Tuesday, October 31, 2006

I Couldn't Resist...

...opening up a savings account @ E-Loan.com. I've been debating it ever since I heard their interest rate was boosted to 5.50% last month. That rate is better than many of the CD's out there. We have several online bank accounts already, so I didn't want the hassel of opening another one. Plus I've been thinking about testing the waters with T-bills. But calculating the rate and dollar difference between a possible E-loan account and our exsisting Emigrant account, I couldn't resist. That's a .45% difference between 5.05% Emigrant and 5.50% E-loan, or $180 annually. And seeing that we save every month, that figure will only rise. The only thing I'm worried about now is what the Federal Reserve will do with the interest rates in the coming months. With the past several decisions pause on the interest rate, and word of inflation on the rise, I'm not sure where they're heading. And whatever happens, will E-loan stay ahead of the pack? We'll just have to wait and see....

7 comments:

Sun said...

I am also considering an E-loan account because of the big rate advantage over EmigrantDirect and HSBC. The reason I didn't open it right away is that I don't know how long the rate will stay at 5.50%. We have seen EmigrantDirect cut back its rate last month, so one day E-lona may do the same once it attracts enough deposit. T-Bill may be a good idea to park short-term cash.

John said...

T-bills seem like they take a little more work than online bank accounts. Don't they involve having to buy and sell t-bills, and aren't there times where the money in the account from the sold t-bill sits and doesn't collect interest?

Sun said...

If you have an account with TreasuryDirect already, then buy T-bill is very easy and since you're dealing with Treasury directly, there's no other fees involved.

Since the bills are sold at discount rate, you will get the face value when the bill mature. Since $1000 is the minimum amount, TreasuryDirect will take, for example, $995 from your bank account and return you $1000 four weeks later and you get $5 of interests. Next time, TreasryDirect will again draw less than $1000 from your account and give back $1000. However, you do have to link TreasuryDirect with your interest-paying account, otherwise that $5 will not earn you any interest.

You can find how to by T-bill from here

GolbGuru said...

5.5% is nice...I am going to give it a thought. What are your thoughts on their website facilities in general? Is it a pain to manage stuff or things are smooth and nice?

John said...

The facilities seem fine. Nothing out of the ordinary. The login consists of the ID and password on two separate pages. The interface is plain and simple, easy to manage your account. The only feature I would like to have is to view my interest accumulation daily.

bryan said...

if you already have multiple online savings accounts/money markets, i wouldnt worry about the eloan rates going that much lower. if they happen to fall below a competitor, just transfer your money around and bank with the leader. thats how i do it. i have switched from ING to gmacbank.com to eloan.com recently. the extra .25% here and there is worth a few minutes of my time to make the transfers.

John said...

I actually planned on doing the same thing. As of late there hasn't been much competition among them. But I'm ready!