Saturday, February 14, 2009

Savings accounts & rate chasing

It has been getting more challenging to earn a decent interest rate on savings. So I've had to use more creative approaches to earn interest on the promotional 0% money that I borrowed from my credit cards.

A number of smaller banks have recently started "Rewards checking accounts", the best of which pay interest of 6% on balances up to $25,000. The catch is that they require typically 10 to 12 debit card transactions per month, in order to get the high interest rate and no fees. I've recently opened a bunch of these accounts, and now I find that I need to make about 52 debit card transactions per month. To do this, I've been paying the phone bill on-line every weekday, $1.01 at a time. That gets me about 20 transactions. Pumping self-serve gas a dollar at a time is also good; this is best done when the cash register is staffed by an apathetic looking teenager, rather than someone who looks like they could be the actual owner of the store.

For some reason the best rates seem to be at small banks located in the rural south. I've recently opened rewards checking accounts at Southern Missouri Bank, Heritage Community Bank in Arkansas, and my favorite, "Redneck Bank" in Oklahoma, which has the motto "Where bankin's funner!". Their web site is pretty good. If you mouse over the outhouse, the door opens. Best experienced with the sound turned on.


Yes, they are a real bank. More frugal tips to follow!