Open an Online Savings Account to Set Up Your Sink Funds (+ Reflections on the New Capital One 360)

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piggy banksYou’ve heard me sing the praises of our online savings accounts for keeping our sink funds (and emergency fund) separate from the rest of our monthly spending money.

In fact, to this day, those sink funds keep our budget humming along. They are probably the best thing we’ve done for our household budgeting.

Until recently the bank where we kept our sink funds was called ING Direct, but over the winter, it became Capital One 360.

I wanted to give it a few months to see if anything changed before I shared my impressions with you guys.

Well, after a few months of using it, I’m happy to report that NOTHING has changed. Well, I take that back — the colors and logo changed; instead of orange, I’m now greeted with red and blue.

Other than that, though, the interface, the sub-savings accounts, and the ease of online deposits and withdrawals are all the same.

Here’s something I wrote two years ago, describing how we set up our sink funds, which might be helpful in your getting started:

How to Set up Sub-Accounts at Capital One 360

When you first sign up for a Capital One 360 savings account, you will need to do a little bit of paperwork. To verify that you are who you say you are, Capital One 360 will need you to authorize a transfer from an outside bank account.

You will also get assigned a Saver ID. This ID is a 9-digit number, which applies to your entire Capital One 360 portfolio – savings, checking, kids’ accounts if you want to set them up, Retirement Accounts, etc.

I set up our account so that both DH and I have access to it. He has his own Saver ID, but both IDs are able to access the portfolio.

When you are ready to start creating sub-accounts, you just log in to Capital One 360 with your Saver ID (and password and security questions) and click on Open an Account.

Then click on Savings Account (it should be the first option).

Under “How Do You Want to Set Up Your Account”, I always click on Joint, so that both my husband and I have access. I actually manage all of our Capital One 360 accounts, but if G-d forbid something should happen to me, I want my husband to have seamless access to our accounts.

To make it a Joint sub-account, I just have to enter his Saver ID and password.

When creating your sub-savings accounts, you get to choozse a name for each one. I have creatively named them things like “Property Taxes Sink Fund” and “Car Repair Sink Fund”.

You need to fund your new sub-account, either with a deposit from another sub-account, or from an outside bank. There is no minimum balance – so you can open a sub-account with just $1.

Later, when you want to transfer money into one of your savings account, you will be prompted to select which sub-account you want the deposit credited to.

Once you finish creating the sub-account, it automatically shows up on your Capital One 360 dashboard. You will be able to see all of your accounts on one page – with their subtotals, and then the grand total at the bottom.

I love being able to see all my accounts in one place – and knowing exactly where each one stands – without having to toggle between screens and accounts. I love that my funds are divided, but I don’t have to hassle with a ton of extra paperwork.

To learn more about the concept of sink funds, you can read this post.

To learn more about our usage of sink funds and how many of these funds we have, you can read this post.

And to sign up for your very own online savings account/sink fund holder with Capital One 360, you can go HERE.

Please note that I also use the Capital One 360 Checking Account for our groceries (it’s like a virtual cash envelope) but I do NOT recommend that you sign up for that right now. And here’s why: Historically, ING, which is now Capital One, has given a sizable bonus for signing up for a checking account in the month of July — above and beyond the typical $50 bonus. I’m hoping they will do the same this year, so if I were you, I’d hold off in the hopes that I could score that bonus.

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