Opening a high yield savings account was one of my better financial decisions. At first, I was able to keep savings liquid yet earn interest rates comparable to those local banks offered for certificates of deposit. When the interest rates began tanking in response to the Fed's rate cuts, I moved just under two thirds of my savings into a seven month cd. Now that rates have dropped further, I'm debating how much of a rate chaser I want to become.
I like HSBC. Their phone support when I managed to lock myself out of my account was superb, and I appreciate being able to withdraw money from an ATM even though I'll probably never do so. I'm tempted to stick with them simply because doing so requires no effort.
There are better rates out there right now, but I've done the math and am not sure it's worth moving my liquid savings around to make an extra $25 a year. Does that make me a lazy and irresponsible slacker? Maintaining eighteen different bank accounts and trying to make sure I eke out every possible penny of interest doesn't sound like an enjoyable or efficient use of my time. I'll probably move a little more money into certificates to lock in rates, but I want to minimize hassles. There are enough in life already.
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It certainly wouldn't be efficient to have that many accounts and it also wouldn't be a good idea to tie up all your savings.
I prefer to consider a savings account a "set it and forget it" kind of deal. Unless things get really bad, like dropping from 5% to 1%, minor fluctuations aren't worth worrying about.
I have three savings accounts. One at the same bank as my checking, one at a credit union with a great rate, and one at the credit union where I hold my mortgage. I also have 1 CD at the 2nd credit union.
Here's my logic for the breakdown:
* The savings account at the bank is what I call my "money collector." Since it's attached to my checking account, I can easily push money to it at any time. I generally empty out this account when it gets over $200 and send it off to the high-rate credit union.
* The high-rate credit union is far away with no online access. If I need to push money to it or pull money out, I have to write a letter. In order to minimize deposit transactions, I use that first savings account to hold my money before a push.
* The 2nd credit union allows for direct deposit, so I have my employer put just enough in that account every month to pay my mortgage. This way I can save yet another stamp for mailing in my payment.
Part of the reason I've left most of my money in the Emigrant Direct account, despite dropping rates, is that it's not dropping exponentially. If it's not a substantial amount that you're losing out on, I don't think there's anything wrong with your decision to stick with the HSBC account.
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