Weekend Linkage: Rate Chasing, Roth IRAs and Automated Savings

by Jason Unger

Each week, there are tons of great posts from across the Personal Finance blogosphere that you may not have seen.

In keeping up with this site, I barely have time to read all the articles I’d want.

To end off the week, I’ll try and highlight some of the stories I’ve seen that will help your bottom line.

In Three Simple Ways to Automatically Increase Your Savings, Suburban Dollar presents easy steps to have more money without doing any more work.

He suggests:

  • Direct Deposit
  • Automatic Debits
  • Flexible Spending Account

I use all three of these, and they’ve contributed to the complete Automatic Finances system.

Over at Prime Time Money, PT goes through the process of Opening a Roth IRA for the First Time. He’s using Vanguard for his Roths, investing in index funds for his retirement.

Flexo at Consumerism Commentary asks his readers: Are You a High-Yield Interest Rate Chaser?

He lays out 5 reasons why you shouldn’t rate chase:

  1. There is more to a savings account than the interest rate.
  2. You lose interest income in the transfer.
  3. Banks will often hold your deposits for several days.
  4. Past performance is not an indicator of future results.
  5. Most people don?t transfer enough cash from bank to bank to make the effort worthwhile.

Simply put, I agree. That’s why I recommend using ING Direct, even if the rate is not the highest available. There are other reasons — like the ones Flexo mentioned — to not go with the highest rate.

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