Shuffling Money Take Two

You may have read in my last post that I've been shuffling money among various credit cards to take advantage of low monthly interest rates. Some may think it's crazy. I call it being frugal. A penny saved is a penny earned, and I like my pennies.

Speaking of interest rates, I recently opened a Citibank E-Savings account in hopes of earning more than the 1% offered by our local bank. Citibank has a deal right now where you can get 5% interest, as long as you open a checking account at the same time. Well, we already have a checking account at our local bank and don't need another one, but I would like to take advantage of the higher interest rate for our savings.

Over the last several years, I've been saving a little here and there, to build up an emergency fund. Of course, we've been saving elsewhere too by tucking money into our work-related 401k accounts, buying stocks, mutual funds, savings bonds, and so forth. But, cash is king, and you never know when you'll need a cushion to fall back on. Dave Ramsey, famed financial adviser, recommends 3 months salary as a good emergency fund. I've been feverishly trying to accumulate that, but let me tell you, it's hard. Especially when you "like" to spend money, have new things, and all the latest gadgets. Ha.

But, I think we're about to that point, but earning only 1% interest is not a desirable option right now. So, after some thought, I decided to transfer our emergency fund from our local bank to Citibank, to earn the 5% they offer. I'm not sure of any catches, but it seems there might be some withdrawal limits on the account, in that you can only withdraw a certain amount of money each business day, and can only have so many withdrawals each month. Plus, you have to do all the banking online, i.e. not in a branch, but I think the limits are something we can live with. The extra interest will be nice, and the money will be available if and when we need it.