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Eloan or -----?

October 23rd, 2006 at 02:05 pm

Eloan has jumped to the forefront of internet savings rates, now offering 5.5% with a minimal balance of $5000. I have had my savings sitting in IngDirect for the past 5 years and now am sad to see how far behind they're lagging (only earning about 4.3%). I'm tempted to open this new savings account....but I'm hesitant because what if this starts the vicious cycle where I am constantly opening a new savings account as new banks start competing to raise their interest rates? Would I be better off putting money into a CD- something that offers a definite future deadline to decide where to allocate my savings, taking into consideration my changing financial needs?

Help! I also don't want to become some crazy person, worrying too much about the "best" place for my money and keeping a frantic eagle eye on interest rates...

2 Responses to “Eloan or -----?”

  1. Ima saver Says:

    I agree, and that is why I have kept most of my money local at 5.25% When I sell my spec house I am thinking of opening a c.d. at 5.8% with some of the money.

  2. baselle Says:

    Time to shop for rates - Ima saver's lucky...the brick and mortar banks around in WA state are in various flavors of 4%. And if interest rates go up and you're locked into a CD, its "grrr time" again.

    Skipping around for rates will depend on how much money we are talking about. I figure that if you have about or less than $1500 in ING, its about 10$ difference in interest between Emigrant and ING...which you can make up if someone accepts your ING invite, if still you have ING invites.

    Also think outside the box a bit - 4 wk T-bills at auction lately are paying between 4.6 - 5.1%, and you only pay federal taxes on them. If you are in a state with income tax, that might be another option. You can buy them at treasurydirect.gov, and set them up so that you can buy them weekly and the next T-bill is bought from the T-bill before.

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