Originally Posted by Marathon Man
I have to agree with Ken here, but I do have soem questions for those who know a bit about how ING's 3% interest works.
If I leave, say, $10,000 in ING for a long time then yes, I can see a savings add up with interest. But if I keep taking it out and putting moeny in and taking out and putting new in, will this still help me gain interest? Or is it based on longevity? I mean, surely both do something, but do you make as much?
As I understand it, those who might be flipping funds around and putting enough into a Bank Direct account to satisfy the minimum balance requirements can do the above in and out scheme and still obtain their AA miles before having to use the money, and then add new funds. All you have to do is be careful with the timing and it will work.
I'm not sure I completely understand what you are asking, but here it goes:
At ING, on $10,000, you should earn daily interest of $0.82 (10,000 x 3% / 365 days). If you don't withdraw the money, this daily interest should increase with compounding. If you withdraw it partially or completely, you only earn daily interest on your remaining deposited balance.
The comments above seem pretty straightforward -- so perhaps I have misunderstood your question about "gaining interest . . . based on longevity."
I've never invested in a bank that offers miles, but if their computations are based on average balances, you can't game the system by timing large deposits. Averaging will negate the timing effect. If the bank's computations are based on measurements on specific days (e.g., end of month), then theoretically, you could game the system by timing deposits and withdrawals. Someone else might be able to shed some further light on this subject.