Better option than savings account for 6 month - 1 year

Ally Savings account is offering 1.15 interest rate right now.

quote:

---

LINK
FDIC backed 5% on upto 50k

---

Well that's mighty interesting.

quote:

---

FDIC backed 5% on up to 50k

---

Hmm. After reading the link, this sounds like it might be a good option for an emergency fund. As long as I can set it and forget it, and still know that the funds are reasonably accessible without any massive delays or foolishness, this might fit the bill.

I just need to better understand who/what Insight is. I have no experience with prepaid or debit cards.

Thanks for the heads up.

For a second I thought you were saying you had 50k in a savings account for a 1 year old.

quote:

---

How are they able to afford offering a rate like that today?

---

Insight Fees

Their fee schedule answers your question. Just like with rewards credit cards, as soon as you fall into the fee (or interest) trap, you're trying to dig out of a hole.

But looking at this and checking various sites, you can make this work without much effort. I'd say that the average prepaid debit card customer isn't going to be loading up the savings account side of this offer, nor will they be able to easily avoid the fees (for damn near everything). Most of them are probably paycheck-to-paycheck. You have to transfer the money out of savings and back to the card (losing the interest offer) in order to use the card for purchases. And the most per card that the company is risking is $250/yr., assuming a customer maxes out their savings to $5,000 and doesn't touch it. IMO, it's a tease for those people. If they had $5 grand, they probably wouldn't be using the service anyway. But for what they do have, this encourages them to keep their money with Insight. That way, those fees can accumulate and they can easily get the interest back and then some. It's the same reason that card issuers offer fat bonuses if you spend $X within the first two or three months.

And by limiting this to $5,000/card (4 cards per person), in case any baller types do show up, the most they'll get is a grand a year.

I'm not a baller type, but I do believe that I will help myself to that $1,000/yr. in interest. Hey, that's a fresh set of racing rubber.

Once you read through what the Financial Panther guy (and several others online) described, it's actually pretty simple. So long, Ally and Cap One. Nice knowin' ya.

Thanks again, FunroePete.