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Account reorganization, part I

August 21st, 2006 at 01:34 am

I feel like I need to do house cleaning regarding my various bank accounts--or at least re-evaluate if they're suiting my needs, and if I can do better.

So, in the next series of entries, I will analyze which accounts I have, which accounts I want/need/is best, and how to get from the former to the latter.

In conjunction with this, I'll also figure out how my money will navigate these accounts for minimum fees and maximum returns.

I'll just start off with what accounts I've got.

Currently, I have accounts with two banks: Bank of America, and ING. First, I shall discuss what types of accounts I have with each bank, look up and write down what their features are, and how I use them.

Bank of America

Regular checking account

I got this account four years ago for when I started college. At that time, it was still Fleet Bank. We chose it because it offered free checking to students at my college, and it was the only bank with an ATM on campus--a reasonable consideration at the time (but no longer relevant now).

This account gives me check writing, an ATM/debit card for cash withdrawals and check deposits, and online banking and bill pay. I use all of these features. BoA is also pretty ubiquitous, which is also convenient.

Here are the minimum requirements to avoid fees, copied from their website,
http://www.bankofamerica.com/deposits/checksave/index.cfm?...


- A $750 minimum daily balance in one checking account.
- A $1,500 minimum daily balance in one Regular Savings or Custom Savings account.
- A $5,000 minimum daily balance in one Money Market Savings account.
- A $5,000 average daily balance in checking linked with savings, Money Market Savings, CD or IRA accounts.

Regular savings account

The maintenance fee of $3/mo is waived with an automatic monthly transfer of $25 or more from your Bank of America checking account, or with a minimum daily balance of $300.

The interest rate is 0.5%, and the APY is 0.5% (erm, what's the difference between the two??). The interest is compounded daily, and awarded monthly.

I think we can all agree that the interest rate sucks. I'm seriously re-thinking this particular account.

Power Rewards Visa credit card

This is my first and only credit card. I didn't really want it, not after hearing all the horror stories about credit card debt, but after urging from both my family and alumni friends, I agreed to get one to work on my credit score.

BoA was, like, sending me card offers every other week (because they were imagining a "CLUELESS COLLEGE STUDENT JUST WAITING TO BE LURED INTO LIFELONG CREDIT CARD DEBT" stapled to my forehead, no doubt), so I just decided to bite, and show them who's boss. They knew how much money I had in my accounts, so I was essentially preapproved.

I have no idea what the interest rate is, but it doesn't matter because I use it for groceries, books, and online purchases, and I always pay it off every month. I forgot once, because I was paying it online the day the balance was due, and didn't realize it took a business day to process. Never did that again. Now I pay it on the first of each month, along with my rent. They're not making another penny off of me. Smile

Fixed Term IRAs

I have two fixed term Roth IRAs with BoA, again, opened for me by my father. One has a little over $6000 with an interest rate of 4.78% and an APY of 4.88608%. It matured last Friday. The other has a little over $2000, with an interest rate of 3.2%, and an APY of 3.25%. It matures next March.

I think that in order for these Roth IRAs to be fee-free, I need to maintain a minimum of $10,000 in my BoA account. But I'm not 100% sure.

ING

My father opened a joint account for/with me a few years back to take advantage of the high interest rate. He transferred a lot of my work-study savings from BoA into this account, as well as a lot of his own money. Because I can no longer distinguish which money is mine and which is his (unless I ask him for the tax returns that he did for me for the past four years or count up all of the debits to my BoA account from the past four years), so I just call that account the "Seed money" account.

Since I got my job, my paycheck has been direct deposited into ING (with the exception of three checks). I opened a subaccount called "Income" to hold them.

I also started subaccounts for the various goals I'm earmarking funds for--car, house, and emergency. And possibly Roth IRA.

All right, in the next installment, I'll critique these accounts, and figure out what I'd like to change.

1 Responses to “Account reorganization, part I”

  1. baselle Says:

    I'd find a bank with better rates for free checking, if that's possible. http://www.bankrate.com

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