My last post about my banking situation got a little press. At the bottom of a Wall Street Journal article about ATM crime, there were a set of links to two blogs that they thought referred to that article — mine and someone else’s. Yikes!

That post ended up getting a lot of visitors from government IP blocks from around the world. Even the IRS and Wells Fargo paid that article a visit, the latter filling me with a sense of pure awesome.

My Capital One MMA is open and functional and I’ve already deposited some money into it from PayPal. I have to wait 10 days before accessing it, but I’m still just testing out their service.

PayPal also has an MMA account, but I never bothered to read into it since my money passes through them so fast it wouldn’t really make much difference. Curiosity got the best of me and I discovered that their MMA simply uses the balance that I have in my account and not some completely separate service. So when someone pays me with PayPal, the money collects 5.01% interest before I shift it into my Capital One MMA that collects 4.55% interest. From there I can withdraw it using my soon-to-arrive ATM card without a single damn fee.

So basically I’ve gone from paying hundreds of dollars in bank fees all the way down to paying $0 in fees and making money in the process. Hot damn!

You may ask, “Mr. Brian, why don’t you just keep your money with PayPal if their interest rate is so high?” Well there are a few reasons:

1. They are not FDIC insured. If they go out of business, my money would go with them.
2. They will lock down your entire account if a payer complains about sending you money for any reason with no recourse but to wait up to 180 days while it works through their system. It’s never happened to me, but it has happened to many honest users and is a risk of using their service. Even if they unlock the funds, you’ll have lost upwards of 6 months of interest.
3. When I receive money from a credit card, they take out 2.9% of the total + $0.30, so the 5.01% rate isn’t so amazingly high. Capital One offers a better rate and I don’t have to worry about downside #2.

So basically my whole 2008 financial plan is this:

1. Close all of my Wells Fargo accounts and leave a sack of burning poo on their doorstep.
2. Continue depositing money into my Capital One MMA a little at a time until I get my ATM card and can use it fully.
3. Get a Capital One credit card to use for going to restaurants, buying clothes, etc. By sticking with the same company, I can pay off my monthly balance each month directly from my MMA using their website. Yea for convenience.

By using the credit card for my purchases instead of cash, I can leave more money in my MMA for longer periods of time, which means my money will build more interest because the interest is calculated based on the daily balance. As long as the balance is paid off each month, it costs me nothing. It’s far more advantageous than a check card that withdraws directly from the account.

Wish I had researched this two years ago!