While most people consider E-Trade Bank as a premier discount brokerage firm, few know that it offers an online savings account even though the banking arm has been around since 1982. Quietly though, the company has been gathering many customers (including me) through the years and E-Trade Bank is now one of the bigger online banks that offer high yield savings accounts. This is a review of E-Trade Bank as an online savings account provider.
E-Trade Online Bank Features
- No minimums or account fees (although you need at least $1 to open an account)
- Quick Transfer to and from banks (especially to its own brokerage firm)
- Online statements are accessible forever (this is actually extremely useful and rare if you ever need it)
- FDIC Insured (meaning that each person is insured up to $250,000 until Jan, 1, 2010 and $100,000 thereafter)
Signing Up for the Bank’s Online Savings Account
After the easy sign up, I was instantly given the option to fund the account (either by check, wire, direct deposit, ACH transfer, or transfer from another E-Trade account. Being a customer of their brokerage arm, I just had funds transferred from my brokerage arm to the banking side and money was transferred the next business day.
Transferring Money in and Out Using Quick Transfer
It’s quite simple to transfer money using E-Trade’s system called Quick Transfer. Once it’s setup, all you do is choose the account through the drop down boxes, type in the amount as well as the execution date and click “Transfer”.
You can also setup automatic transfers by choosing the frequency, which ranges from once a week all the way to once a year.
Other Quick Facts
- While the rate fluctuations just like any other online savings account, E-Trade always pays the interest on the last day of the month.
- Bill Pay is available for free even with the savings account
- You can assign transactions to different categories and then sort them later.
Thoughts on E-Trade as my Online Bank of Choice
So far, I love E-Trade’s high yield savings account because it’s tightly integrated with the brokerage and retirement accounts I have with the company. I can easily transfer money to and from the brokerage firms and the neat thing is that if I do it under business hours, the transaction and funds are available instantly. As an example, if I transfer money from my bank to the brokerage now, I can use those funds to buy a stock within 3 minutes. It’s that quick.
The flexibility really allows me to earn a much higher interest rate on my idle cash than otherwise possible with any other combination, so I highly recommend the E-Trade brokerage and savings account combo. For those that are looking for the bank as a strict savings account, it’s not a bad choice either because transfers are quick, yields are always amongst the highest and like everyone else, it’s FDIC insured so your money is safe.
About E-Trade
Official name: E*Trade Financial Corporation
E-Trade Executives
- Executive Chairman and Chief Executive Officer: Donald Layton
- Chief Financial Officer: Bruce Nolop
- Chief Government Affairs Officer: Betsy Barclay
- Chief Risk Officer: Jim Bidwell
- Executive VP of Capital Markets: Ken Hight
E-Trade Full Time Employees: 3,757 (incl. Banking and Brokerage divisions)
- E-Trade Complete Savings Account – Official Site
- Other Highly Recommended High Yield Online Savings Accounts
- E*Trade Brokerage Account – Official Site
{ read the comments below or add one }
I agree that the savings account is probably a good idea but I would really suggest that you stay away from their brokerage. Not just because of the high fees but the very poor customer service.
I have a E-Trade account and I got an ATM card from them so I’m pretty sure new customers will still get them.
Does E*Trade have a saving card for withdrawal on ATMs?
My husband and I had a terrible experience with ING and pulled our money out. We have been looking at Venture Bank Direct who has a pretty high yield checking account right now. He’s been researching e*trade for us, but I’m rather stuck on my banking ways.
Melanie: I’m glad you find the bank reviews helpful and sorry to hear about your bad Chase experience. I’m still quite new to the whole FNBO interface but they do pay a higher yield currently.
I’ve been sticking with ETrade for a while now and don’t have any complaints at all so it’s hard not to recommend it. I am bias though since I’ve had the brokerage account with them for ages now and it’s been very easy.
I think the easiest thing is to setup both and then see which one you like as there are no minimum balance required. If you like both, then just put all the money into the one that has the higher yield. Once you get the hang on it, you can even setup a transfer between the two online savings accounts for times when rates change.
MoneyNing,
I’ve been reading your reviews about e*trade savings and FNBO. They’ve been so helpful. I’m currently a wamu customer but I’m planning to close my accounts now that they’re becoming chase (had a bad experience with a chase cc a few years ago that didn’t instill much confidence in their account security). Anyway, do you still like e*trade now that you’ve had it for a while? Or do you prefer FNBO? I heard that e*trade has a nice ACH system for external banks. I don’t plan to use the brokerage side. TIA.
Great review. I agree with the quick transfer speed from my etrade savings account to the brokerage being the best combination. When I move money back and forth, it is literally instant. It’s also nice now that etrade has one of the highest savings rate being offered anywhere too.
MoneyNing, Thanks for the explanation. I will stick with etrade (that’s what I will call it) or ETrade if I want to get formal.
Ross: Those banks are certainly very scary right now. It’s hard to tell how long this whole mess will take to settle down and which banks will be left standing. All I can say is to stay away from financial stocks just in case the government steps in and wipe out the shareholders.
Allison: I don’t know why there are so many names. Maybe because the official name is E*Trade (with a “*”) and since it’s a star, then everyone just adds their version of it.
Great review about etrade. I have an account and I always find the customer service people helpful at etrade. I highly recommend them.
Btw, why does no one make a standard for the official name? There’s e*trade, etrade, e-trade, and even e trade on the web. What’s really the right one? Does anyone even know?
Nice review. You have neatly pointed out pros and cons and the present scenario. Such blogs help in making informed decisions. Thanks for posting.
Tracy.
Great review.
On a separate note, it’s amazing that although ETrade’s always been the poster child of bad mortgage bets, they are actually much better at weathering this than everyone else.
Look at all the big banks – Citi already went back again and again to get TARP money, Bank of America just announced that they will because of Merrill Lynch’s bad books. Who knows about Wells Fargo? They might have done well by itself, but what about Wachovia’s books? Is that safe?
Sandy: Look at the good side (still have 3%). It’s impossible to look back because I’m sure at one time the interests for savings was like 10% in the 80s.
Calvin: I believe they send the 1099s out by the end of January so you should get them in the next few weeks.
Perfect timing. Anyone know how the 1099 forms from them look like and when they will be sent out? I was wondering about this and up pops this review.
Btw, I already have an account with them and they’re great.
I have an e trade savings account as well and they’ve been great (although all I use them for is transferring some money automatically every month).
The thing I don’t like is the fact that when I joined, the interest was like 5%and it’s only 3% now. But then I look at everyone else in the < 2% and I’m happy with them again.
Justin: Definitely agree with the speed since I’m a happy customer as well. I’m jealous of you and the stock option plans though since I’ve never worked for a company big (or ambitious) enough to have stock or stock options.
Emergency funds are a great way for people to take advantage of these types of high yield savings accounts. I wish more people are computer savvy enough to open these instead of the 1% savings accounts that they get from the local bank.
Great review and I would totally agree. I have my employee stock plan through E*Trade, so that got me started. The commissions are too high for my active trading, but I still have a Roth IRA and my Emergency Fund with E*Trade as well. Even transferring money to my external account is simple, it just takes about 3 business days to get the money. Which is fine for an emergency fund, and the interest rate is better than anything local :-).
Joe: BillShrink pointed you in the right direction. At the time FDIC made the decision (around Oct – Nov, 2008 time frame), everyone was scared about the safety of their money, especially after hearing about people losing money they had in excess of $100k when banks failed. This created a huge stress on banks like Wachovia and Washington Mutual (later gobbled up by JPMorgan Chase). The FDIC didn’t want the fear of the general public to exaggerate the bank problem so they temporarily increased the guarantee to $250k until the end of 2009.
Joe: Due to recent economic condition, the FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31st, 2009 (hence it’ll go back to $100,000 in 2010), as MoneyNing has mentioned.
What’s the $250,000 and $100,000 insurance difference? Is it specific to E Trade? Someone please explain.