Girl Ninja and I are in the process of refinancing our mortgage. We locked in our refi rate at the end of January, which saved us 0.25% compared to today’s rates. Might not seem like much at first, but it works out to about $40 per month, every month, for the next 30 years. So yeah, I’m happy about that.
We should be lined up for closing sometime near the end of this month and as soon as closing wraps up, I plan to head over to a local credit union and take out that HELOC I was telling you about earlier. (I had to put that plan on pause since I didn’t want a line of credit on our home to screw up the chances of us being able to refinance easily.) I imagine the HELOC will provide us between $10,000 and $50,000 in immediately accessible liquidity.
The HELOC will essentially serve as our savings buffer.
For my entire personal-finance-loving life, I’ve heavily relied on my savings account. I opened up an ING high-yield savings account back in 2007 (back when I was earning around 3% on my cash) and it was the start of a beautiful relationship. I used that savings account to pay off my student loans in 2010, pay cash for a $20,000 new-to-us car in 2012, and drop $80,000 on a down payment in 2013.
I loved my savings account so much I had four of them.
- An “emergency fund” account
- A “future car savings” account
- A “vacation” account
- An “extra savings” account.
But now that I plan to use my taxable investment account as my primary source of saving, I can’t help but think…
Is there any good reason to keep my savings account?
I mean, I’ll be sure to keep a minimum of $10,000 cash on hand at all times in the event of an unforeseen issue (medical bill, job loss, home repair, etc), but why can’t I just keep that money in my checking account?
High-yield savings accounts used to be appealing, but for the better part of the last five years, they’ve paid virtually nothing. My current Capital One 360 savings account pays a pathetic 0.75% APY.
Or in other words, my $10,000 savings account only earns 75-ish dollars per year.
“THAT’S AWESOME.” – said no personal finance blogger ever.
So yeah, I think it’s about time I close out my last remaining savings account, and move that $10,000 to my one and only checking account with Wells Fargo, where it will reside for many years.
I guess the idea of not having a savings account just feels weird. It is as much a part of my personal finance DNA as this very blog.
- Will I be able to function without one?
- Is there any good reason to keep it around?
- Am I committing a PF sin by closing this account?
Only one way to find out. RIP savings account, you won’t be missed.