The personal finance community always talk about online savings accounts but seldom, if ever, does anyone inquire about the actual institution that readers use. Why only listen to one of us talk about a particular offering when everyone on the face of this planet have experiences with them? Today, let’s find out by asking.
Which online bank (if any) do you use for your savings? Are you using it out of convenience or is it because you think the online savings account you use is the best out there?
Of course, it wouldn’t be fair for me to pose the question and not share, so let me share my online savings history.
Disclaimer: I have accounts with a ton of banks, but these are online savings accounts that I actually deposited a meaningful amount for a certain period of time.
ING to Ally, and the Windy Road
I’m almost embarrassed to say that I applied for so many different savings account over the years. Here’s a brief history of how I started and which one I’m with right now.
It All Started with ING Direct
Years ago, way before I started this site, I bought into the bouncing orange ball idea and opened an ING Direct account. I didn’t know much about automatic savings or CD ladders, but the higher yield was reason enough for me to give it a try. The decision opened my eyes. It was the first step in seeing just how much the banks were ripping us off with interests that amounts to a whole lot of nothing.
One particular minor feature I loved – the “SINCE OPENED YOUR ORANGE ACCOUNT(S) EARNED” ball at the top left hand corner. This simple addition of showing me how much interests I earned over the years was not only motivating, it was fun to look at and made me look forward to receiving the statements.
Emigrant Direct
Eventually, the rate chase started and I ended up with Emigrant Direct. I had no idea what the company was about and to be honest, the extreme no frills and basic interface didn’t exactly inspire that much confidence. Then again, I was young and didn’t know any better. Luckily, the decision to move didn’t cost me anything as I got better rates and never had a problem.
Etrade Complete Savings
Moving to Etrade was as natural as asking my bank to bid on a mortgage loan because I was a happy Etrade brokerage customer. When I found out that Etrade allowed me to essentially store my left over cash at an astounding 5% (can you believe it was the rate at the time?), there was no reason to use anyone else. The flexibility of instant transfers between the brokerage and savings account remain to this day, but there’s much less incentive at the current yield.
Click Here for a Review of the Etrade Complete Savings Account
HSBC Direct
Around the same time, I also opened a HSBC Direct account. Growing up in HK, HSBC was an iconic brand and I jumped on the opportunity when they started promoting their online offering. The rates were always comparable, and it made me feel safe that my money was with a global brand that is much larger than even the biggest U.S. competitors.
Click Here for a HSBC Direct Review
FNBO Direct
Since that time, I started writing about personal finance and found out about FNBO Direct. I was attracted by the color schemes (I’m not joking. I am very tired of every these bank’s lack of design), the great rates but most of all, the fact that they don’t charges for bill pay privileges. It’s amazing but the little details are always what sets the better offering from the others.
Click Here for my FNBO Direct Review
Ally Bank
It was weird but what triggered me to look into Ally Bank was the questions surrounding its ties with GMAC and GM when the automaker was going through bankruptcy. Eventually, I learned that since they weren’t quite General Motors, had rates higher than pretty much everyone else and the accounts were FDIC insured up to $250,000, my money would be safe.
One thing led to another and to this day, I still have my short term savings with Ally Bank.
Click Here for a review of Ally Bank
The Start of a Long Journey
Who knows where my short term savings will be and I’m sure my online savings account of choice will change again as rate changes and more options pop up everyday. But enough about me. Which high yield savings do you recommend? Is there one that we should look into because it’s just better?
- Emigrant Direct – Official Site
- Etrade – Official Site
- FNBO Direct – Official Site
- Ally Bank – Official Site
Others
- Online Savings Accounts – With Updated Rates
{ read the comments below or add one }
I remember about 6 years ago, I signed up to ING and it was 5% interest for their savings account. Then a year and a half later, HSBC online was also 5%. Now they are both at a horribly 1.5-2%…
-Mike
for local malaysia, i more prefer do online banking with Public bank
Best online savings rate I found is Smartypig.com … 2.75%.. No intro teaser/minimum to open
I enjoyed reading your post today. Personally, I’ve used Chase for my online checking, savings, brokerage & credit accounts for over 10 years now. I know that the pure online banking options like ING may offer some very competitive rates but I’ve built a relationship with Chase over the years and have gotten very competitive deals on checking, brokerage, & loans. My experience may be different from others but I’m not sure if I would have been able to get a great deal on a loan when I needed one had I not built the relationship with Chase over time through all of the business I had given them. If I was just looking to get a high rate on a checking/saving account and that’s it, I totally agree with the ING type approach.
Must be my age – but I don’t trust the online only stuff…
I want to be able to walk in and talk to someone and come out with cold hard cash 🙂
And I want instant access or check writing ability from it… all of which I have…. And I want great rates – which I also have 🙂
So – none – that’s my final answer 🙂
Interestingly, I’m planning to go to Charles Schwab and Scottrade today (I’m leaving now) to talk to them about why I should move all my retirement accounts over for the exact same reason. I want to see if there’s really a difference when they have a branch 🙂
Edward Jones 🙂
The branch is 2 blocks from my house – and a local guy runs it – someone I am very comfortable with having him handle my money.
I can call or go in. Very friendly. Very helpful.
Also we do a review twice a year – free, of course – and the advice is helpful and timely. When I changed employers 2 years ago, I took the 401K info in, and he helped read thru the mumbo jumbo and suggested the accounts within the company 401K plan that fit my investment strategies and past practices. There was nothing in it for him – no commissions, etc. – but this is the type of friendly help I get from his office 🙂 Much appreciated. As my company is changing pension plan providers soon, I’ll take the next prospectus also in to him, and again, he’ll help me decide on the package that fits my personal savings strategies. Nice guy.
I have a free money market acct. tied to it for transfers and check writing when needed. I have instant “loans against my stocks” available just by writing a special check – so funds are there if needed for an emergency.
And, as E.Jones doesn’t cash checks nor take cash in, I have a local bank free checking account for cashing checks etc.
Not to have all my eggs in one basket, I do have an IRA elsewhere – also local tho – at State Farm, (started a long time ago and doing very well so why move it)…..as well as my state employee pension thru the state elsewhere. (guaranteed 8% so why mess with it either)
It’s a package that fits together well for me. And that’s the key – you
need to find something that works well for you. No hassles – that’s my motto 🙂
See… You picked a good solution because of the person that works there (in your case, the owner) but it may or may not be a good choice if he is out of the picture.
On the other hand, most of us pick solutions based on the company, which is becoming more like a commodity as trading platforms are becoming similar and problems (if any) are generally tolerable. Features are different, but every company has its pros and its cons.
au contraire…. I picked the company based on research…
That the manager is a good guy is just a bonus 🙂
And as the product is excellent, in my opinion, and would be excellent with or without him personally in the picture…….
and as the service is beyond excellent, I stay there 🙂
Basically for the reasons you mentioned. You can do instant transfers and can take out money right away if necessary. Not a big deal since it only takes a few days to do transfers or take out money with an online savings account, but could be frustrating for some.
With the interest rates so low on them I have not switched into. I still prefer my money market account because the rates are basically identical and it’s more liquid.
Would you mind explaining why it’s more liquid than an online savings account? The only reasons I can think of is if your money market account is tied to your checking account so you can do instant transfers or if you have an ATM card for it but please elaborate.
For me, these accounts are for short term savings so I don’t want it to be too liquid and the balance to be in my face too often, as those two combined might ignite a spending spree 🙂
How do you keep up with all of the accounts?
I’ve had an ING account for years and love it. Their customer service it top notch.
We’re in the process of selling our co-op so I’ve been considering opening an account with Ally. I have some research to do.
Unlike brokerage accounts where you have to do asset allocation and others, online savings accounts are actually quite easy since there’s no need to do anything to keep the accounts.
Many people just have an ING account because they were first but when the rates get to a point where it makes a difference. (to me, it’s more than 0.25%), I tend to think about changing.
I started with ING as well and basically went through the other banks (in a different order) like you did. I am keeping ING as my main bank because I love the features it has and I have all my bills set up to be paid some way through them.
I am using Ally now as my ‘put it away and forget about it’ savings and have money transferred to it from ING.
ING still rocks my world despite the interest rates going down.