Auto withdrawal from Ally savings

The Sandbox Finance/Investments
1

I’m switching from WF to Ally …for reasons… at WF I’d have all deposits and withdrawals to/from the checking account.

At Ally, I have a savings account & money market account & and spending account (that’s their term for a checking account).

The spending account seems superfluous because I don’t have any actual checks, haven’t written one in years, and don’t see any reason to.

Since the money market account pays the best interest rate (right now (for a while it was the savings account)), I figure I should just have all my money go into/out of their instead of playing the “make sure I have enough to cover bills in the checking but keep most of it in savings”-game…I can just keep all of it in savings.

Is this feasible? What are the cool kids doing these days?

2

I find it easier to have everything deposited in my checking account and I transfer money out every paycheck as needed to take advantage of high interest rates

This way if I get crushed in a trash compactor - my credit cards, utilities, subscriptions, etc will still get paid for a few cycles before my wife needs to go in and fix the billing

I enjoy transferring money from checking to savings every 2 weeks. It feels good. If it were every day I would find it a bit more annoying but for now it is something I look forward to every other Friday

3

One advantage of a limited-funds spending account over a “everything-everywhere-all-at-once” account approach:

If your account info is compromised, how much do you want to limit the potential damage?

If all of the financial transaction are virtual, you might want that limitation in place.

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4

Is this going to be your bill paying account? If so, I would check for any transaction count limits that you may bump up against.

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5

Yes, it is. That’s a really good point.

6

Ooh. Good point…especially since I do auto withdrawal for corrupted companies such as T-Mobile .

7

Well, you see, I was going to have everything paid directly out of the “savings” account , but VA & Dara have given me good reasons to reconsider.

But, your overall point is a good one, too. I am prone to trash compactor accidents, so it’s good to have that bill paying in place so the water & electricity don’t get turned off.

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8

Note that you can have a “recurring” transfer from savings to the spending account where once a month, you’re transferring sufficient funds to take care of recurring bills.

And you can set up a “lower threshold” for a minimum amount to be in the spending account to ensure that bills are covered. That is, if you think that $200 is sufficient to cover the contingencies of timing of cash flow, you should be able to set up an alert for when the account falls below $250.

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9

Having my paycheck go into my savings and doing a monthly transfer to my “spending” account to cover expenses is how I have handled my finances for almost 15 years. I also pay for everything with a credit card and pay the full balance every month. So my mortgage and my cc bill are the only things that come out of my “checking” account.

And I spend my sweet, sweet, credit card points on super fun stuff, like necessary household expenses.

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