Interest rates & certificates of deposit

I currently have my emergency fund in an online bank called UFB Direct. I’ve called and emailed them with questions in the past, and they have always responded promptly and personally. No form letters from them! The people I’ve talked to here actually cared. So I’m a big fan of that. The only thing is, their interest rate is not the greatest. It’s currently at 2.5% APY. Better than most brick & mortar banks, that’s for sure, but not as good as some other online banks.

The reason the bulk of my money is there though, despite the lower interest rate, is because they allow you to designate beneficiaries on your accounts. Because of how my estate is set up, this is critical. Most high-yield savings accounts do not allow this, or at least they didn’t when I was looking for one that did, and I checked a LOT of them. My choices were fairly limited.

But I recently discovered that ING now allows you to open accounts in the name of a living trust (which I have). I’m not sure when they started allowing this, but I noticed it when I went to open yet another “sub account” there this month. AND they have higher rates — currently ranging from 3% APY for a savings account to 4.5% for an 18 month certificate of deposit. So, choices!

I’m not normally a rate chaser, but there’s a big difference between that and 2.5%. I’m considering putting part of my emergency fund into an 12-month CD that would earn 4%. Penalties on early withdrawal for 12 month CDs at ING are 3 months’ worth of interest. If I’ve figured this right, on $10,000 that would amount to a potential penalty of $100 if I needed to use it before the term was up. Opening a number of smaller CDs instead would reduce the chances of me needing to withdraw the entire amount before the term was up. Plus I would not put the entire amount into CDs, so I would still have money available outside of the CDs for emergencies. At the very least I now have more higher-yield options to consider than I did before. I’m really happy about ING doing this.

See Also

(If you’d like a referral for ING, please see my ING referrals page.)

View Comment (1)

Leave a Reply

Your email address will not be published.

© 2023 BLUNTMONEY. All Rights Reserved | Disclaimer

Scroll To Top
Skip to content