Best plan to open up a savings account?

It's pointless to invest in a savings account. Invest into some mutual funds. I would go really conservative if I were and you can look at it as a savings.

Eta: but a savings account is 3-6 months total expenses. So maybe 9000$-12000 for you?

you're 26, you have the ability to be more aggressive than a savings plan

capital one 360 is giving 0.75% with a savings account right now.. it's shitty but it's pretty high compared to whatever you'll find at your bank

like most threads on this board, my answer is Roth IRA

I use Capital One 360 (old ING Direct), and a Sharebuilder account, along with a "high" interest checking account. All of these are through Capital One, so it's easy to manage and transfer.

I'd suggest having a liquid amount of money available in checking/savings for any immediate emergencies (ie 1-3 months). Then you can be more aggressive with a full savings/emergency fund. CapOne360 will give you 0.75%, and SB will give you options to invest in stocks, funds, and ETFs for a relatively low expense ($4 for auto investments, and coupons are easy to find).

You could also set up a Roth IRA in addition to your 403(b). This could serve as another emergency source, but should be a last resort. There is no penalty for withdrawal of contributions, but funds can only be replaced at the annual limit. Withdrawal of earnings are penalized unless a "qualified" distribution.

quote:

---

Can I do this on top on my 403(b) plan and as a public employee? Also, is there a penalty for early withdrawel? I want an emergnecy fund basically, but I want that money generating something...thanks for the input!

---

Yes, because contributions are done with after tax dollars.

You can contribute up to 5k a year, and can withdraw whatever you put in tax free, hassle free, no questions asked. Problems only emerge if you attempt to take earnings, although you can withdraw up to 10k in earnings (tax and penalty free) to pay for the down payment of your first house.

As you fall in the 25% tax bracket, it is your best bet. You prob will want to only put money in a taxable account after you are baller enough to hit the limits on all forms of IRA accounts.