A pleasant money problem

May 18, 2011 8:53 PM

The good news: I've been awarded money. The question: I'm trying to figure out how best to keep it separate from my personal money.

My current financial situation: I have one bank account with a debit card.

What changed: I was awarded a chunk of money that I'll be getting a hold of in a bit to live off for a while.

The issue: my personal money and the award money need to stay separate. I can't spend personal money on things the award money is supposed to go to, and I can't spend award money on personal things.

Further complication: I'm going to be traveling on the award money, which means I'm worried about security. A friend recently had their bank account hacked and several thousand stolen. They got the bank to refund the money, but it was still a mess. I had the idea of having two bank accounts, one in which I keep the bulk of the award money, and the other into which I periodically slide small chunks of the award money and spend out of. That way if that account gets hacked I only lose in the neighborhood of a few hundred dollars instead of all of the award money.

The question: what would be the best way to do all of this? I'm open either to suggestions for making my plan work or for other ways of doing things. My current bank account is with BOA.

posted by resiny to Work & Money (7 answers total)

Open a savings account at ING. Link it to your main BOA checking account or, for added bookkeeping clarity, a new checking account at BOA or elsewhere. You can then transfer money at will between then, while keeping the bulk of the award money isolated in ING.
posted by Tomorrowful at 8:55 PM on May 18, 2011 [2 favorites]

Get yourself a separate credit card (with a different account number) for use when you're travelling or when you're spending your reward money. At the end of the month, reconcile the charges with the receipts (which you've kept) and then pay off the entire total from your reward money, which is held in a separate high-interest (ideally) savings account or a certificate of deposit that permits withdrawals. A credit card typically (at least in this country) has limited liability in case of theft or loss.

Besides, if you're travelling, it's always a good plan to have at least two credit cards in case you run into a snafu with one. In this case if you've already got a Mastercard (for example) get a Visa (or vice versa).
posted by sardonyx at 9:05 PM on May 18, 2011 [1 favorite]

i bank with BofA. i have transfered money to another person with a BofA account. if you open another account with BofA, you can transfer money between BofA accounts free and easily.
posted by violetk at 9:29 PM on May 18, 2011

Seconding the idea of opening a savings account at ING Direct. Here's the link. You can link your BofA account with your ING account, and then easily transfer money between them whenever you need.

If you want, you can also open a checking account at ING Direct, called "electric orange," which will give you a separate debit card for your award money.

Note that transfers from your external checking account to the ING savings account take a long time to become available for withdrawal, about 7 business days - 2 days to go through the ACH system, and 5 days hold time by ING. Transfers to the ING checking account take a bit shorter, about 4 business days - 2 days for ACH and 2 days hold time. However, you can set up an "automatic savings plan" to have these transfers take place automatically so that money is consistently available on a schedule that works for you.
posted by danceswithlight at 10:49 PM on May 18, 2011 [1 favorite]

I like sardonyx's plan, but if you can't get yourself another credit card for credit reasons: I would just open a second account for award money at your bank with a second debit card and just use that one when it's appropriate to. That way you have one statement with all of your award expenses on it without having to sort through receipts or remember anything.
posted by bleep at 2:57 AM on May 19, 2011 [2 favorites]

Are you eligible for an account at USAA? That might be a good bank to put your award money in, because they don't charge for using overseas ATM's (or any bank ATM in the US, and reimburse you if the ATM you use charges a fee), and they do fast transfers to and from non-USAA accounts. I have USAA and Bank of America, and the money is almost always transferred 1-2 days after I request it.
posted by apricot at 8:29 AM on May 19, 2011

Second the USAA recommendation. They have AMAZING customer service,even if (especially if) you are overseas.
posted by mrfuga0 at 2:44 PM on May 19, 2011