Saturday, January 26, 2008


Today I’m shopping, but hopefully this benefit the budget. The recent rate cuts by the fed have had a negative impact on my favorite savings accounts and it’s time to shop for a new rate.

These are the rate changes reflected on my account:
Nov 2006.......................4.50%
Sept 19, 2007................4.30%
Nov 1, 2007...................4.20%
Dec 13, 2007.................4.10%
Jan 23, 2007.................3.65%

Now don’t get me wrong, I love ING. I’ve been with them since 2001, had amazing customer service, and watched my money grow. The problem has to do with ~11,000 of my debt, my car loan. In late 2006 my father, who I hadn’t seen since 2000, came for a visit. He lived on the opposite coast for most of my childhood and moved back to Africa when I was in high school.

In addition to a great long weekend he gave me 10,000 to buy a car. That money immediately made its way to ING, growing happily. After much thought I decided on a used car (one year old) and a warranty. I could have just bought a car for 10,000. When I took my feelings about the environment and gas prices into account I decided that it was worth the extra money to buy something with good fuel economy. A year later I love how long I can go between filling up.

My mom, a huge worrier, much preferred the idea of me buying a newer car. Over my two months of research she made her opinion know and eventually put her money where her mouth was. I was offered three interest rates, each based on the amount of money I put down. She gave me enough to lock in a 3.9 percent APR for the car loan.

For the past year the funds from my dad have been in an ING account (nicknamed car money). Until last September the car money was earning ~.60% more interest than what the dealership was charging me. So I was actually earning money by not paying more than I had to each month. I was unhappy when the margin narrowed over the last few months. Now that it is -.25% I’ve decided I need to move the money somewhere else. I’ll be shopping the rate today to see if I can find another online account that will pay me more.

I’m looking for:
  • Interest above 3.9%
  • No minimum balance
  • Monthly withdrawals allowed

I may also consider a cd for half of the funds to protect against any further rate cuts.

Wish me luck!

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