Virtual Piggy Banks, Part Two

Adrienne Carter

My co-blogger Lauren wrote a couple of weeks ago about the advantages of the new Citibank Direct account--a high-yield savings account with an interest rate currently running at about 4.5%. Citibank enters an already crowded field with ING Direct (at 3.9%) and HSBC Direct (at 4.8% or so). She went on in our own humble blog to admit that despite the advantages she can't make the leap into the virtual banking world.

Unlike Lauren, I'll do anything online. Okay, get your minds out of the gutter. In any case, I try to avoid writing checks as much as possible. I paid my $10 for an NCAA basketball pool via my online account, and I probably haven't bought stamps in over a year. Heck, I don't even know what it costs to use the postal service anymore. I think the last time I used a stamp for a bill it was only 29 cents.

So when I read about the Citibank direct account, I signed right up. I already have a Citibank checking and online account so it took less than two minutes to set up. And now I actually stash all my money in that preferred savings account. When I need that money to pay a bill or for cash, I just switch it back to my checking account. On a funny side note: I practically had a heart attack this weekend when I looked up my balance--just $100 or so in checking--until i remembered i had transferred it all to the savings account. My hope is that I can earn a few extra bucks on my day-to-day spending money. We'll see.

But i'm still keeping my ING Direct account for my emergency cash, you know that 3 to 6 months of living expense you're suppose to keep in cash. (Really, I'm almost there) Even though it earns less money than the Citibank Direct account, I like that I can't get to it right away. It only takes a click to get immediate access to my Citibank Direct money, since it's linked to my checking account. But the ING money takes a few days to transfer. I need that sort of discipline when it comes to savings. Instant access for me is an instant disaster.

Before it's here, it's on the Bloomberg Terminal.