ING Direct Money Checking Account for Teens

After watching the young Frugalsons accumulate a nice wad of cash from birthday gifts and the like and because I think it is critical for my kids to learn about handling their money responsibly, I opened ING Direct Money "Teen Checking" accounts for each of them a few weeks ago. This is basically a checking account (minus the physical checks) for minors that is structured as a joint account with an adult.

The ING Direct Money account boasts the following features:

• Mastercard debit card for the teen with free ATM access to the Allpoint ATM Network
• No fees or minimum balances
• 0.25% APY interest on balances
• Eligible for $25 referral bonus
• Teen account access via computer or smartphone app
• CheckMate remote deposit service
• Adult only ACH access
• Real-time text/email alerts
• Available for minors starting at age eight

The online application process was pretty straight-forward and I had the new account open and visible from my existing ten year old ING Direct login as well as the kids new logins I created within a few minutes. As always, please note that this account is eligible for a $25 account opening bonus as long as the minor is a new ING Direct customer, so it is worth getting yourself a referral link to help the young saver get an easy twenty five bucks to get started.

While the initial part of the process doesn't take long, be prepared to wait an additional week for the USPS to deliver the debit card and an additional week after that for the ATM/debit pin number to arrive.

Now that we've had the accounts open for a few weeks, I have to say that I like the parental monitoring and control that ING Direct provides. While the kid can independently make debit card purchases and ATM withdrawals, I like the automated emails that I get when my kids have made a debit card purchase that detail the dollar amount and location of the purchase. To quote Ronald Reagan, "trust but verify". :)

Finally, according to ING Direct the $25 bonus is added to the Money account after 35 days as long as one signature or PIN-based transaction is made within 30 days (not sure if this is after opening the account or activating the ATM card).

Former MBNA Bill Pay Choice finally getting the axe

When I predicted the death of the great MBNA billpay functionality when it was integrated into to the Bank of America family in 2006, I had no idea that my prediction would finally be correct four long years later.

I unfortunately received this letter from Bank of America last week:



So it looks like I will have to actually pay my mortgage and credit cards with actual cash from my bank accounts now. Thank you MBNA/Bank of America, it's been a great ride. Heck, I may even toss back a Schlitz Tall Boy in honor of Matthew Schlitz! :)

Time to lock in current CD rates (again)?

I'm closing in on the one year anniversary of my 15-month World Savings CD purchase and have been getting a bit skittish about replacing that rung on my CD ladder since a FOMC fed funds interest rate cut over the next month could take a bite out of future CD interest rates.

Even though my World Savings CD is due to mature in December, I decided to open a 5 year E-Loan CD @5.55% APY today, since I've had a good experience with my previous E-Loan CD purchase and they are currently offering one of the best rates for a 5 year CD.

No one really knows if and when the Federal Reserve will cut rates, but I'm trying to learn from the harsh lesson of 2004 when my cash was earning a paltry 2% in a money market account...

June 2007 Financial Asset Roundup

Here are my current financial assets as of the market close on June 12th, 2007:

Asset	May 2007	June 2007	Change
Checking	256	240	-16
Money Market	27,584	39,147	11,563
Savings Bonds	4,526	4,542	16
Treasury Bills	17,000	0	-17,000
CDs	57,743	57,986	243
Brokerage	93,886	103,441	9,555
401k	101,992	101,960	-32
Roth IRA	33,527	33,356	-171
SEP IRA	167,711	171,718	4,007
529 Savings	34,755	34,539	-216
Total Assets	$538,980	$546,929	+$7,949 (1.5%)

Keeping up with this blog has continued to fall by the wayside as work, family, and house-related projects have continued to eat into my free time, although I like the exercise of looking at my overall financial picture on a monthly basis. Despite the S&P 500 index being down about 1% since my last update, I actually increased my bottom line via additional equity distributions from my S Corp's 2006 profits combined with my initial 2007 SEP IRA contribution:

(chart courtesy of msn.com)

I am currently in a financial holding pattern as the yield of the 10 year Treasury has risen and the stock market has responded with increased volatility. If this trend continues, we may end up with buying opportunities in the form of a stock market correction and attractive rates on long-term fixed income instruments (come on Penfed!).

May 2007 Financial Asset Roundup

Here are my current financial assets as of the market close on May 11th, 2007:

Asset	Apr 2007	May 2007	Change
Checking	489	256	-233
Money Market	36,321	27,584	-8,737
Savings Bonds	4,509	4,526	17
Treasury Bills	0	17,000	17,000
CDs	57,515	57,743	228
Brokerage	91,275	93,886	2,611
401k	98,431	101,992	3,561
Roth IRA	32,613	33,527	914
SEP IRA	162,629	167,711	5,082
529 Savings	33,419	34,755	1,336
Total Assets	$517,201	$538,980	+$21,779 (4.2%)

Work, family obligations, and spending the bulk of my spare time on a minor bathroom remodel have really taken a huge bite out of my blogging time lately. Despite having my finances primarily on auto pilot since the last update, I still managed a nice gain since that time.

My gains over the past month can be attributed to an additional equity distribution from my S Corp's 2006 profits combined with another nice boost from the stock market (S&P 500 index was up almost 4%):

(chart courtesy of msn.com)

My only financial move of note was a folly-ridden purchase of 1 month T-Bills two weeks ago. My goals over the next month primarily focus on making a final 2006 equity distribution from my S Corp and then start working on my 2007 SEP IRA contributions. Baby steps...

May 3 Issue T-Bills: 4 Week Yield (4.79%) Nosedive

Since the HSBC Direct 6% APY promotion ended yesterday and reverted to 5.05% APY, I have been keeping an eye open for a place to stash some cash. Despite the trend of declining yields, I decided to go the 28 T-Bill route again since my after tax yield would have been approximately 5.3% with last week's auction.

So I plunked down my money and purchased a 28 day T-Bill today, my first T-Bill purchase since late November. The problem with that was that the investment rate on this Bill plummeted quite a bit more than I expected, dropping to a paltry 4.683%.

Using the new and improved handy T-bill tax equivalent yield spreadsheet (courtesy of the FatWallet discussion on Treasury Bills), I ironically found out that that my tax equivalent yield for this Bill will be 5.05%. So other than showing HSBC that I was willing to move my money elsewhere for a better rate, I basically gained nothing in terms of my return on investment. Live and learn, right?

HSBC Direct 6% APY promotion ends next week

Unfortunately, HSBC's 6% promotional rate ends on 4/30. Based on an email I received from HSBC, it looks like they will be falling back to their standard rate of 5.05% APY on 5/1. I've had my new cash parked at HSBC for about three months now, and it's time to think about where to park my cash after HSBC lowers its rate.

One option is the 5.3% APY GMAC Bank Money Market account, as reported by Bank Deals last week. Interesting timing, but I will be keeping my eye on the T-Bill auctions this week.

According to the new and improved T-Bill tax equivalent yield spreadsheet (courtesy of the FatWallet discussion on Treasury Bills), California residents could have had a tax-equivalent yield of at least 5.5% APY for T-Bills bought at auction last week. If that trend holds up next week, I think the U.S. Treasury will have the pleasure of borrowing my money.

April 2007 Series I Savings Bond update

The U.S. Bureau of Labor Statistics released the March 2007 Consumer Price Index (CPI-U) inflation data this morning, which increased by 0.91% since last month.

As I have mentioned before, now (along with the release of the September CPI-U) is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for April 2007 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.

Using the CPI-U data from September 2006 (202.9) and March 2007 (205.352) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for April 2007 issue I Bonds:


That would mean these bonds would earn a rate of 4.52% (using 1.40% fixed & 3.10 variable) for the first 6 months and 3.85% (using 1.40% fixed & 2.42% variable) for the second 6 months. Once again, I Bonds are not an attractive investment at this rate considering that several online savings accounts are currently earning 5%.

I will reassess I Bonds in October 2007 once the September 2007 CPI-U numbers are out. With the rising fuel and food prices we've been seeing lately, the I Bond inflation component could get a large bump later this year.

April 2007 Financial Asset Roundup

Here are my current financial assets as of the market close on April 9th, 2007:

Asset	Mar 2007	Apr 2007	Change
Checking	293	489	196
Money Market	36,015	36,321	306
Savings Bonds	4,493	4,509	16
Treasury Bills	0	0	0
CDs	57,133	57,515	382
Brokerage	87,064	91,275	4,211
401k	95,398	98,431	3,033
Roth IRA	31,740	32,613	873
SEP IRA	158,595	162,629	4,034
529 Savings	32,266	33,419	1153
Total Assets	$502,997	$517,201	+$14,204 (2.8%)

I had nice increase in the last month, since the stock market has produced a nice gain in the that time (S&P 500 index was up more than 2%):

(chart courtesy of msn.com)

I did have an increase in money outflows this month due to my snowblower purchase, a furniture purchase by Mrs. Frugalson, and the payments due with my state and federal income tax returns. I was able to minimize that somewhat by taking a distribution from my S Corp, but I will also be looking at the cost of replacing our 10 year old builder grade bathroom vanity and Formica counter top this month with a larger vanity and granite counter top. I will be able to do the labor myself, but I am still looking at about a $1,300 cost for materials.

$25 signup bonus for Fidelity 529 1.5% rewards American Express Card

FIA Card Services (the Bank of America MBNA card servicer) is offering a $25 statement credit for cardmembers that sign up for and use their 1.5% Fidelity 529 plan rewards American Express card.

To qualify for the $25 credit, call 866-836-6471 and mention priority code FAAWPV to apply for this card (this priority code does not appear to work for the online application at newcardonline.com). To obtain the $25 credit, you must apply for the card before July 31st, 2007 and make a purchase by October 31st, 2007.

While the 1.5% rewards bonus of this card is a step backward from the 2% rewards Mastercard that it replaced, it is still a nice compliment to cards offering 5% rewards on certain items like gasoline and grocery purchases.