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Item-Specific Savings Accounts
CapitalOne360 (formerly INGdirect) allows you to create unlimited checking/savings accounts with no extra fees. This makes it extremely useful for creating savings for something specific (vacation, car, etc.) and to track your progress independently of your other savings. This is also very useful for accruing money to pay for recurring expenses that only happen every X years (e.g. house painting).
Read more: Road to financial freedom: The basics
They are the most dangerous way to pay for anything! You have just shared your routing number and account number with anyone who sees that check. I could present your bank with an electronic draft and empty your checking/savings account tomorrow with just that information. Use your credit card or debit card instead.
AVOID Monster Mega Banks
Think Bank of America, Citi, Chase, Wells Fargo… Instead, check out CapitalOne360, Simple.com, Ally, and your local credit unions.
Read more: Beware of sneak attack bank fees
Millions of people in the U.S. do not have checking accounts. Today, many banks require you to have a certain credit score to get a checking account (even if you aren’t asking for any credit)! Without a checking account, you cannot do many things in our digital money culture (e.g. direct deposit, depositing checks with smartphone etc.). The best alternative is provided by American Express and sold exclusively through Wal-Mart. It is called BlueBird and it provides almost all of the features of a checking account and has VERY low fees.
More advice from Matt Quinlan:
- Knowing the basics
- Investing tips
- The ins & outs of insurance
- How to be smart about debt & credit
- How to buy, rent and lease cars the right way