Posted by Chuck on January 8, 2019
High-Yield APY Accounts

Published on January 8th, 2019 | by Chuck

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Powerful High Yield Checking + Savings Account Combo with Memory Bank

A while back, in the post What’s the Best Simple High-Interest Checking Account?, I pointed out that from all high-yield accounts available none are checking accounts, with the exception of the 1.6% Memory Bank checking account (direct link).

At the time, I don’t think Memory Bank offered any high-yield savings account, but since September they’ve been offering a competitive money market account, and they’ve continued bumping up the APY rate as rates rise. That makes me optimistic they’ll continue maintaining their spot near the top of our Best High-Yield Savings Rates list.

Not everyone has much cash on hand, but there are some people who keep large stashes of cash, either as their MS float, because they don’t want to invest all their money, or similar reasons. Many banks like Ally and Discover offer great rates on savings and a terrific full service checking accounts, but no interest is earned on the funds held in the checking account.

This Memory Bank combo creates a new option of getting a highly competitive savings rate with their money market account (currently 2.40% APY which is near the top of all rates available) AND a decent rate on funds in the checking account (currently 1.60% APY). This is especially useful for someone who moves large amounts of cash, and sometimes wants to put into savings for a few months before they’ll need it again. Presumably you can easily transfer funds between the money market and checking accounts.



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Tim
Tim

My favorite strategy for yield on my float: Open 5 (or more) Ally savings accounts, and one checking account. You can open them all in the same application, and Ally lets you have as many as you want.

Each savings account gets 6 withdrawals, so you open as many as you need so that you can auto billpay all your CCs and bills directly out of savings, just spread the bills evenly across the multiple accounts.

You can keep the checking account with $1, and overdraft auto-transfer linked to one of the savings account, on the off chance you ever need to write a check for anything.

Lets me save all my liquid cash at the high savings rate.

Skor
Skor

This is a great strategy, thanks for sharing

Newbie
Newbie

+1

86
86

+2

arch
arch

Discover offers this also and they transfer exact amount, not increments. Only drawback is they don’t do it smoothly, first you get an e-mail saying you’re overdrawn but it then it kicks in ok. And I think they only have the 3 savings accounts I have, don’t know if you can open another of the same account. But 3 is enough for me now. Two at 2% and one at 2.05%. Never used Ally, how do they compare?

Tim
Tim

Personally I’m a big fan, I’ve hardly ever heard anyone have a bad thing to say about Ally. Probably not worth the move though if you’re already ensconced at Discover, I’d imagine they’re not too different.

I think the thought behind the $100 increments is that it tries to protect you from having multiple tiny charges in rapid succession, e.g. if you’re out and stop to buy a coffee, then a bagel, then a pack of gum, you don’t want to use up all 6 withdrawals accidentally, so the $100 gives a bit of a buffer.

arch
arch

That’s for the debit card users. My only debits are 50c Amazon loads and I always know how much is in my account. The only time the protection kicked in was when I missed the deadline to transfer to cover a bill pay. Discover is great for DD coverage at many banks, so I wouldn’t switch, maybe just open Ally. How does Ally compare on DD and do they ever offer a bonus to open? –Thanks

Tim
Tim

I can’t comment on DD. Ally did however just have a bonus that just ended wherein they’d pay you 1% of any new money you brought in (max $1000 bonus for transferring $100,000). That was good for both new and existing customers.

tidefan123
tidefan123

I have transitioned to Alliant for my primary banking needs, but this is a tempting alternative to get even a little more yield. I wonder how likely it is they keep it up.

pato
pato

Memory Bank is nice but their outgoing ACH transfer limits are a joke. You are limited to 2k a day and 10k a month. You have to pull the money from an external account to access your funds.

Dan - Legal Bank Robber
Dan - Legal Bank Robber

Transfer limits need to be fixed.

Gadget
Gadget

Use hub account! Spreadsheet! 🙂

Dan - Legal Bank Robber
Dan - Legal Bank Robber

The use of hub account is irrelevant. They offer a great rate but when I can’t transfer money w/o the hassle of pushing in and out through a middle man bank it’s not worth it. I’m not gonna change the account I pay my Amex bill from because I can not have any attention on my account. So I need to be able to just get a high rate on my MS float and then push quick to my main checking to pay off bill. But for Memory Bank that is too difficult.
Gadget

Gadget
Gadget

I just wouldn’t expect anything to get “fixed”. Most banks have anorexic external transfer limits. Look at Wells Fargo, for example: ACH limit is Daily Maximum = $5,000, 30-Day Maximum = $6,000. But use of a hub bypasses any imposed dollar limits.

Number of outgoing transfers/withdrawals of 6 per month is a constant for all Savings and MM products though, at any bank. You can thank Reg D and our govt for that. The only workaround for that is to have multiple of the same type of account or product if you want to get away with more savings withdrawals than intended.

Bill pay and external transfer limits are two different things, usually. I can’t say I know what rules are in place at every bank, but I am not aware of Bill Pay caps. (other than it counts for a withdrawal) You can also pay your Amex bill from the Amex site or Amex app and avoid any dollar limits. People change banks & payment settings all the time, so somehow I don’t think that is going to get attention from the RAT.

But, you do you. Is 0.4% difference in interest worth that risk of endangering your MS game?…. probably not. Party on.

Dan - Legal Bank Robber
Dan - Legal Bank Robber

Gadget Good points everything you’ve said. I have a 15k reported income and have spent 32k in 1.5 months on my Amex Cards I would like to do as much as possible to avoid any attention from them. Therefore I will be as cautious as possible.

NOT The IRS
NOT The IRS

how did you get to 32k MS? I need new ideas please,

Dan - Legal Bank Robber
Dan - Legal Bank Robber

Buy VGC ——> Serve/BB ——> Transfer to Bank Account

Repeat

Dan - Legal Bank Robber
Dan - Legal Bank Robber

Gadget Why didn’t you tell me about 1 day ACH through Ally. Changes the whole game, now I am content moving shit around for the .4%. Ah Memory Bank is good for more than just Amex CC funding 🙂

Gadget
Gadget

Dan - Legal Bank Robber 1. I am new to Ally, and really haven’t surveyed their services.
2. I think most banks have slowly upgraded their ACH speed. I am getting 1 day service usually at many banks. The online banking will say 2-3 bus. day, but actually take less. Maybe banks are opening up transfer windows at different times, and the change requires policy changes at each bank? Anyway, they have have slowing rolling increased ACH speed out in phases, and 2018 was supposed to be same day “payments”. In year 2020, same day ACH “transfers”. https://www.nacha.org/rules/expanding-same-day-ach

Andrew
Andrew

only complaints are low ACH transfers limits and lack of Money order deposits.

Ben
Ben

To the best of my knowledge, the T-Mobile Money account is also an interest-bearing checking account. It pays 4% with minimal requirements (you did a review, to recap the requirements are a post-paid T-Mobile line and a $200 deposit each month).

Downside is that 4% only applies to the first $3000, the portion above that earns only 1% (which is still great compared to most other checking accounts that don’t require contortions to qualify)

Justin
Justin

Just a warning that they have some ridiculous policies like not raising your ACH or mobile deposite rates until you have a high enough balance but it takes quite a long time to get a high enough balance if you can only do incremental deposits at their low rates.

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