Other people said I should use bond funds for part of my down payment fund, especially considering that it was up to almost $80k by the time I finally closed on my place. But I liked how simple it was to get the money out of the savings accounts and it was great to watch it get more interest each month as I added to the account!
jmyers wrote:Thanks for the advice. Why did you choose Ally for your savings account? Do they typically have better interest rates? Also, what do you know about USAA and how they compare in this aspect? I am in the military and am planning to switch to USAA as my primary bank.
I know nothing about USAA. I was originally with ING Direct, but I jumped ship to Ally because the interest rates were better. For the amount that I saved up, I was getting quite a decent chunk in interest each month, so finding somewhere with a good interest rate wasn't a bad plan. There are other places that have better interest rates now, but I don't have that much money in cash savings anymore.
Looks like USAA's savings account rate maxes out at 0.30%: https://www.usaa.com/inet/pages/bank_sa ... nk_savings
Ally is currently 0.84%: http://www.ally.com/bank/online-savings ... tabs=rates
Looks like Barclays and EverBank have slightly higher rates (~1%) right now.
I highly recommend switching to USAA for a checking account. Their customer service is excellent, they are experienced with military matters (preparing for a deployment was a single phone call), they allow mobile check deposits, and their insurance rates were far cheaper than anywhere else that we could find.
However, we keep our emergency fund at Ally. The number 1 reason was to get the higher interest rate (almost 3 times higher than USAA). After moving our emergency fund to Ally, we also appreciated having the physical separation between the accounts. We have dipped into our emergency fund once or twice, and the easiest way we found to transfer money was to write a check out of Ally and deposit it with USAA's mobile depositing; the whole process took about two minutes.
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