About a year ago I decided to have my salary paid directly into a high interest online deposit account. I chose RaboBank (5% interest) and as it’s on online only bank I still need a 'normal' current account, in my case it's with NIB as my mortgage is with them. Also I have a BOI special bonus saver a/c with (6.75%) and credit card.
So I tried to use an online deposit account as my main working account instead of a current account as far as possible. So here's how I managed:
Getting paid
Supplied my employer with the Rabo account details, it didn’t matter that it's deposit account or an online bank. I used to get paid monthly but has the option of getting a mid month advance, so I opted for that (more interest earned!)
Cash from ATM machine (and writing a cheques)
Transfer money from Rabo to my NIB C/A with ATM card. This normally takes 1 or 2 business days, so i need to plan ahead a little. However I've a general idea how much cash I spend each week so I've set up a standing order online in Rabo to pay a certain amount at regular intervals into my NIB C/A.
Paying Credit cards
This can be done online from Rabo - you just need to enter the holding account of your credit card, it's usually found somewhere on your credit card statement, along with your credit card number as a reference. Takes approx 2 business days before it shows up in your credit card account.
Paying bills
I have all 'unavoidable' expenses such as ESB, telecom, health insurance, car insurance, etc as direct debit on my credit card, which I pay directly from Rabo. The free credit with the credit card means more money can stay in the deposit a/c earning interest. Of course the credit card is paid off in full each month!
Lodging Money.
To lodge a cheque – I can post it to Rabo or lodge with NIB and transfer fron NIB to Rabo online. I’ve also used Rabo's "money mover" to draw the money out of a BOI c/a.
Paying Mortgage
The mortgage is drawn down from my NIB c/a so I set up a monthlyrepeating direct debit in Rabo to pay the amount monthly into the NIB c/a. If the mortgage interest rate changes then all I need to do is to change the direct debit amount online in Rabo. Same for the BOI special bonus saver a/c. If you want to cannibalize you mortgate then you can set up a direct debit from Rabo to pay an amount directy in the NIB mortgage a/c (no need to go via the c/a).
Saving up for something
You can create a new Rabo deposit account yourself online specifically for whatever it is you are saving for. Set up a standing order to transfer a fixed amount you decide from the account you’re paid into. Change the amount anytime later if needed. The deposit account you created then builds up slowly and of course attracts the same 5% interest.
Summary
So it’s worked out well and I earn interest on any salary amount until I spend it. The amount you’ll save will of course depend on the average amount of money you can manage to keep in the deposit a/c over the month. Even if the amount of interest earned is small, you’re earning it every year from now on!
So I tried to use an online deposit account as my main working account instead of a current account as far as possible. So here's how I managed:
Getting paid
Supplied my employer with the Rabo account details, it didn’t matter that it's deposit account or an online bank. I used to get paid monthly but has the option of getting a mid month advance, so I opted for that (more interest earned!)
Cash from ATM machine (and writing a cheques)
Transfer money from Rabo to my NIB C/A with ATM card. This normally takes 1 or 2 business days, so i need to plan ahead a little. However I've a general idea how much cash I spend each week so I've set up a standing order online in Rabo to pay a certain amount at regular intervals into my NIB C/A.
Paying Credit cards
This can be done online from Rabo - you just need to enter the holding account of your credit card, it's usually found somewhere on your credit card statement, along with your credit card number as a reference. Takes approx 2 business days before it shows up in your credit card account.
Paying bills
I have all 'unavoidable' expenses such as ESB, telecom, health insurance, car insurance, etc as direct debit on my credit card, which I pay directly from Rabo. The free credit with the credit card means more money can stay in the deposit a/c earning interest. Of course the credit card is paid off in full each month!
Lodging Money.
To lodge a cheque – I can post it to Rabo or lodge with NIB and transfer fron NIB to Rabo online. I’ve also used Rabo's "money mover" to draw the money out of a BOI c/a.
Paying Mortgage
The mortgage is drawn down from my NIB c/a so I set up a monthlyrepeating direct debit in Rabo to pay the amount monthly into the NIB c/a. If the mortgage interest rate changes then all I need to do is to change the direct debit amount online in Rabo. Same for the BOI special bonus saver a/c. If you want to cannibalize you mortgate then you can set up a direct debit from Rabo to pay an amount directy in the NIB mortgage a/c (no need to go via the c/a).
Saving up for something
You can create a new Rabo deposit account yourself online specifically for whatever it is you are saving for. Set up a standing order to transfer a fixed amount you decide from the account you’re paid into. Change the amount anytime later if needed. The deposit account you created then builds up slowly and of course attracts the same 5% interest.
Summary
So it’s worked out well and I earn interest on any salary amount until I spend it. The amount you’ll save will of course depend on the average amount of money you can manage to keep in the deposit a/c over the month. Even if the amount of interest earned is small, you’re earning it every year from now on!