Post # 1
My parents and FI’s parents are basically splitting the wedding costs 50/50. My parents want to physically give us the money and have us put it into some kind of account, where we can use the money as we need it. We want to open a new bank account for the money, as it’s a sizeable sum (around 25K) and we don’t want it to be mixed in with our other money/savings.
What kind of account should we open for the money? It’s money we’ll have to access over the next 10 months, so a traditional savings account probably doesn’t make sense. Should we just open a regular checking account? Any recommendations for banks or account types would be really helpful! Right now, we have Bank of America, but we’re not blown away by it. We’d also like the security of keeping this money out of BoA, as it’ll totally be separate that way.
ETA: Ideally, we’d like an account with no montly fees!
Post # 2
if you need access to it regularly, a checking or savings account might be your only way. but you don’t need to put the whole thing in. you could say put $10k in savings if you need immediate access to that and the other $15k in a CD. but check the terms. it might be a 12 month CD or a 15 month CD.
ask a financial manager at your branch to make suggestions based on your needs.
Post # 3
annb9: Speak to the financial advisor at a couple of banks to get recommendations on what account will give you the best return for the money while it is in your posession.
If you open a savings account, you can always electronically transfer the needed amount from the savings to your checking then write a check from your regular checking account.
Post # 4
annb9: Don’t do a CD or money market or any other investment account that will lock up your money. You will need constant access to it. Do a plain old checking account. Any money left over you can look at moving into a high-yield savings account but 10 months, during which time you will make numerous withdrawals and returns, is too short of a period to bother with a savings account. Interest rates on traditional savings accounts are not much better than checking accounts anyway.
Just make sure to go with a major bank where the money is FDIC insured – Chase, Citibank, Wells Fargo, PNC, any of these are good options. With a balance of $25K, you should not have any fees at any of these places. Most banks only require a $1,000 minimum in checking accounts to avoid fees, some are even less than that.
I like PNC Bank (if you are on the east coast) because they offer a checking account with a card that can be used as either debit or credit. That way you can still pay your vendors on a credit card (which offers more protection for you) instead of giving everyone cash. If you don’t have PNC in your area, I bet some of the other major banks offer a similiar set up, or you could open up a credit card that has rewards in conjunction with the checking account. Use the checking account to pay off the credit card every month. We did this with a card that earned airline points, and now have enough points to get free flights home for the holidays as a result of all the wedding spending.
Post # 5
Savings accounts usually have a limit on the number of withdrawals/payments you can have per month, so I’d recommend a checking account for sure because as you get closer you will be making a lot of payments and spending a lot of money in a short amount of time and you don’t want to get fined for that.
Post # 6
- Wedding: September 2014 - SPRING VALLEY COUNTRY CLUB
What we decided was best was to have a joint checking and savings just for our wedding cost. We each deposit into that account and it’s been working.
Post # 7
All of my savings accounts are with Capital One 360, formerly ING Direct. I have several different accounts set up for various reasons and just transfer money to my account when I need to use it.
Post # 8
We put our money into an interest bearing checking account and also opened a savings account (this will be our joint accounts after marriage). The money we didn’t need right away went into the savings account. I agree with others who said that you will most likely be drawing on that money throughout the next couple of months, so I wouldn’t put it where you can’t get access to it right away (without a fee). And to avoid any fees on our checking account, we had to have direct deposit (which we did put a portion of our regular pay into that account) and also used the check card when submitting down payments to our vendors.
Post # 9
Thanks, everyone! A lot of good ideas to think about and research.
Post # 10
Pay for as many of your wedding purchases as you can with a credit card; this will give you significant consumer protections over and above what you get when you pay with a check. For example, if your venue or caterer goes bankrupt and out of business, if you’ve paid with a check, you’re basically SOL; you get in line behind all of the other creditors, and maybe in a year or two after all the bankruptcy proceedings are done, you’ll get a few pennies on the dollar for your lost deposits. If you pay with a credit card, all you have to do is dispute the charge; while some cards will require you wait till after the date of the contracted service before they will give you your money back (because even if the company is bankrupt, they have not failed to deliver the service if the service is not due yet), you will still get all of your losses back.
Keep in mind that a debit card/check card does not have the same protections as a proper credit card, even if it has the visa/mastercard logo on it. Paying with a debit card is basically the same as paying with a check: you do not have as much support for a disputed charge as you do with a credit card.
You would then use the lump of cash to pay off the credit card.
So if you have a credit card already and have a fairly good chunk of unused credit, you can shop around for a bank based on fees and convenience. You would probably want a checking account rather than a savings account, and you will probably be making only a couple of deposits, which may have an impact on what kind of fees you pay. Many banks give you fee-free checking if you are making 2 deposits a month, so factor that in. The interest rate on savings accounts is too low these days to make a short-term account worht persuing; if you manage to get a full 1% interest, you’ll only get $250 if you leave that $25k parked for a full year, and if the money won’t be there for a full year, that amount obviously goes down— so it may not be worth losing the convenience of a checking account just for a couple hundred dollars or less.
If you don’t have a credit card, then use the $25k as leverage and open a checking account with a bank who is willing to give you a credit card in the bargain. Some banks will be very generous with their credit approvals if you have a high-balance checking account with them. Credit unions are great for this.
Post # 11
If you trust yourself to be responsible I would put everything on a skymiles reward credit card and pay it off in full religiously. 25k could get you international honeymoon flights and then some.