Emigrant to HC: You're stuck with me, baby.

So, I've had a long (and fairly fruitful) relationship with EmigrantDirect, the bank holding my condo fund. While never the leader of the pack in rates, they remained reasonably competitive for a long time. More importantly, they covered my other needs for online savings: good beneficiary service, a clean and usable interface, the ability to use BOTH direct deposit and ACH for transactions, and prompt issuance of statements.

But in the wide-spread rate cuts of the past few months, they've slipped precipitously, down to 3.6%. So I thought I'd take a look at other options. I started, as you do, with BankDeals' weekly summary. Surely I could find something comparable?

I found 31 banks offering rates better than Emigrant. That seems like a lot.

* OneUnited - 5.15% (min $1K)($50 bonus)
* Countrywide - 4.75% (min $10K)
* EverBank - 4.51% ($1.5K min), 3mo promo
* Corus Bank - 4.32% MMA (min $10K)
* Washington Mutual - 4.25% (requires checking)
* Grand Yield Direct - 4.25% (min $2.5K)
* WTDirect - 4.15% ($10K min)
* Zions Bank - 4.08% MMA, outside of Utah, (min $1K)
* UmbrellaBank - 4.02% MMA (min $1K)
* Capital One - 4.00% (Savings) (min $10K)
* Citibank - 4.00%, requires checking account and bill pay usage
* BankUnited - 4.00% (min $5K)
* Heartland Bank Direct - 3.80%, ($500 min)
* Doral Bank Direct - 3.75% (min $1K)
* FirstFedDirect - 3.75% (min $1K) (closed to CA residents)
* E-LOAN - 3.75% ($5K min), account review
* CapitalOne/Costco - 3.70% MMA (min $5K, Costco members only, $50 deal for exec. members)


But as you can see, a lot of these offers were eliminated on their face because I refuse to accept more than $200 as a minimum threshold (I'm going to take most of this money OUT eventually), and because I refuse to set up another checking account.

I was left with:

* Century Bank Direct - 4.54% (min $100)--No ACH transfer system.
* Provident Direct - 4.50%--No ACH transfer system.
* GCF Bank - 4.47% (min $100), 3-mo promo--Only a promo rate, and no ACH transfer system.
* ETrade Bank - 4.40%, post ($25 bonus)--Great, but I already hold an account with them. I believe in Murphy's Law, so I don't like having all of my savings in one place.
* Alliant Credit Union - 4.35% (min $100)--I don't appear to meet eligibility requirements.
* Flagstar - 4.25% MMA--Hard credit pull and rapid rate drops.
* Savings Square - 4.25%--No direct deposit, just ACH.
* iGobanking - 4.20%--Reportedly a very slow opening process.
* ShoreBank - 4.15% ($25 bonus)--Potential hard credit pull, and NO beneficiary designation (a total dealbreaker).
* AmTrustDirect - 4.10% (e-Savings)--Hard credit pull.
* M&T Bank - 4.05%--No ACH transfer system and a hard credit pull.
* AmboyDirect - 4.00% post ($25 bonus)--No information on direct deposit.
* UFB Direct - 4.00%--No free ACH transfers, potential hard credit pull.
* FNBO Direct - 3.85%--For that differential, is it even worth it?

I'd consider iGobanking if the opening were better, AmTrustDirect if it didn't have a hard credit pull (why should you ding my credit score if I'm loaning YOU money?!?), and AmboyDirect if I could do direct deposit. But none of these seem like a perfect substitute that would merit risking three or four days of lost interest.

If you have experience with any of the three, or have an account somewhere that I should consider, let me know. Otherwise, I guess I'm staying with ED.

When $5,000 shows up in your mailbox.

It was a bit of a surprise when I opened the envelope last night, although it would be impossible to pretend that I didn't know a check was coming. Before my grandfather passed away, he explicitly expressed an intention for his four grandchildren to receive the funds left in his checking account. (That and all other assets were included in his trust, so my uncle and my father could perform transactions on his behalf.) Still, I knew some of the money had to go to funeral expenses, and I was expecting less than this.

And of course, it's all somewhat fraught, because it reminds me how readily he donated money during his lifetime.

I still want to do something worthwhile with the money. So I'm sending all of it towards the first tier of my credit union loan, which should allow me to eliminate that debt by the end of June, 15 months ahead of schedule. Why?

It will make the biggest impact on my cash flow. This loan is the single largest fixed expense I have after rent. Even though I'll be paying more on the second tier of the loan when the first one is paid off, I'll still free up about $150 a month for savings or other loan payments. (Or, given that I'll probably sign another lease to start in June, increased rent.)

It will eliminate my highest-rate debt. The loan was made at a quite reasonable 5.9% APR, but there's a gap between that and 5% on my Perkins loan, and a still greater gap between that and my 2.75% rate for my Direct loan. And of course, tier 2 of the credit union loan is at zero percent. (Long story.)

It will improve my debt-to-income ratio for when I purchase a condo. As I said, $150 a month will no longer be earmarked toward paying off debt, which will make the lenders (not to mention ME) more confident about my ability to manage a mortgage and the other attendant costs. Eliminating my Perkins loan entirely would lower my monthly obligations by less than $50 a month, which is far less impactful.

I could contribute this to the condo fund directly, of course. Boosting my downpayment would be nice, and I'll be saving still more to that end after paying off this loan. But lowering my monthly debt payments is probably more important as a first-time buyer.

And finally, it will give me more "outs" in an emergency. My emergency fund is based on continuing to make all my loan payments at present levels. However, should said emergency last longer than a few months, I have fewer options for this loan than I do with others. Borrowers can request that federal student loans be granted a deferral or forbearance. My tier 2 loan could presumably be dropped back to present payment levels in a real emergency. With this one, however, it's "make your payment every month."

Now, in a worst-case scenario, I could initiate a balance transfer from my credit card for the much smaller outstanding loan and give myself more time to get back on my feet. I have no intention of actually doing this, mind you. But it gives me comfort to know that I now have the option.

I think my grandfather would be glad to know that I used this money for something meaningful. And I think it will take a lot of worries away from me.

January Net Worth (+8.6%)

So basically the story is: Less liquid assets, BOO! More liquid assets, YAY!

Personal Property

KBB dropped the value of my car a tiny bit.

Cash and Cash Equivalent

I benefited from three pay periods and getting my locality pay adjustment in the last pay period of the month.

My online savings accounts benefited from shifting over the excess in my overdraft fund and from the extra $200 contribution I made to my condo fund (apportioned from the "extra" pay period).

I decided to wait to boost my savings allotment (I shoot to have my overall short-term savings be 10% of my gross or higher) until the first pay period in February to give me some breathing room, but I still think this was a healthy increase.

Investments

Eh. I guess it could have been worse?

Loan Balances

Beyond the usual payments, I also made an extra $200 principal payment to my Perkins. This is at a slightly lower rate of interest than my credit union loan, but it hastens the payoff date by a significant amount.

Other Debt

This doesn't really tell the story at all. I charged a lot, paid some of it off with holiday funds, charged some more for clothes and a trip to Philly, paid almost all of it off with my extra paycheck, then charged some more for my prescription sunglasses (which will be their own entry very soon), and was left awaiting reimbursement. If not for that, my new charges would have been paid almost to zero, well before the new statement date.

I think I've decided that I'll start making a payment twice a month, once mid-statement and once after the statement closes (excluding reimbursement payments, which I'll just send over when I get them). This should help keep me on track and keep my balance below 10% of my credit limit. I'm already earning some decent cash rewards.

The Month Ahead

I've already gotten through a big birthday bash weekend (and stayed largely under my spending target). I'll be attending a play, but since I already paid for both tickets (half-price!), my dinner will largely come out of being reimbursed by my friend.

My tax refund should hit the appropriate accounts within a week or two, which will boost my savings.

With my pay raise, I finally feel like I have breathing room to deal with all my flexible expenses. I still have to plan for certain purchases (I think I should get one more pair of shoes sometime in the near future), but I'm not stressed. And that's a good thing.

Why is my refund $70 more than I expected?

As I've said previously, I make an effort to get a small refund on my taxes, "small" meaning approximately $50 or less.

In order to accomplish this, I developed a withholding worksheet in Excel, which, coupled with the IRS withholding calculator, meant that I should not have expected more than $70 back. (Its final determination was that "any refund or balance due should be less than $50", and I pushed in a little extra to make sure I was on the positive side of the ledger.)

Everything appeared to be calculated correctly. So why, when I ran TaxAct, did my refund amount come out to $143?

Because the student loan interest phase-out range moved up $5,000. My AGI (thanks to retirement contributions) was solidly within the range instead of approaching the very top, so I was able to take more of the deduction than I would have otherwise.

I'm not really fussed about the lost interest, since most of the extra contributions were made in December. So I'd still have paid as much or more to make an electronic payment or to mail the return with delivery confirmation.

And I'd like to say that I will be saving this, but I'm planning on sending $100 of it to my travel fund in anticipation of my cousin's wedding. The remainder will go to my condo fund.

At any rate, if you do your taxes by hand, make sure that you account for the higher phase-out range. You may be able to deduct more than you thought!