The interest itself doesn’t make much sense to me on a checking account since it is a transaction account and generally you don’t have a high revolving balance sitting in it (of course with better interest people are more likely to). So for example say you keep an average monthly balance of $10,000 in your checking and earn 3%, earning roughly $300 a year. For many people $10k would be a fairly a nice cushion in a checking account.

So instead, say you like to keep that same $10k cushion but you split $5k into a savings account like ING or another earning between 4.5-5% and $5k in your local checking account earning between 0.75-1.5%. At 5% in savings half the money earns only $50 less interest than 10k in a checking, so adding the local checking interest you would come out basically breaking even.

Then by doing this not only do you about break even but you retain many of the benefits of having a local bank as well.

Anyway, just throwing the question out there because I have never considered opening a checking account like the ING account so I’m wondering if I’m really missing something as far as benefits go.

I just don’t think I’d be able to ditch my relationship with my bank, there are far more benefits to working local in my situation. My checking earns 0.75, has free checks, comes with a free safe deposit box, and most important comes with a branch manager I know and have worked with for years. If there is a problem with my account I can simply walk in and talk to a familiar face in person to resolve the issue. I cringe at the thought of dealing with customer support via 800 number for basic banking issues.

Also, as a quick note, a long-term relationship with a bank can go a long way when it comes to future loans or financing. It is hard to predict future needs, but shaving a point off of some sort of financing simply because you have a banking relationship could be worth quite a bit more than the little added interest gained otherwise.

Anyway, I’m just curious. I know you have run through your specific situation very carefully before making any decision, but for people such as myself who have not thought of this alternative I just wanted to understand the driving forces behind this big move.

The other side of this is that even though we don’t have a lot of money, we still have some in this bank. I have to ask them for a total before I withdraw anything. There are no outstanding checks, obviously. I’m trying to use this as a learning experience that might just motivate me to keep better track of what money we have in the bank and what our balance is.