Online Savings Accounts
May 22nd 2007 13:01
I started researching online bank accounts by accident a few months ago. I had been seeing those commercials for ING and I wanted to know what that company did. (I didn’t pay too close attention to commercials, mostly because I hate commercials!) It turns out it was an online bank that had WAY better APY on savings than I was getting at my credit union. I just joined them recently and have found everything to be as easy as they claimed it was.
Here is ING as well as other online banks that I have found recently where you can ramp up your savings:
INGdirect: Their savings accounts are 4.5% APY. Even their checking accounts have decent APYs compared to most banks, which usually have 0% APY unless you have millions of dollars sitting in your checking account. If I had a million dollars that I could leave in a checking account, I wouldn’t need a decent APY in the first place!
There is no minimum balance required to open one of these accounts, and there aren’t any fees to transfer money in or out to your regular bank account.
Amtrustdirect: This company calls their savings account an “e-money market” account, so if you see the link for that, that’s what you need to go to. Their APY is currently 5.36%. They also do not have a minimum balance requirement, nor do they have fees for transferring money in and out, unless you exceed the 6 outbound per month rule.
Emigrantdirect: This online bank has 5.05% APY. They too have no fees or minimum balance requirements.
*In my opinion these first three are the best ones I have found. The rest that follow have decent APYs, but have some fees or other problems associated with them that I am too lazy to deal with. Feel free to check them out for yourself though!
FNBOdirect: This company is currently offering a 6% APY, but this will change in September. The main page says no monthly fees and no minimum balance required, but in the fine print on the bottom it says “fees may reduce earnings.” I believe there was something wrong with how a person would get their money out, and the only way to do it would amass a fee. You probably want to find the FAQs and check it out yourself for this one. Mymoneyblog had this article on it, and the comments are what made me question the account in the first place.
Etrade: Yes, this is the online brokerage firm. Like Amtrustdirect, they call it a “money market” account. They have a 5.05% APY. They have a minimum balance requirement of $1,000, so this could be a problem for some. (It is for me right now!)
HSBC: They have a 5.05% APY. They say no minimums and no fees, but I remember reading their FAQs or fee pages and found that transferring money to your regular bank account from the HSBC online account gets you a $3 fee. So basically they just lied on the front page.
*If you go here and scroll down to "Bank to Bank Transfers Fee" you will see it for yourself.
What most people use these types of accounts for is emergency savings; you know, those things that come out of nowhere: your car dying, something in the house breaking, hospital visit. It’s good for those because you can get to the money quickly and easily. (Not as quickly as your local bank, sometimes money transfers can take 3 days, but to me this is a small price to pay for the better APY).
Happy saving!
*Read the update*
Here is ING as well as other online banks that I have found recently where you can ramp up your savings:
INGdirect: Their savings accounts are 4.5% APY. Even their checking accounts have decent APYs compared to most banks, which usually have 0% APY unless you have millions of dollars sitting in your checking account. If I had a million dollars that I could leave in a checking account, I wouldn’t need a decent APY in the first place!
There is no minimum balance required to open one of these accounts, and there aren’t any fees to transfer money in or out to your regular bank account.
Amtrustdirect: This company calls their savings account an “e-money market” account, so if you see the link for that, that’s what you need to go to. Their APY is currently 5.36%. They also do not have a minimum balance requirement, nor do they have fees for transferring money in and out, unless you exceed the 6 outbound per month rule.
Emigrantdirect: This online bank has 5.05% APY. They too have no fees or minimum balance requirements.
*In my opinion these first three are the best ones I have found. The rest that follow have decent APYs, but have some fees or other problems associated with them that I am too lazy to deal with. Feel free to check them out for yourself though!
FNBOdirect: This company is currently offering a 6% APY, but this will change in September. The main page says no monthly fees and no minimum balance required, but in the fine print on the bottom it says “fees may reduce earnings.” I believe there was something wrong with how a person would get their money out, and the only way to do it would amass a fee. You probably want to find the FAQs and check it out yourself for this one. Mymoneyblog had this article on it, and the comments are what made me question the account in the first place.
Etrade: Yes, this is the online brokerage firm. Like Amtrustdirect, they call it a “money market” account. They have a 5.05% APY. They have a minimum balance requirement of $1,000, so this could be a problem for some. (It is for me right now!)
HSBC: They have a 5.05% APY. They say no minimums and no fees, but I remember reading their FAQs or fee pages and found that transferring money to your regular bank account from the HSBC online account gets you a $3 fee. So basically they just lied on the front page.
*If you go here and scroll down to "Bank to Bank Transfers Fee" you will see it for yourself.
What most people use these types of accounts for is emergency savings; you know, those things that come out of nowhere: your car dying, something in the house breaking, hospital visit. It’s good for those because you can get to the money quickly and easily. (Not as quickly as your local bank, sometimes money transfers can take 3 days, but to me this is a small price to pay for the better APY).
Happy saving!
*Read the update*
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