Jun 24 2008

A savings account as a ‘waiting room’

This is going to be such a “duh” idea, but I hadn’t really thought of it until now, so I’m going to share it with you.

Our emergency savings is in ING Direct, where it earns 3 percent APY.

We have a brick & mortar bank which we use for our debit card purchases, depositing checks, and getting endless rolls of quarters to do laundry.

Our savings account there earns a whopping .3 percent interest. Yeah. Not much.

A few times per month, I electronically transfer some money from our brick & mortar bank to our ING account.

It takes about five to seven business days for the money to be accessible in our ING account. For awhile, that money is just in limbo.

Before I transfer the money, it just sits available in our checking account where it can be spent if I’m not careful.

Since we’re so stinkin’ close to finishing our six-month emergency fund, I really want to just finish it as fast as possible.

Our checking accounts are linked to a savings account, which we can access online. I can put money in that savings account, serving as a holding area or waiting room, until I am ready to transfer it to ING.

I can be more aggressive and put more money in that low-interest savings account knowing that I do have the option of transferring some back to our checking account immediately, if we needed to.

Because once I send it to our real emergency fund, it’s there to stay unless we have a true emergency.

I won’t earn much interest on that money while it’s waiting around. But, it’ll be harder for me to spend if it’s sitting there instead of in my checking account, and I might end up with more to save each month.



5 Responses to “A savings account as a ‘waiting room’”

  1. My husband’s paycheck is directly deposited into ING for savings. This saves us the 5-7 days of transfer time.

    We decided to sign up for an ING checking account, so that, in the event of a Real Emergency where we need funds now, we have a debit card linked to the account with our Emergency Fund, and the funds we need can be transferred quickly, without the days-log waiting period. Also, we keep other savings “funds” in the checking account- our Vacation fund and our Gift fund, for example- so the money is being saved but isn’t as readily accessible as it would be in our brick-and-mortar bank. The ING debit card is used expressedly for specific Vacation or Gift purchases- and we don’t have to transfer the money beforehand (especially nice for gift shopping)

    Joanna’s last blog post..People helping people

  2. We have an ING checking/debit account as well.

    Haven’t quite taken the step to have Shane’s check direct deposited there. I don’t know if we’ll move toward that someday, or if we’ll keep things as they are.

    I love the subaccount feature within ING! It makes saving for various things much easier.

  3. Oh wow…I’ve been doing this for years. Though I do it because if it’s in the checking account it’s fair game and too easy to spend. :)

    SO glad you put your EC widget back up! =D

    castocreations’s last blog post..I’m an Old Fart

  4. Great thinking!

  5. To counter the not-saved-yet, I once was transferring the saved money straight to the “waiting room” savings account. I was amazed how fast it added up!

    I used the amount on the bottom of the receipt telling me how much I had saved it total coupons. Easy, and no math.

    And I agree completely on the easy ING sub-accounts!

Sorry, comments for this entry are closed at this time.


Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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