This lends itself to the question, “What are my needs?” What do I really need out of my bank accounts? I have identified the following as needs from my bank accounts:

1. High interest rate on excess cash held for emergencies.
2. Above average interest rate on cash held in checking account for paying regular expenses.
3. Ability to write paper checks occasionally.
4. Ability to make occasional deposits of checks and cash.
5. Fee-free ATM access.
6. Ability to make small fee-free transfers to external accounts to simulate direct deposits.
7. Opportunities to refer new customers for referral bonuses.

Our household currently has 12 open bank accounts, and it looks like our needs can be met by just six or seven of those. The winners (if you want to call them that) are:

• FNBO Direct Online Savings - Meets need #1. Not a fancy website by any means, but at 3.85% APY it still has a great interest rate for an FDIC-insured account. 
• Presidential Interest Plus Checking - Meets needs #2 and #3. The account has an above average 2.75% APY and unlimited check writing. The rate won’t set the world on fire, but I don’t plan to leave that much in the account anyway.
• Bank of America My Access Checking - Meets needs #4 and #5. There are several branches and ATMs in my area (one in the lobby of my office).
• Peoples Trust FCU Savings - Meets need #6. This account doesn’t limit the number of external accounts you can link and only limits the dollar amounts you can transfer out. This is great for transferring $25 or $50 to simulate a direct deposit when needed to avoid monthly service charges or fulfill the terms of a promotional bonus offer.
• ING Direct Orange Savings (2 – one for both my wife and I) - Meets need #7. Each account can earn up to $500 in referral bonuses ($250 each for the Orange Savings and Electric Orange Checking products). This is the source of the ING Bonus Referral Links I have posted on this blog and are the way I cover hosting costs.

Who are the losers in this exercise? Here is the list of accounts to be closed:

• Chase Free Checking – Very similar to my Bank of America Checking account, but BofA just has more convenient locations.
• Chase Business Checking – Opened for the promotional bonus but I have no real need for the account.
• Chase Business Savings – Same as Chase Business Checking: no need for the account.
• HSBC Online Savings – Oh HSBC, how far you’ve fallen! You were once the leader, but unfortunately not anymore. That combined with the crappy customer service I got when trying to close by HSBC checking account makes me think it is time to end this relationship. It’s not you, it’s me. No wait – actually it is you. Sorry!
• Peoples Trust FCU Premier Checking – I opened the account when I worked for Shell and this was still Shell Employees FCU. Then the account was great because the branch was directly below my building. Now I work somewhere else so the few locations PTFCU has aren’t convenient. And since my basic checking needs are met by my BofA account, there is no reason to keep this account open.

On the bubble… 

• Presidential Premier Savings - This account was once the perfect companion to my Presidential Interest Plus Checking, but now the interest rate is below that of FNBO Direct and the limit of $35,000 on deposits earning the stated rate kind of cramps my style. I may keep it open since I can do instant transfers between it and the Presidential Checking account and it does earn a higher rate than the checking account, but most of my reserve cash will be at FNBO. I’m still undecided.

According to the thread over at Fatwallet Finance, as of today (Feb 4 2008), the prize goes to OneUnited Bank’s Unity Gold E-Savings Account at 5.15% APY, although it requires a minimum balance 0f $1000 to earn interest. Of the big names, here are the current interest rates as of this post:

• FNBO Direct: 4.30% APY
• ING Direct: 3.40% APY ($25 bonus for new customers with $250 opening deposit with referral link here)
• Emigrant Direct: 4.05% APY
• E-Loan Savings: 3.75% APY ($5000 min)
• HSBC Direct: 3.55% APY
• ETrade Complete Savings: 4.40% APY
• Presidential Premier Savings: 3.50% APY
• WTDirect: 4.10% APY (min $10,000) – updated 2/6/08

I’ve already discussed how all of rate cuts are killing the app-o-rama game, and with savings rates so low it is making less sense to keep extra cash in savings. We will likely start paying down our mortgage with our excess cash, although we will keep some in savings for emergencies. I may also apply for a HELOC in the unlikely event we need access to the cash we apply towards the mortgage later on.

Chase – I opened a new Chase personal credit card account in October and did a balance transfer to my Capital One account, where the promotional rate was about to expire. After a couple of weeks, the account was no longer available for viewing on my Chase Online page and over a month past the opening date I had yet to receive a statement. I called to find out that a fraud alert had been placed on my account (although no one from Chase ever called to tell me that) and I had to basically re-answer all of the questions from my application to verify that it is indeed a legitimate account. Thankfully everything is fixed now, but it is still a royal PITA. Time wasted: 22 minutes.

Capital One - Despite calling twice to verify that no finance charge would be assessed on my promotional balance if I paid it off before November 1, on my latest statement the clowns at Capital One proceeded to charge be a finance charge on the balance I paid off on October 23. I called up customer service and waited on hold for a while for the first line rep, who immediately declared he could do nothing for me and I would need to talk to an account manager. After waiting on hold for the account manager for a while longer, she comes on the line and I repeat my story and she looks at the account and agrees that an adjustment is needed almost immediately. Time wasted: 25 minutes.

HSBC – Reviewing all of my accounts in Yodlee, I noted that my HSBC Checking which I closed last month had been charged a service fee of $12 for falling below the minimum balance requirement. I call up HSBC and after navigating their Labyrinth of a phone tree menu I finally talk to a person and explain the situation twice. She reviews the account and noted the account had been requested closed last month and manually closed the account and submitted the credit to reverse the finance charge. Time wasted: 9 minutes.

In total I spent 54 minutes on the phone correcting errors made by my banks. This isn’t including the time I spent to pull up my notes on the accounts. I also didn’t even do anything with a bank by mail deposit that isn’t showing up on my Presidential Checking account, although at this point I can’t be sure if it is an error by the bank or the postal service lost the deposit in transit.

E-Loan Savings – I signed up for this one last year when they had the highest interest rate, but they have since dropped their rate. The interest rate drop along with a bad customer service experience trying to change my externally linked account make this an easy one to close. I called the 800 number and was told I had to submit a request through the website. I submitted the online request and they closed the account without issue.

EmigrantDirect – Another one that once had the highest interest rate, but has since fallen out of relevance. That along with their crappy website adds this one to the list. Same as ELoan, the 800 number instructed me to submit an online request, and upon submitting the online request they closed the account without issue.

HSBC Interest Checking – I only opened this with $1 for a $75 bonus. Except for the bonus, this account is crap. We are past the 180 days I have to keep it open to keep the bonus, so this account is gone. I sent an email through their Bankmail function requesting the account be closed and the funds be transferred to my HSBC Online Savings. It took several days, but they eventually closed the account as directed and transferred the funds to my savings account.
Citi Ultimate Savings – Another one opened with $1, this time for a $50 bonus. The interest rate is lower than competitors, so bye-bye Citibank! I couldn’t find my online user ID and password, so I just called the 800 number from the confirmation when I opened the account. I talked to the rep for about five minutes to get the account closed and a check sent to the house for the balance.

I know some people are asking why I bother closing the accounts that have no minimum balance requirement or fees, but I am just tried of having all of these abandoned accounts out there. It is all about simplification. On the off chance any of these accounts become the new rate leader, I can always apply for a new account if I really wanted to.

These four accounts are just the beginning. As time permits over the next several weeks I plan to go through my entire portfolio of accounts and analyze their role in our family’s finances, which of course I will chronicle here for everyone’s review and amusement. I really want to nail down the pros and cons of each account, whether its purpose could be better served by a different product, a justification for keeping the account and ultimately a decision on whether to put it to sleep. Stay tuned!