Summary5 min read

Podcast Summary: Optimal Finance Daily

Episode 3053: The Power of an Online Only Savings Account by Tiffany Aliche of The Budgetnista
Host: Diania Merriam
Date: February 25, 2025

Episode Overview

This episode centers on the practical advantages of using an online-only savings account, with the content drawn from a blog post by Tiffany Aliche, aka The Budgetnista. Diania Merriam brings her signature energetic and relatable narration, emphasizing actionable steps that help listeners break negative savings cycles and build lasting financial habits. The episode is perfect for anyone seeking concrete tools to automate their savings and achieve greater financial independence.

Key Discussion Points & Takeaways

1. The Challenge of Saving Money

Saving Isn’t Fun (01:00): Tiffany admits what many feel—“saving money isn’t always fun.” It gets harder when it’s up to you to manually move money from checking to savings, only to watch that money migrate back when unexpected expenses hit.
Common Cycle Explained (01:27): The cycle:
- Move money into savings reluctantly
- Let it sit briefly
- Pull it back into checking for wants or needs

2. Mindset Matters: Automating and “Inconveniencing” Your Savings

You Are the Obstacle (02:13): “One of the biggest obstacles to successful saving is you. Yes, you. Taking yourself (no shade) out of the equation is key to sticking to your savings goals.”
Shift Your Mindset (02:24): Instead of seeing saving as hard, see it as a process of small, automatic steps.
Inconvenient Money is Good Money (02:44):
- “Inconvenient money gets saved.”
- The main trick: keep your savings a little out of reach.

3. Benefits of Online-Only Savings Accounts

1. Inconvenience Factor (03:03)
- “It takes 24 hours or more to transfer your money from an online-only savings account back to your current bank account… This makes your money inconvenient and less likely to be touched. The mandatory waiting period will stop impulse spending of your savings in its tracks.”
- Power Tip: Don’t open a checking account where you hold your savings. “That would totally blow the critical inconvenience element and make it faster to transfer funds and use them. This is no bueno and will encourage unplanned spending.” (03:25)
2. Higher Interest Rates (03:58)
- Online banks often pay better interest rates than brick-and-mortar institutions due to lower overhead.
- “They can offer to give you a few more coins and interest because they don’t have to maintain the costs like paying rent associated with traditional brick and mortar banks… This means you make more money on your money.”
- Reminder: Keep an eye on rate changes.
3. Lower (or Zero) Fees (04:24)
- Many online savings accounts offer low or no fees, waive overdraft charges, require no minimums, and allow easy withdrawals from affiliated ATMs.
- “This is a key advantage because you can earn interest on your savings without having to pay sneaky account maintenance fees.”

4. Practical Steps for Success

Automate, Automate, Automate (05:02)
- “Take the thinking out of the equation and automate your savings. Set up a certain amount to automatically transfer from your checking account to your online savings account at a regular interval.”
- Even starting with just $5-10/month helps build the habit.

5. Choosing the Right Online-Only Savings Account

Checklist for Picking a Winner (05:40):
- Visit comparison sites (Tiffany recommends MagnifyMoney.com).
- Ensure the account is FDIC insured.
- Seek the highest available interest rate.
- Check for lowest required deposit to open and earn the advertised rate.
- “The best online only savings accounts will check all four boxes.”

Notable Quotes & Moments

On Mindset (02:13):
“One of the biggest obstacles to successful saving is you. Yes, you. Taking yourself (no shade) out of the equation is key to sticking to your savings goals.”
— Tiffany Aliche
On Making Savings Inconvenient (02:44):
“Inconvenient money gets saved.”
— Tiffany Aliche
On Account Setup (03:03):
“It takes 24 hours or more to transfer your money from an online only savings account back to your current bank account… The mandatory waiting period will stop impulse spending in its tracks.”
— Tiffany Aliche
On Building Habits (05:02):
“The key is to get started and form the savings habit no matter the amount.”
— Tiffany Aliche

Host’s Personal Commentary & Closing Insights

Diania Merriam’s Experience with Online Savings (07:32)

Diania shares her own use of a high-yield online savings account (Capital One 360) and highlights two key reasons she agrees with Tiffany’s advice:
- Using a separate bank for savings maximizes inconvenience and dampens temptations.
- Liquidity matters:
  “The reason you want some money in a savings account is for the liquidity. You want to be able to easily access money in an emergency and not have to sell any of your investments at a less than ideal time.”
Diania points out that earning interest isn’t the main appeal—it’s having cash accessible when needed, while investing should be reserved for longer-term money growth.

Important Timestamps

01:00: The dreaded saving-doesn’t-feel-good admission
02:13: “One of the biggest obstacles to successful saving is you.”
02:44: “Inconvenient money gets saved.”
03:03-03:58: Advantages of online-only savings accounts, especially inconvenience and higher interest rates
05:02: The power of automating your savings
05:40: How to find the best online savings account
07:32: Host’s lived experience and practical takeaways

Summary

This episode demystifies online-only savings accounts and shows how their “inconvenience” is their superpower in helping you save more. By automating deposits and keeping your savings separate from spending accounts, you can painlessly build a financial cushion—one that grows quietly thanks to higher interest and fewer fees. Tiffany Aliche’s simple, step-by-step approach, echoed by host Diania Merriam’s own experiences, make this episode a compelling case for anyone serious about achieving financial independence and peace of mind.

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[00:00]
A
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And when you have to rely on yourself to take the money that's sitting oh so prettily in your checking account and manually move it over to a savings account at your same bank a few doors down from your forever BFF checking account, it's even less fun. The usual cycle is to unhappily move a few dollars over from checking to savings. When you remember, let it sit there in savings for a bit and then end up transferring it back to your checking account because of a new want or need that's going to cost a few more bucks than you have available in your checking account. Time to break the no save cycle. Yes, especially now. In these uncertain economic times, savings should move to the top of the to do list. Why? Because having money tucked away in savings is a key component of to help you ride the waves of any future economic turbulence. Great news. I have an easy peasy solution to help you overcome all the savings drama. It starts with your savings mindset. Savings Mindset One of the biggest obstacles to successful saving is you. Yes, you. Taking yourself no shade out of the equation is key to sticking to your savings goals. Many of us have the mindset that saving is hard, but it doesn't have to be. A really great and effective way to tackle the stress of it all is to take small, simple and automated steps to consistently form savings habits that crush your financial goals. And another key to saving like a pro is to make your money inconvenient. Because, as I love to say, inconvenient money gets saved. What is inconvenient money? It's money that you save in an online only savings account. Online Only Savings Account Magic Online only savings accounts are my jam. Here are just a Few reasons why 1. Inconvenience it takes 24 hours or more to transfer your money from an online only savings account to back to your current bank account. This makes your money inconvenient and less likely to be touched. The mandatory waiting period will stop impulse spending of your savings in its tracks. Pro Power Move make sure you don't open a checking account at the same bank where your savings account is. That would totally blow the critical inconvenience element and make it faster to transfer funds and use them. This is no bueno and will encourage unplanned spending. 2. Higher interest rates Online only savings accounts often have a higher interest rate than traditional banks. They can offer to give you a few more coins and interest because they don't have to maintain the costs like paying rent associated with traditional brick and mortar banks. This means you make more money on your money. Please keep in mind that the interest rates fluctuate based on federal regulations, so be on the lookout for any drastic downgrades to your current interest rate and be prepared to pack up and move for a better rate elsewhere if you're inclined to lower fees. Online only savings accounts tend to have lower fees and some have no fees at all. This is a key advantage because you can earn interest on your savings without having to pay sneaky account maintenance fees. Also, many online accounts are known to waive overdraft fees, have no minimum deposit or balance requirements, and will allow a certain number of free ATM withdrawals at their banks. Pro Power Move Automate Automate Automate Take the thinking out of the equation and automate your savings. Set up a certain amount to automatically transfer from your checking account to your online savings account at a regular interval. If you have to start with five to ten dollars a month, do that. The key is to get started and form the savings habit no matter the amount. Before I go, I couldn't leave you hanging and not give you a few tips for finding the best online only savings account. Here's what to look for when scoping out a place to park your an A grade on my favorite comparison site, magnifymoney.com it should be FDIC insured. You should look for the highest interest rate offered and the lowest deposit required to open an account and earn the interest rate advertised. The best online only savings accounts will check all four boxes. I hope I now have you convinced that online only savings accounts are the way to go. You just listened to the post titled the Power of an Online Only Savings Account by tiffany alice of thebudgeta.com this message is brought to you by Apple Card. Does this sound familiar? You're in line at checkout, cart full of items, your toddler is screaming for a treat, and you left your wallet in the car. Or was it at home? No need to panic. With your iPhone in hand, you can tap to pay using Apple Card with Apple pay and you'll earn 2% daily cash back when you do so. If your credit card is an Apple card, maybe it should be subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch terms and more at applecard.com Abercrombie is an official fashion partner of the NFL and I'm Ceedee Lamb, wide receiver for the Dallas Cowboys. You know I'm here for Abercrombie's Cowboys gear. That's not a question, but I need a whole wardrobe to go with it. No shade to the guys, but I'm used to having the best tunnel fits. This season Abercrombie has me covered. Shop NFL by Abercrombie in the app, online and in store. I completely agree with Tiffany's advice here to get yourself an online only savings account with a provider that is different from your checking account. I have a high yield savings account with an online option called Capital One360. I don't pay any fees and there's no minimum deposit. I set this up years ago. The interest you're earning on your savings account is not the compelling reason to hold cash in a savings account. If you're looking for your money to make money, you should invest it. The reason you want some money in a savings account is for the liquidity. You want to be able to easily access money in an emergency and not have to sell any of your investments at a less than ideal time. That should do it for another edition of Optimal Finance Daily. I'll be back tomorrow as usual, so I'll see you there on the Wednesday show where your optimal life awaits.