Wednesday, March 10, 2010

Trying for 3.51% APY high-interest checking

I posted on Monday about for finding community banks offering FDIC-insured high-interest checking (2-4%) and just this morning I took the plunge and opened a new bank checking account through their web site for a community bank in Texas. I still need in get the bank's welcome kit in the mail and send back the signature card and other documents, but within a few weeks I should be on my way to earning 3.51% APY on a bank checking account. What could be more exciting (in banking)?

I did see a bank offering 4.09% on Monday, but they were no longer listed this morning. 3.51% APY was the highest listed rate for my zip code this morning. Still, this is a fantastic rate compared to just about anything else available.

First I had to call the customer service number to clarify exactly what qualified as an "automatic payment". I make several payments each month by ACH debit from the web sites of my electric company, telephone/Internet provider, and credit card, but they are all "manual", so I wasn't sure if they qualified. Customer service picked up quite promptly and indicated that each bank had its own quirky rules, so it would be best to speak directly to the individual bank. I had already selected my preferred bank from their list and customer service gave me that bank's direct number. The bank picked up promptly, redirected my call and quickly answered my question, stating clearly that to get the special rate I needed "one ACH debit or credit" each month. Many consumers see ACH debits as part of "automatic bill payment" and only overly-cautious people such as me want to manually check my bill before it gets paid.

That so-called "automatic payment" was the worrisome "qualification" for me, but now I know that it is a no-brainer. There were three other specific qualifications for this particular bank (which many of the listed banks also had) in order to get the juicy 3.51% APY rate:

  • Minimum of 12 debit-card purchases each month (does not include ATM withdrawals). No minimum, so breakfast, lunch, snacks, fast food, etc. easily satisfy this requirement without impinging on my desire to use my 2% cashback credit card for larger purchases.
  • Must agree to receive e-statements rather than paper statements. No problem.
  • Must sign on to the online banking web site at least once a month. No problem since I believe in checking my credit card and other financial accounts at least one if not twice a week.
  • And that requirement for at least one ACH debit or credit each month.

Note: Some of the banks also have a bill-pay requirement, but this bank did not.

The sign-up process requested my current bank checking routing and account number so that the initial funding can be done via an ACH debit. This funding will not actually occur until after the bank receives the signed signature card and other sign-up documents needed to satisfy government regulations. My chosen bank bad a $100 minimum initial deposit. I chose $250 for the sign-up deposit. I intend to put a moderate pile of cash in the account to earn that 3.51% APY ASAP, but I want to see that the account gets all set up and working as advertised before committing more cash.

The sign-up process also asks a serious questions about your financial history similar to those you see when requesting your credit history to verify your identity. Usually not a problem, but having a copy of your credit history handy couldn't hurt. Some people claim to have had difficulty signing up due to questions about things they had forgotten or gotten confused about.

The bank is HCSB in Plainview, Texas. They have been around since 1934, formerly operating as "Hill Country State Bank."

Some other info on the account:

  • 3.51% APY applies to the first $25,000.
  • Rate is 1.51% APY on balance above $25,000. Still quite decent compared to... most other banks.
  • Rate is 0.05% APY if qualifications are not met in a given month. Still better than Fidelity. Some listed banks have base rates of 0.1% or even 0.2%, but I have no intentions of ever being in a position to get that rate.
  • No minumum balance.
  • No monthly fees.
  • Unlimited checks. [Note: I forgot to ask whether the check order is free or not.]
  • Refund of ATM feeds up to $20 per month.

So, now, I am just impatiently waiting for the paperwork to arrive via pony express.

In practice, the way I will use this account is in tandem with my local TD Bank account. I will deposit checks in TD Bank and then ACH transfer the bulk of the cash to HCSB. I'll write checks against HCSB. I'll keep a modest balance in TD Bank for "just in case" contingencies. I think I'll use HCSB for ATM withdrawals, but I could use TD as well.

-- Jack Krupansky

Sunday, March 07, 2010

David Gelernter: Time to Start Taking the Internet Seriously

I just finished reading an essay on Edge by noted computer scientist David Gelernter entitled "Time to Start Taking the Internet Seriously" which basically argues for his concept of lifestreams as a better model for publishing and accessing information than today's web model. Rather that organizing information in a spatial form, he recommends that we think about and organize information along the time dimension. As he puts it:

The Internet's future is not Web 2.0 or 200.0 but the post-Web, where time instead of space is the organizing principle -- instead of many stained-glass windows, instead of information laid out in space, like vegetables at a market -- the Net will be many streams of information flowing through time. The Cybersphere as a whole equals every stream in the Internet blended together: the whole world telling its own story.

He proceeds to describe the nature of the problem and how lifestreams will address it:

13. The traditional web site is static, but the Internet specializes in flowing, changing information. The "velocity of information" is important -- not just the facts but their rate and direction of flow. Today's typical website is like a stained glass window, many small panels leaded together. There is no good way to change stained glass, and no one expects it to change. So it's not surprising that the Internet is now being overtaken by a different kind of cyberstructure.

14. The structure called a cyberstream or lifestream is better suited to the Internet than a conventional website because it shows information-in-motion, a rushing flow of fresh information instead of a stagnant pool.

15. Every month, more and more information surges through the Cybersphere in lifestreams — some called blogs, "feeds," "activity streams," "event streams," Twitter streams. All these streams are specialized examples of the cyberstructure we called a lifestream in the mid-1990s: a stream made of all sorts of digital documents, arranged by time of creation or arrival, changing in realtime; a stream you can focus and thus turn into a different stream; a stream with a past, present and future. The future flows through the present into the past at the speed of time.

16. Your own information -- all your communications, documents, photos, videos -- including "cross network" information -- phone calls, voice messages, text messages -- will be stored in a lifestream in the Cloud.

17. There is no clear way to blend two standard websites together, but it's obvious how to blend two streams. You simply shuffle them together like two decks of cards, maintaining time-order -- putting the earlier document first. Blending is important because we must be able to add and subtract in the Cybersphere. We add streams together by blending them. Because it's easy to blend any group of streams, it's easy to integrate stream-structured sites so we can treat the group as a unit, not as many separate points of activity; and integration is important to solving the information overload problem. We subtract streams by searching or focusing. Searching a stream for "snow" means that I subtract every stream-element that doesn't deal with snow. Subtracting the "not snow" stream from the mainstream yields a "snow" stream. Blending streams and searching them are the addition and subtraction of the new Cybersphere.

18. Nearly all flowing, changing information on the Internet will move through streams. You will be able to gather and blend together all the streams that interest you. Streams of world news or news about your friends, streams that describe prices or auctions or new findings in any field, or traffic, weather, markets -- they will all be gathered and blended into one stream. Then your own personal lifestream will be added. The result is your mainstream: different from all others; a fast-moving river of all the digital information you care about.

In short:

To accomplish this, we merely need to turn the whole Cybersphere on its side, so that time instead of space is the main axis.

There is much more to his model for information in the "Cybersphere", but time-based lifestreams are his core starting point.

-- Jack Krupansky