Step3 Prophet

CD redemption frustrations.

This is an open letter to USAA, but it could equally apply to any bank.

My first CD with USAA matured yesterday. I eagerly went to retrieve the funds before the 10 day renewal window expired. However, as I looked around the CD's overview page, I saw no option to automatically transfer that money to my checking account. I was getting frustrated until I finally understood that USAA requires you to pro actively contact them to transfer the money. Then the disappointment set in. I understand that this is a generally accepted and common banking practice, but I had come to expect more from USAA's banking and insurance branches.

A 10 day renewal window, an automatic renewal at the current interest rate, and personal contact to withdraw funds: the banking industry uses these little tricks to make it more difficult for a customer to retrieve their money. In an online world these obfuscations don't make sense. At the time of purchase I should be able to choose the final disposition of the account, whether it be automatic renewal or transfer to a checking/savings account. The website lets me choose or change the way dividends are handled, or renew with different terms in just a few clicks. Not being able to close a CD as easily as buying one just doesn't make sense and seems more like corporate avarice. Enclosed is a screen capture from the website. The page does not contain a single reference on how to get the money to another account(this is not a CD IRA). That is what really raised my ire. My hope is that USAA will at a minimum provide clear instructions to users on how to transfer the money, or ideally provide users the tools to arrange matters for themselves. Thank you for taking the time to read about my vexations.

I doubt USAA takes the time to read my blog, so I also submitted the letter through their website : ).

Why I like HSBC

  Having a good high interest savings account is important. Everyone needs an emergency fund with 3-6 months salary stashed away to  in case of ex ensive set backs like car repairs or job loss. Keeping that money in your checking account is a step away from spending it, and keeping it in your bank's savings account will mostly likely get you squat( .2 % at BoA, 1.5% if your bank is decent). Then there are the high yield savings accounts. In the following paragraphs I'm looking at institutions with minimum required balances of $100 or less and no monthly fees.
  HSBC consistently has one of the highest rates in the nation( currently 10th on bankrate.com) for savings/mm accounts. In fact, it's better than most CD's right now. I know it's not the highest, but that is always changing based on promotions (last year HSBC had a 6% promotion that I did quite well with) and changing banks every month creates too much hassle. Plus you lose interest while the money is in transit. Sadly, the current rate is only 3.05% now, but the top rate is 3.5% for savings accounts, so I'm not to far off. The gap is almost getting to the point to where I will investigate other accounts. ING's orange account is another very popular high interest savings account (I have an ING account as well) but it consistently lags HSBC. The gap is not that great now, but when interest rates where better it was over 0.5% difference.
  Having said that, 3.05 is still a good rate for an account in which you maintain almost instant access to your funds. There are many other higher performing investments, but none that are guaranteed and in which you can get your money back at any time. They are FDIC insured, and one of the largest banks in the US.
    You can set up automatic recurring transfers to help grow you savings. The daily transfer limit is $300,000, so I'm no where near coming close to that and there are no fees for transferring money. If you need it, the monthly transfer limit is 2 million. Maybe one day I'll be pushing it.
  Security is another feature I like about them. There is an extra step in the login process to enter a different password using your mouse in addition to the standard type in your password under your user name system. This helps foil keystroke logging programs. HSBC lets you select your own user name and password, which I prefer. ING has the stupid customer number thing that I have to look up every time I login.

Over all, I've been using them for greater than a year now with no hassels and good returns.

www.hsbcdirect.com