I had a similar idea in my 31 Days of Saving article, though I suggested saving $1 bills. (Maybe fives is the better way to go). I’ve never tried it, but I’ll bet it works wonders. The closest I’ve come was when I worked at Starbucks I received cash tips of between $10 and $30 a week. I stashed those away and had over $1,000 in less than a year. Do you set aside cash for savings? How do you do it?

Put simply, never put your eggs in one basket, and know what you’re doing when you put money in an uninsured account.

Limit accounts to FDIC maximums

The combined balance of your savings and checking accounts is federally insured for up to $100,000 per person, per bank (joint accounts for up to $200,000). IRAs are separately insured for up to $250,000.

Some depositors are losing money that was with IndyMac because they kept more than $100,000 in checking or savings accounts. If you need to keep more than $100,000 in checking or simple savings, open multiple accounts at different banks.

Invest in your employer carefully

Finally, never invest primarily in one company—especially if that company is your employer. Anytime a company tanks—and I’m sure IndyMac is no exception—loyal employees not only lose their jobs, but they lose their nest egg, too. No company is immortal and no investment is a sure thing.

While employee stock purchase plans may make it attractive to invest heavily in your employer, remember that any problem your employer encounters down the road is double trouble: your job and you investments are at risk.

Today’s top three high yield savings accounts (HSBC, ING, and E*Trade) all have different policies on linking checking accounts and transferring funds in and out. You can link any of these online savings accounts with checking accounts and transfer money electronically in 2-3 business days.

But each of these banks has a unique competitive advantage when it comes to linking other kinds of bank accounts. Which model is best for you?

E*Trade — E*Trade’s high yield savings account enjoys a distinct advantage of being easily linked with a full-service online brokerage account for stock trading, as well as a free online checking account offering 3.25% APY on balances over $5,000. For anybody with a healthy checking account balance and an online stock portfolio, E*Trade is your bank.

ING Direct — ING Direct offers a 1.75% APY free checking account (3.15% for balances over $50k) along with its Orange Savings Account, but its real advantage lies in the saver’s ability to create an unlimited number of sub-accounts, making it easy to track for and save for multiple goals at one time.

HSBC Direct — Finally, HSBC Direct offers the ability to link your account to another high yield savings account (for example, ING). That’s something no other bank (that I know of) allows you to do!

For more information on where to save, read our comparison of high yield savings accounts.

Money Aisle is like eBay for savers. In a simple form, you tell Money Aisle the amount of your initial savings deposit, whether you want a high yield savings account or certificate of deposit, and your home state. Hit submit, and several dozen savings banks compete for your deposit. Money Aisle returns the bank offering the highest available rate for your deposit level.

If you like and accept the offer, you will be forwarded to the bank’s website to complete the deposit. If you’re unhappy with the result, you’re under no obligation to deposit. You can try another auction, or come back another day.

How did Money Aisle perform?

We ran three different searches for high yield savings accounts (in Massachusetts) for $600, $5,000, and $15,000. The $600 search returned a 2.9% APY at Legacy Banks, with branches in Massachusetts and New York. Our $5,000 search did slightly better, catching a 3.4% APY at a New York credit union. Finally, our $15,000 search also netted a 3.4% APY, this time at Beverly National Bank.

While it was fun to watch Money Aisle work, the resulting rates were disappointing. Most of the online high yield savings accounts we watch and review here at Money Under 30 beat out the 2.9% rate for a $600 deposit, and HSBC Direct offers a 3.5% APY (with no minimum deposit requirement) that beats the rates Money Aisle returned for both $5,000 and $15,000 deposits.

Two factors may contribute to the lagging rates we received. First, the site is new, so we expect rates to improve as more banks join in on the auctions. Second, Money Aisle returned brick-and-mortar banks in our area. While the rates returned were many times the banks’ published rates, due to customer service expenses, brick-and-mortar institutions can’t compete with online-only banks like HSBC.

Bottom line? If you need the best possible savings rate at bank that may have branches in your area, give Money Aisle a try. If not, try one of these online savings accounts.

Have you tried Money Aisle? Did you find a higher savings rate than online savings banks?

1. Determine how much you need, and when you need it. Tying an exact amount to your down payment savings goal will help keep you motivated and allow you to track your progress. Get a sense of how much your target home will cost, and try to save 20% for a down payment. Next, set a deadline. You may discover you need to save more each month than you thought, but that’s okay— these goals can push you to find extra ways to save you might otherwise overlook.

2. Create a separate savings account for your down payment. Whether you have $1 or $10,000 already saved for your down payment, stash it in a separate savings account to avoid tapping the money for other expenses. You can do this with a free online high yield savings account or simply by creating a new account designation at your current bank. Some local banks and credit unions even provide special accounts for first-time home buyers offering higher returns or rebates on mortgage closing costs.

3. Make your savings contributions automatic. Once you have determined how much you need to save each month, have that money automatically transferred to your down payment savings account every two weeks. Even better, most employers will deposit your paycheck into multiple accounts if you ask. If you never see the money you’re saving for a down payment, you can’t spend it.

4. Load up your traditional IRA. Traditional IRAs, which let you invest up to $5,000 in pre-tax dollars annually, provide an often-overlooked benefit for first-time homebuyers. You can withdraw up to $10,000 from your IRA for first-time homebuyer expenses (including your down payment) without paying the usual 10% early withdrawal penalty assessed for IRA withdrawals prior to age 59 1/2. Roth IRAs provide a similar benefit, but with some more complicated rules. With this benefit it mind, make contributing to an IRA a priority. You can save with pre-tax dollars, and stand to earn a better return on your cash than in a savings account.

5. Dump large monthly expenses. If you’re already managing to sock away a large sum each month to save for your down payment, you know that saving means sacrificing other things. As you get closer to your savings goal, make an effort to slash major monthly expenses like auto loans or credit card debt payments. Not only will this free up more cash to save, it will improve your debt-to-income ratio, an important factor in calculating your mortgage rates. Most importantly, a lean budget will put you in great shape on the day you finally become a homeowner.