns sour. I'd be surprised if Capital One does anything to make its former ING Direct customers leave en masse.

**sblatner** · 11-17-2013, 01:49 PM

I have our checking account at a brick and mortar bank along with a small savings account - I consider it a holding account for extra cash until I need it. I recently moved the bulk of our savings (EF and college savings) to Barclays to get the .9% interest. Much better than the .15% I was getting at the other bank.

**Jerry91** · 11-17-2013, 09:09 PM

In today's market, online banking is quite common. So, in my opinion, it may not be a bad idea to keep your savings or emergency fund in an online bank.

**klarose** · 11-18-2013, 06:06 AM

One more question.

I am hopefully going to get my named changed this Thursday on my SS card. But after than I'l have to also get a new drivers license and all that hoopla.

Is it okay if I go ahead and set up and ally account now? Is it hard to change the name on the account later? I'm unsure if I should wait a few weeks until I'm all changed, or just do it now and change the name later.

**feh** · 11-18-2013, 06:38 AM

Our checking account is at our local credit union. Our savings/EF is at Ally.

**klarose** · 11-18-2013, 06:47 AM

After talking to both SS and Ally. I think I'm just going to wait until I get my new SS card. It should only take a week or so. And I won't have the money for the account until Monday anyway.

That will save me the trouble of a lot more work.

I also think I am going to go with Ally's Money Market account. That way I can write checks if I need to. So that should solve any problems about access to the money. Thanks for everyone's help!

Emergency Fund Local or Online