also NF...
I just noticed in your Siggy that your QS is now at $41k! When did you combine?? Thats awesome!
I just noticed in your Siggy that your QS is now at $41k! When did you combine?? Thats awesome!
@northface28 wrote:
I'm sorry, I'm not paying a bank to hold my money when banks like Schwab will have no minimum, pay me better interest on a checking acct than a BOA savings acct and no ATM fees all with no minimums.
Mathematically, you actually come out on top by keeping $300 in a BoA savings account for the extra $20/year.
The way I see it, there are two calculations to make: (1) the interest you would earn on $300 in a truly high yield savings account and (2) the gain you make by getting the extra $20 for having a BoA account
(1) I'll use a best-case scenario for savings account interest rate. Synchrony has among the highest I've seen lately (1.05%).
($300 BoA savings minimum) x 1.05% (other bank's savings APR) = $3.15 earned in a year
So, $3.15 is what you would earn on $300 over and beyond the standard $100 that comes with just meeting the BBR payment requirements.
(2) This one requires looking at both the laughably minuscule interest earned by the BoA savings account and the quarterly bonus from depositing rewards into their account.
($300 BoA savings minimum) x .01% (BoA savings APR) = 3 cents earned in a year (lol)
3 cents + $20 (yearly bonus from depositing BBR rewards into this account) = $20.03 earned in a year
That's a net gain of $16.88 per year. So, mathematically, it would actually be better to have the savings account. However, there are other considerations.
Pros
- I think BoA provides one login to view all accounts, so no additional login to manage.
- You earn $16.88 more per year
- By depositing rewards into the savings account, you avoid the issue of possibly ending up with a negative balance and needing to charge more (if you put something like Netflix on it). So, you can minimize the actual spending that needs to go on the card while maintaining the reward. Something I considered (and other members have mentioned this also) was charging a monthly bill that is more than $25. So, when the reward is credited, you always have a "payment" to make (ensuring that each quarter meets the reward requirement). By having a BoA account, I can make a small charge and not worry about the month that $25 is credited since it'll be deposited elsewhere.
Cons
- Opening another account gives you something else to manage/keep track of; I, personally, see that as a negative lol.
- As the amount of money kept in the BoA savings account increases, the net gain decreases. For example, if I decide to let it build to $400, the previously mentioned net of $16.88 is now smaller/not as much.
Then, above all of this, there is the question of whether an extra ~$17 per year is worth having another account. Maybe not, but at least we know what the numbers are, objectively.
