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See ya, HSBC!

February 7, 2008

I have been using two online savings accounts for about a year, ING and HSBC. Both have been dropping rates like crazy, and neither are very competitive anymore. There simply are better options out there. I’m not going to stand for this anymore!

I did a little research, and decided to switch to the Vanguard Prime Money Market Fund to house the majority of my savings. It currently has a yield of 4.22%. While are HYSAs and CDs out there with better rates, they aren’t consistently higher. I’m not going to rate chase. This is a solid account that has continually been competitive to HYSA. I first did the analysis last summer, and the tax free money market account actually came out ahead of any savings account. Try out this awesome calculator to compare. These days, the taxable account is a better deal for me. I was wavering between EmigrantDirect (solid reviews, solid rates) and Vanguard, and honestly the final decision was sort of impulsive. I figure I’ll eventually roll over my 401k into an IRA there, and move my Roth from Fidelity… So it will simplify my finances in the long run.

I funded it with $4000 to start, about half of my HSBC balance. I already have a lot of stuff linked up with my HSBC account, so I’m waiting to completely pull the plug on it… But it will happen. I already set up my Vanguard account for direct deposit and will be sending my tax refund there as well.

What about ING? Well I’m not too impressed with them either, but they will be staying around. I’ll be using them for some shorter term savings (car insurance, travel fund) and for now, for my student loan payback account and new car fund. Why? I like the subaccounts. Yeah, I can do it in excel. Whatever, I don’t want to. For such small balances I’m not as concerned about getting the best rate.

Why else? The $10 referral bonuses and the sweepstakes I am entered in for using direct deposit. So it’s lame to trade interest rates for sweepstakes… but whatever, you’ll be jealous when I win $30,000!

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4 Comments leave one →
  1. MEG permalink
    February 7, 2008 1:47 pm

    I’ve had the Vanguard Prime MM for years and I LOVE it. Money Magazine lists the savings accounts, money markets, and CD’s with the highest rates each month, and VG PMM is ALWAYS in the top five with regard to rates.

    Plus they are a very reputable, established company. I’m kind of sick of dealing with EmigrantDirect and ING to be honest. Their websites and marketing are hokey and sales-pitchy.

  2. E.C. permalink
    February 8, 2008 6:01 am

    I’m intrigued by the Vanguard money market funds, but I still have certain qualms about keeping my emergency funds in anything that isn’t FDIC insured, even if the risk of losing principal is low.

    By the way, your link to the Vanguard site leads straight to a prompt to log in rather than to information about the fund.

  3. SJean permalink
    February 8, 2008 8:18 am

    Thanks, i think i fixed it!

    I understand the FDIC concern. I”m not squeamish about that kind of thing and have a lot of trust in vanguard and money market funds in general, but I can understand having concerns

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