I am always prowling for the highest interest rate, but I also know who I am (so I think thus far in my life). I have 15 accounts (including CDs, brokerage, checking, savings and money markets). I am risk adverse. I am scared of the stock market for now. So, in my hunt, I have found an internet savings account that is paying 4.88% APY.
However, caveat emptor! There are so many bizarre intricacies with this account. One has to pay close attention. Wachovia has a savings account - calling it WAY2SAVE. This is not new, but in an effort to build up their reserves, they have begun to offer amazingly high rates.
There are numerous stipulations with this though. To begin, one must have a Wachovia checking account. Further, one can only ‘purposefully’ deposit $100.00 per month. One can set this up over the phone, by speaking to a bank representative or online. However, one cannot wantonly transfer money into this fund like other internet savings banks – yet one can transfer money out via the internet. To cancel the automatic savings plan, one must call or speak to some one at the bank.
There two other ways to add to this account (one dollar at a time). The first is by using your debit card. Each time one uses their debit card (from one’s Wachovia checking account); an extra dollar will be added and transferred to the WAY2SAVE account. This will show on the statement as a WAY2SAVE transfer and will aggregate the total transactions of the day (i.e. if you used your card three times, there will be one $3.00 transfer). Be careful, this is an amazingly easy way to overdraw one’s account!
The second way is by electronic transactions out of your checking account. Every time a student loan payment, car insurance or direct debit is taken out of your account, a dollar is removed from checking and moved into savings. Here is the “trick” for those crazy people like myself. If one were to transfer $0.01 from the checking account to, say, another online savings account, one would also transfer (automatically) one dollar to the high yield WAY2SAVE. While this is an unbelievable grind, it is one way to reap $4.88% - which isn’t half bad (one dollar at a time!).