Comments on: A Two Checking Account System: Why It Works For Me

By: Sue

Sue — Sat, 19 Sep 2009 01:36:48 +0000

As John in comment#48, I also have two accounts with the same bank. One of the checking is my main account where my pay is direct despoited and other one is paying off my credit card every month and for co-pays for doctors visits.

By: john

john — Wed, 06 Aug 2008 04:09:29 +0000

I use two accounts with the same bank. One for normal monthly expenses and the second as my personal “escrow” account. Each pay I tranfer 1/2 of my mortgage payment (I get paid biweekly) and 1/8 of all my quarterly bills i.e.: water, taxes, insurance…this way the money for the quarterly bills which used to feel like a surprise is always there! It works really well…in fact I have started adding an extra $250 a pay to the escrow account and and barely notice it…but can pay down the principal an extra $500 a month…cutting the length of the mortgage in half…cool stuff!

By: Tony Roberts

Tony Roberts — Mon, 09 Jun 2008 14:59:03 +0000

Coulee Bank ( http://www.couleebank.net ) offers an incredible 6.01% APY with their Rewards Checking account. The rate is easy to earn. All you have to do is make 10 check card transactions a month, use e-statements, and do 1 automatic payment a month (they call it ACH). Coulee Bank pays 6.01% on the first $25,000 and 1.01% on anything above that. The best thing about this account besides the rate is it is FREE, you can apply online, and it is from a great bank with real people that answer the phone. And as they like to say, Banking Green has its Rewards. The Rewards Checking account saves paper and preserves our natural resources. No wonder I feel good about recommending this to everyone I know. Check it out. I guarantee you will love it.

By: bankelele

bankelele — Wed, 21 Nov 2007 07:20:21 +0000

i live in Kenya where even as I wish I could have a no frills, no charge account, no bank has that product and we are stuck with very expensive bank fees. The best we can get are flat fee accounts, where there are a bundle of services offered for once price – includes checkbook, e-banking, TM fees – mine costs about $7.50 a month

By: MikeVx

MikeVx — Wed, 21 Nov 2007 03:05:05 +0000

I have 4 checking accounts. One with a credit union that is part of the co-op ATM network (free ATMS nearly everywhere!), one is with an area bank that I use as a debit card account, one at another local bank to play personal-escrow with my property taxes, and an ING Electric Orange, which serves mostly as a second debit card account, as the debit card is compulsory and therefore the account is not suitable for any other use on a regular basis.

The CU account handles the day-to-day bills and cash needs. The tax account gets three checks drawn on it a year (taxes and homeowners insurance) with deposits out of each paycheck, the local debit account gets money sent in (via my ING savings these days) for spending with the card (on-line purchases, mostly, plus the odd “oops, I’m out of cash” moment), and the ING EO serves as a backup debit card. If I do use EO to send money by check, I transfer the money from savings and set up the check before 11:00PM so that payments are safely isolated from any card-based shenanigans.

While I acknowledge that debit cards are useful, I consider the practice of connecting them to “live” checking accounts to be distilled insanity. A single scam or even a mangled debit and you are out more than a lifetime of benefits add up to. That is why I have isolated accounts. The damage is limited because theft or errors relating to a card cannot make my car payment bounce.

By: Sandy

Sandy — Tue, 20 Nov 2007 20:00:56 +0000

USAA also does mortgage loans and home equity loans. I had both with them, paid them off last month (yah!) and after I paid off my house, they pre-approved me for a $125,000 heloc, which I will never use. I mention this because in prior posts some people were under the impression if you paid off your house, you couldn’t tap into the equity later and get a heloc; you can. USAA has 2 different savings accounts. I have the one they call Performance First Index, which has a higher interest rate, but there is a minimum balance required (use it for my emergency fund). It’s interesting to read how others manage their money because we pick up a lot of useful tips that way.

By: kath

kath — Tue, 20 Nov 2007 19:20:51 +0000

I do the same thing as Meg 5:40pm does. I have one account for my fixed expenses and automatic withdrawals, and another for discretionary spending- gifts, entertainment, kids piano lessons, extras. It seems to work for me.

By: Beth

Beth — Tue, 20 Nov 2007 18:00:48 +0000

I second the recommendation for USAA. I use them for 100% of my banking now and have been extremely satisfied. I didn’t realize that mere mortals (non-military or military-relatives) could use their banking products too. They are also my source for a 7.75% credit card (prime + 0%).

I also have accounts at Navy Federal, and they were great as well, but slightly higher rate on the card and not as good an interface for web bill pay, so I made the switch (but left those accounts open as I’ve been at NFCU since I was 7 – talk about a long credit history!).

By: EA

EA — Tue, 20 Nov 2007 17:18:05 +0000

I’m getting ready to do the same thing. I’m a former NetBank customer, and since Netbank’s accounts were purchased by ING Direct I now have an Electric Orange account. After Dec 7th I won’t be able to write checks on the old account, nor will I have the nice pre-paid deposit envelopes from Netbank. I’ll be opening a small checking account locally and linking it to the Electric Orange account to transfer money in and out. I’ll be able to write the few checks I need and deposit any checks that come my way.

By: Kamantha

Kamantha — Tue, 20 Nov 2007 16:06:02 +0000

I have actually 3 checking accounts. I have a main checking account from Citibank. Then I have one that I keep $200 in at the Credit Union (never know when you might need a loan or something) and I have a ING Checking Account, that I acutally treat like a savings account. I keep my short term savings there.

I also have a money market account where I keep my intermediate savings and then the ING savings account for long term savings.

By: Chris

Chris — Tue, 20 Nov 2007 15:59:07 +0000

We use two checking accounts to keep a simple budget. One checking account is for “Fixed Expenses” (e.g. savings, mortgage, auto insurance, utilities) — things that we know will occur regularly if not monthly. The second account is for “Variable Expenses” (e.g. groceries, entertainment, clothing). At the end of each year, we examine our bills for the last 12 months and determine the bi-monthly amount required to cover Fixed Expenses for the next 12 months. This amount is then set for direct deposit. The remainder flows into Variable Expenses. This system insures that we always have money to pay the bills, even in months where several large bills are due at the same time (i.e. auto insurance + summer utilities).

By: Chris

Chris — Tue, 20 Nov 2007 15:23:56 +0000

I do this same thing, but my primary bank is USAA Federal Savings Bank. I HIGHLY recommend you check it out. They have an insurance company you can only use if you are active or retired military, but the bank is open to everyone, and they are hands down the best bank, offering the most free services, highest rates, and even reimbursement of ATM fess charged by other banks. The only catch is they don’t have local branches, but I use a local bank at a different bank for deposits, and then ETF funds to USAA which USAA makes available immediately. Free bill pay, interest on checking at any balance, I could go on and on…

By: sp

sp — Tue, 20 Nov 2007 13:59:02 +0000

I have two checking accounts. One is a free checking account with a local bank, because I often deposit expense checks and rolled coins (try depositing coins at an online bank!). I also have my insurance payments deducted from that account. Because the payment amounts are not the same each month, I keep an eye on the balance and add money when needed. The branch (with an ATM) is only 1.5 blocks from my house.

My second checking account is with Chase, which also has a bank branch near me, and I have my paycheck deposited to this account. I use my Chase Freedom card (like Danny does) to cover everything I can, and I transfer payments to the card twice a month so that I do not pay interest.

The Chase checking account is free, and they offered me a $75 sign-up bonus because I already had a credit account with them.

Also like Danny, I have a high-interest savings account with Emigrant and a link from my checking to an ING account (mine is a special savings fund rather than Electric Orange). Gee, Danny, were we separated at birth?

I leave just enough in the checking accounts to cover the bills, plus a couple hundred of padding to cover irregular expenses that may crop up during the month.

By: Danny

Danny — Tue, 20 Nov 2007 04:58:46 +0000

Here is what we do:
Chase Freedom credit card to buy everything (food, gas, clothes, etc.), even bills, tuition, and rent. The rewards % is great. We use it like a debit card, and never carry a balance.

Then we have a Wells Fargo checking account that we use to deposit checks and to use as a conduit for out ING Electric Orange. Ideally most of our checking money stays in ING to get the interest.

Then an Emigrant Direct high interest savings account to store our savings.

Everything is automated to either come from our credit card or ING Electric Orange if they don’t do auto payments on a card. It is a bit of a hassle having so many accounts, but I spend less time transferring money than most people do writing checks and paying bills.

By: Louise

Louise — Tue, 20 Nov 2007 03:31:08 +0000

@Frugal Bachelor
Maybe Frugal Bachelor is joking, but the reason Frugal Bachelor has never seen an ING in person is that they are online only (which is why they offer relatively high interest on checking and savings accounts).

By: Frugaljane

Frugaljane — Tue, 20 Nov 2007 02:54:35 +0000

Frugal Bachelor,
If you have a $10 bill (or any amount), any bank should be willing to give you a roll of quarters. Before I got a washer and dryer at home, I just exchanged my bills for rolls of coins at the bank branch inside the grocery store every few weeks.

By: Also Dave

Also Dave — Tue, 20 Nov 2007 02:47:06 +0000

Jen,
I have a seller financed mortgage, and have been deposited my monthly mortgage check into the seller’s checking acct at the local bank each month for the past 4 years. So, I already had the necessary account number and routing number, and having just recently signed up for Electric Orange, I advised the seller about depositing the mortgage payment directly into her account this way. She “picked up” this month’s payment via email, so I think it worked quite well, but haven’t heard on what day it arrived to know how many days the transaction took since the electronic transfers generally seem to take a day or two. I’m saving myself 12 trips to the bank each year. And that was the only regular paper check I was ever writing. I’m also earning interest on the mortgage payment before it’s sent. I used to just pay it immediately when I got paid, a week or two before it was actually due b/c there was no reason to keep it in my non-interest bearing checking acct.

By: JM

JM — Tue, 20 Nov 2007 02:46:00 +0000

I stumbled across the same system! Like Susy (3:17) I keep about $500 in my local bank’s account, except my local bank (Commerce Bank) is being gobbled up by TD Bank. Commerce charges me no fees provided my balance stays above $100, but I don’t know what TD Bank’s policy is. I have noticed that transfers from a regular bank to ING Electric Orange take several business days longer than they did in the past, so you have to watch it. The solution is to transfer funds from ING Savings which is instantaneous. Another benefit: the overdraft interest charges are peanuts compared to what most banks will charge for a bounced check (it can happen to the best of us).

I don’t see any reason to keep any significant amount of cash in a conventional bank’s checking account.

By: FinanceAndFat

FinanceAndFat — Tue, 20 Nov 2007 02:28:24 +0000

Cool, I just can’t decide how I want to manage my checking accounts. I currently have three with different banks and I have yet to find my perfect system. I’m not sure if I can ditch the local bank yet, even though I would like to. Or maybe I just need a better local bank.

By: Sandy

Sandy — Tue, 20 Nov 2007 02:19:24 +0000

I have a free checking and savings account with USAA Federal Savings Bank. They refund other banks’ ATM fees. This is great for me locally or when I travel out of State. I have direct deposit, but on occasion will receive a check to deposit and can do that in 2 ways: either w/a scanner, or mail it in one of the self-addressed, stamped envelopes that they provide. They give me free checks; I probably write 3 per month. As for the bills, I have web bill pay with them for most and the rest are automatically withdrawn. I have auto and home ins. with them too, as well as a charge card, which I use only for online purchases and airline tickets, then transfer that amount from my savings to checking to pay it off immediately. I’ve been banking with them for over 20 years; their customer service reps. are top-notch.