Wednesday, September 1, 2010

In < 3 with a bank

Dear Readers,

I am in love.

A few weeks ago, I saw an ad for Danversbank at the Hynes stop on the Green Line. 4% interest on a checking account! I'm sorry? I had come to believe that 4% was an antique and sepia toned legend. A brief and sweet moment of history back in 2007 when I opened an ING account, fed it $40 a week, and watched it blossom. Then 4% shriveled to to 3%. Then 2.5%. Now it is 1.1%.

So guess where my money is going.

A crew of scrappy, small, but competitive banks have started offering high interest checking accounts to the tune of 2, 3, or even 4%. Danversbank and Cambridge Savings are two banks local to the Boston area, but there are surprisingly many other options out there. In general you need to jump through a few hoops to get the rate (Danversbank wants me to complete 12 debit transactions each month, set up direct deposit or monthly ACH transanctions, and sign up for online banking), but once you complete their terms you are rewarded with that juicy interest rate. And if some months I don't meet the requirements for whatever reason, Danversbank will pay me .25% interest instead. Which is .25% more than Sovereign Bank ever paid me for the privilege of babysitting my cash.

Here are some other great things about this high interest checking phenomenon:
  • I no longer care when my checks are cashed. If my landlord wishes to hang on to my $ until next year, that's fine, because I'm earning interest on it.
  • I no longer worry about bouncing checks, because I'm keeping a lot more in my checking account rather than try to keep it earning interest in a savings account until the last possible second. You can keep up to $25,000 in the Danversbank account and still earn the 4%.
  • I have written out all of my bills for the month, including quarterly taxes, and stuck them into envelopes which are sitting on my desk. I have written on my calendar the last possible day when I'll need to mail them. I will hang onto them until that day, and earn interest until that day.
  • And not so relevant to finances, but a nice perk: The Danversbank vestibule is air conditioned all the time. Wasteful? Perhaps. But a lovely touch when it's still 94 degrees at 7:30pm.

Yes folks, checking accounts are sexy again.

1 comment:

  1. I'm a bit behind on the blog and I just read this post and it's fabulous! If it wasn't 11:59pm on a Sunday before a holiday, I would be enroute to the bank right now...