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Monday, October 11, 2010

5.25% Checking Account: Not Buying It

Today I received a tempting email from my credit union: 5.25% checking! That's amazing these days: my Vanguard money market is at .1% (if that); my high-yield savings is at 1.3%; I am considering a 1.9% CD.

With La Cap's All Access Advantage checking account, you have the chance to earn dividends as you make purchases.* With no monthly fees and no minimum balance, it's a great way to make the most of your checking account. It's just our way of showing you that we care about giving you the best rates and services possible.

Open an Account Now

*APY = Annual Percentage Yield. La Cap Checking (Share draft) Accounts are variable rate accounts. La Cap may change the dividend rate for your account as determined by the credit union Board of Directors. Dividends are posted and compounded monthly. No minimum balance required to maintain the account. Applicable fees and conditions could reduce the earnings on your account. Qualifications to earn dividends: - 25 or more non-ATM debit card transactions posted per month: - 5.25% APY on balances up to but not exceeding $5,000 - .15% APY on balances exceeding $5,000. If qualification stated is not met: - .15% APY on entire balance.

Read the fine print. The offer is only for your first $5000.00 and you must make at least 25 non-ATM debit card transactions per month.

Let's do the math. If you have the whole $5000.00, you can get about $262.00. That's nothing to sneeze at.

Let's do the math some more. The earnings total about $5.00 a week. That's much less tempting. I don't have a debit card; I don't buy something 25 days of the month. For $5.00 a week, I can do other things that I enjoy more than keeping track of debit transactions.

I can go to Big Lots and save $5.00 on food. Ditto for looking at the grocery ads and planning my menu around something on sale. I can check 2 movies out of the library. I can hand wash a sweater rather than sending it to the dry cleaner (I do that anyway). You get the idea.

Since I find keeping track of things extremely stressful, I don't use that supposed Holy Grail of frugality: the grocery coupon. I don't know how to sew and am glad that, because of a small fire in the home ec room, I never had to finish my skirt, since I was on my way to getting a bad grade.

There are so many ways to be frugal! Aren't we lucky that we can find ones that suit our temperaments? Which are your favorites?


see you there! said...

What is that old saying? If it sounds too good to be true then it probably is.

I agree, trying to keep up with their requirements would making saving painful.


Suzy said...

I turned down a similar offer at my bank. I don't think many places will accept the debit as a credit card because of the fees they're charged. I know wal-mart will only take them as a debit.

Shelley said...

My favourite way to be frugal depends upon my current goal. When I was saving for a deposit on a house, it was to put a chart on the fridge and see my progress. For a long time I've enjoyed experiments in cooking. Just now, I think I'm enjoying using up what I already own and getting rid of some of the excess clutter (like all clutter isn't excess...).

Anonymous said...

I can't keep track of things like this either.

I come from a family of bargain shoppers who keep track of sales and prices and who clip coupons, etc. But apparently, I did not inherit that gene.

My way to save money is to avoid recreational shopping (except for thrift stores-- but even there, I have to be careful not to spend over my limit.) Buying fewer things equals fewer expenses to track.

Funny about Money said...

Gosh. I don't think I make 25 purchases a month. Hm...counting... In September I made 24 purchases; in August, 20; in July 22. So, I suppose it would be POSSIBLE to jack up my spending a little more...but why would I want to put all those purchases on a debit card, when they can go on a credit card that a) provides a little float and b) gives me a kickback at the end of the year?

Last spring American Express kicked back $333 in rebates on a year's charges; that's better than the $262.50 La Cap's maximum balance of $5,000 would return.

I am the working poor. said...

The fine print is always a shocker.

Loved your home-ec story. I can't sew either. When I had to take home-ec I told them the sewing machine they made me work on went too fast. They told me it was my fault my seems looked bad. I said please take a look at it, it is not working right. They still ignored me. After I finished the class with a poor grade they sent the machine away for repairs. Good idea, shoulda had a fire. ;)

Duchesse said...

My favourite way is to meet friends for coffee instead of lunch. I figure that's at least $100 per month and we spend just as long together and have as much fun.

My *worst* way was trying to colour my hair myself. I dyed the bathroom walls- had to repaint- and wrecked the bathmat. Though cheaper to be gray, it looks dreadful on me.

Frugal Scholar said...

@Darla--True, but I find it particularly annoying that this offer is coming from a CREDIT UNION, so often thought to be more customer friendly than the bad banks.

@Suzy--To tell you the truth, debit cards scare me because they lack many of the protections of credit cards.

@Shelley--We should empty our freezers together. I'm making slow progress.

@Ms. M--Good point. My son is a slob (he's not the only one in the family) and he's discovered that if he doesn't have much stuff, his room won't be as messy--and he can find things a little more easily.

@Funny--Of course! The CU or bank wants the fees from all the purchases--far more than $250/yr. Less probably, since most people would mess up a lot and lose the interest.

@Iam--In my case, it was not a bad machine, but extremely poor fine motor skills.

@Duchesse--If you want to skip the salon, you might try again on the hair color. Some are very liquid and fly all over the room; others are less prone to do this. BTW, let's have coffee in Montreal.

Anonymous said...

I can't handle those kinds of strings. Minimum balance, sure. Things I have to actively remember to do... no way.