SmartyPig.com is dropping its interest rate down to 0.70% APY

I have been using SmartyPig.com as a third choice for my cash, with their current interest rate at 1.10% APY, but as of next Friday they are dropping that rate to 0.70% APY. Ouch. I may not move my cash immediately, but I'll certainly start looking around. OTOH, a lot of my cash in that account is reserved for my January estimated income taxes, my 2011 retirement contributions, and my monthly expenses for the next few months while I'm looking for new work, it may not make much sense for me to shuffle that cash anyway.

 

My main two choices for cash, where I keep my main Rainy Day fund, are a bank in Texas that pays 2.27% APY and a bank in Ohio that pays 2.01% APY. I found those two using CheckingFinder.com. Currently, for my zip code, CheckingFinder.com lists a bank in Binghamton, NY paying 1.50% APY and a bank in Toledo, IA paying 1.51% APY. Unfortunately, you need to use the debit card 10 to 15 times every monthly statement cycle to get these rates, so adding a third bank is a little inconvenient for me.

 

Another choice for me is Ally Bank, which is currently paying 0.89% APY for savings. I already have an account, but with other a minimal amount since it is currently my fourth best rate. I suspect that I'll start using this account more after SmartyPig.com drops its rate. You can get a 2-year CD from Ally that pays 1.18%, but my needs are for cash that I may need to use over the next three to twelve months, so a CD is not appropriate.

 

At these low rates, it isn't really worth a lot of my time to be doing much shuffling of cash between accounts. I suspect that a year from now I may not bother if rates ratchet down at the pace that they have been over the past eighteen months.

-- Jack Krupansky