As you can see from my monthly balance sheet, I have a lot of cash sitting in my saving accounts. I put majority of the money in VirtualBank, which earns me an APY or 2.15%.

Of course, you can expect I am always checking new avenues to get more bangs for the buck. Recently I checked the Money Market Rate page at BankRate, I saw two banks that are offering an APY of 2.20%: ING Direct and CapitalOne.

Both ING Direct and CapitalOne are pretty reputable names in the business. ING Direct is backed by ING, a famous European bank with a long history. CapitalOne, which made its name from subprime credit cards, is now transforming itself to an all-around financial product provider.

You may say it is not much difference between an APY of 2.15% and an APY of 2.20%. It is not. After all, for every $10,000 of deposits, it's only a difference of five bucks every year. If you already park most of your emergency money at VirtualBank like I do, I also don't suggest you move the money -- if it takes seven days to move the money between two banks, you need almost 9 months to make up the loss of interests.

Nevertheless, I think it does not hurt to open your accounts at both institutions. Now that Fed is raising Fed rates every month or two, it is fair to speculate banks will raise saving rates down the road to compete for the business, and who knows if one of today's leaders will not raise rates again pretty soon. Having an existing account with them will allow easier money movement

Both ING Direct and CapitalOne only require $1 as initial deposit to open an account, and there is no maintenance fee whatsoever. If you want to open an account, I appreciate if you can follow the links below, which will get me a small referral bonus. You have nothing to lose but only great financial products to grow your money!

ING Direct

VirtualBank

CapitalOne

Follow This Link (Disclosure: No Referral Bonus for Me)

[2/28/05 Update: Both VirtualBank and ING Direct have raised the APY to 2.60%]