Saving $$ on Vacation, Part 3September 28th, 2007 at 12:59 pm
Tip #3 for saving money on vacation: Don't tune out from the news when your on vacation.
I had been requesting for some time that Mr. Bean take the majority of our savings account money and move it into a CD (yes, we have cash in other accounts for emergencies). The money was in a 4.5% APR Electric Orange Savings. Although ING Savings rates have been fairly stable, I had watched the ING CD rates fall from 5.3% to 5.15% in recent months and feared more drops were on the horizon.
I also knew from experience that if you set up a CD online on a non-business and then the bank drops interest rates on the next business day, you get the lower rate. This happened to me when ING dropped their CD rates from 5.3 to 5.15%. I set everything up under the assumption and advertisement of 5.3%, but by the time everything went through the rate was 5/15% and that was the rate my money was locked in at.
The September Fed meeting occurred the Tuesday we were on vacation. Sunday night I asked if he had opened the CD. He had not. From watching the news and reading blogs, I knew an interest rate decrease was likely from the Fed and banks would likely follow suit and drop their savings rates, too.
So, I pulled out the laptop and we did it together. At the time, ING was offered 5.25% on a CD if you transferred the money from an outside account. We briefly contemplated transferring the money to our checking account and then transferring it back into the 5.25% CD, but I knew we couldn't do all those transfers before the Fed meeting. ING's offer for a 5.25% CD had just been posted, so I doubted they would pull the offer if the Fed dropped interest rates. I was really drawn to trying to get that 5.25% rate, but ultimately decided to go for the bird in the hand and open the 5.15% CD from internal money.
Shortly after the Fed meeting, ING pulled the offer on a 5.25% CD if the money is transferred from an external account. In addition they dropped the 12 month CD rate to 4.9%, and their savings account rate fell to 4.3%.
Even though were were on vacation, it paid to be aware of current events. We locked in the 5.15% yield on a 12 month-- just in the knick of time.