Parking emergency funds

[bell]

Greetings all
The question is where. I got the impression cd's are not that popular any more and most are recommending money market accounts. But they also have term limits as well don't they? Why not get an ameritrade or scott trade account and park it in some bond or money market funds, that way its fully liquid?
My emergency fund right now has $10k in a cd that matures in a month and another $10k in japan in savings account.
What do you think?

 

[Melos]

Well, after, of course, having a decent emergency buffer in the old checking account, I have the bulk of my emergency money in a high yield online savings account. I'm getting 4.40% on it right now and it is readily available. I would think a money market would be the next logical step. I don't think I'd chose a CD as an emergency fund personally.

 

[katharina]

Well, after, of course, having a decent emergency buffer in the old checking account, I have the bulk of my emergency money in a high yield online savings account. I'm getting 4.40% on it right now and it is readily available. I would think a money market would be the next logical step. I don't think I'd chose a CD as an emergency fund personally.

Most of ours is in a MMA, too, with a rather high interest rate. Melos, we've looked for an online savings account. Is yours also available in brick and mortar? Every one we've checked out seems to have something we don't like about it.

 

[Melos]

No, it doesn't have branch locations. I'm with ING Direct and have been for several years. I've never had any problems.

 

[katharina]

No, it doesn't have branch locations. I'm with ING Direct and have been for several years. I've never had any problems.

Thank you for this! We've wanted to check them out for at least a year now and kept forgetting! So you order checks and everything online? What if you need to withdraw a large amount and don't have a branch office to walk into? How would they handle that? I assume they're FDIC insured? (Sorry for all the questions... we've had "check out ING" on the to-do list for soooo long!)

 

[Melos]

They are FDIC insured. The way ING works is that it is attached to a 'real world' checking account. ING is a savings account (they also do CDs and mortages). You transfer funds from your checking account into and out of ING - it takes about 2-3 business days.

I keep a certain amount of money in my checking account for regular expenses and bills. Everything else goes into my ING account and earns me that nice interest rate. It is true that you can not immediately access the money if there is an emergency, however.

Still, it is hard to beat 4.40% with no fees or minimum balance requirements.

 

[katharina]

They are FDIC insured. The way ING works is that it is attached to a 'real world' checking account. ING is a savings account (they also do CDs and mortages). You transfer funds from your checking account into and out of ING - it takes about 2-3 business days.

Thank you so much for taking the time to answer this for me. It sounds like something we'll be doing. Does that interest rate fluctuate often?

 

[katharina]

Okay, we talked about this and are probably going to go this route to try it out. One question came up... how do you make deposits? Does even that have to go through a checking account, or can you mail a check to them directly?

 

[Melos]

You can mail a check to them directly - made out to yourself of course. Or you can transfer money right from your checking account. You can even set up automatic savings plans where a certain amount is taken from your checking account at regular intervals. I did this for several months at one point and it worked very well.

 

[katharina]

You can mail a check to them directly - made out to yourself of course. Or you can transfer money right from your checking account. You can even set up automatic savings plans where a certain amount is taken from your checking account at regular intervals. I did this for several months at one point and it worked very well.

Well it's just sounding better and better. Thank you for taking the
time to answer my questions. We'll be opening an account... oh, for
joint, will we both need to send photocopies of licenses and stuff, or just
the main account holder? Or neither?