About a year ago, I got the idea that I needed to transfer my emergency fund of $20,000 from the local credit union where it was in a money market fund because the yield was low, 0.54 percent. In a year, the dividends paid were $49.32.
I finally got around to it in July. After research, I selected a money market mutual fund at Vanguard. The yield currently is 5.27 percent.
The dividends so far are: July, a partial month, $38.47; August, $94.31; and September, $91.95.
I kept the credit union money market for so long because I liked go to the credit union and get a check when I had an emergency.
At Vanguard, I asked for a money market fund that comes with checks.
Excited about finally making more money on my emergency fund, I was intrigued when I looked at my checking account at another credit union online and saw that I could make 4.07 percent interest if I signed up for a special program. To get it, you needed to use your debit card 12 times a month and sign up for an electronic statement.
I went to talk to the manager of the credit union to see what the credit union gets from me using my debit card. I seldom use it. I’m in a credit card rewards program and I like to use the points to get airline tickets to visit my daughter and her family in California. In addition, if you have a consumer complaint that a company won’t resolve, sometimes a credit card company will reimburse you. With a debit card, you don’t have that option.
The credit union manager said the credit union receives a small fee from the financial institution that issues the debit card each time members use them.
It sounded positive. I estimated I’d make about $50 a month based on my income.
Since the calculations are made on the day before the end of the month and it was near the end of September, I spent a day making 10 debit card purchases.
When I got an email with what I’d made in the checking program, I was disappointed. It was $10. Apparently, the interest is paid on the average daily balance not the highest balance during the month, what I used for my estimate. I should have noticed the fine print, which I saw later, that in June 2023, the average credit union member in the program made $34 a month.
So, take the time to check out what you’re earning on your checking and savings accounts.
There are a lot websites that rank financial institutions according to the interest they pay on savings and checking accounts. Make sure you choose a reputable financial institution for any money transfers.
Some reputable websites that I check out often for financial information are: Consumer Reports, Kiplinger Personal Finance, Money magazine, HerMoney from Jean Chatzky, WalletHub, MarketWatch, and Clark Howard. All of them have posted lists of the best financial institutions for saving and checking accounts.