Save For Specific Goals With Your Own Online Piggy Bank

April 22, 2008

You may be expecting a review of the new online service SmartyPig. Well, that review is in-progress, but while doing my research I was reminded of an alternate way to create your own online “piggy bank”. Remember how you’d actually have to save your quarters to buy what you wanted? Oh, the good old days…

Let’s say you want to set up multiple “baskets” or “piggy banks” of money for specific goals. Maybe you have

• an ongoing pet medical fund to which you add to regularly instead of paying for insurance ($50 per month?)
• an ongoing car maintenance/repair fund (I need one of these)
• a summer vacation fund (goal: $1,000?)
• a Christmas fund
• …or that all-purpose emergency fund!

You want separate balances and accounting for each account to keep things neat, but you don’t want to open up 3 new accounts at 3 different banks. The good news is that this can all be done with ING Direct - they let you easily and instantly create multiple savings accounts that have their own balance and nickname. No credit checks, no applications, and it earns interest. Here’s how:

1) First, you’ll need an ING Direct account. If you have one already, you’re all set. If you opened one before and it got closed to due low balance or inactivity, you can have them re-open it by calling 1-888-ING-0727 (or you can login and do it). If you are a new customer, you can earn a $25 sign-up bonus here by opening with at least $250.

2) Open up an additional savings account (or several!). It’s not all that complicated, but it still confused me initially so I broke down the steps below with screen-by-screen walkthrough. Click on the thumbnail images for a full size screenshots.

a)Log in first, and then click on “Open an account” in the top left corner.	b) Click on “Orange Savings Account”
c) Scroll down and click on “Open Now”	d) Pick the correct ownership title
e) Pick a nickname, funding source, and initial deposit amount. I chose “Pet Insurance Fund”	f) Read T&C’s and confirm
g) Print out confirmation page	h) Go back to main page and bask in the glow of your newly created account

3) Set up an automatic savings plan
Although you can schedule manual transfers, why not make it easy on yourself and set up an automated transfer schedule? You can set a fixed amount of automatic withdrawals if you have a specific goal ($100/month x 1 year = $1,200 = HDTV), or you can make it repeat indefinitely (great for our often-used pet fund).

And you’re done! You can make as many of these sub-account as you like. The cool thing is you can make withdrawals at any time (max 6 per month), and there are no minimum balances or fees. The interest rate at 3.0% APY isn’t the absolute highest, but comparatively it’s no longer that far behind other similar banks.

(FYI - I was talking with my sister about this and she told me she didn’t use her ING Direct account anymore. When I asked why, she said it was not because the interest rate wasn’t high enough, it was simply because they made you log in with your customer number, and she would never remember it! I just wanted to point out that now you can pick your own username (like “janedoe444″). Use it carefully though, as your password is still just a 4-digit PIN.)

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