As featured in The Wall Street Journal, Money Magazine, and more!

July 2008


Please view this updated overview of the best online savings accounts.

The highest savings account interest rates change practically daily. Here is a summary of the highest interest rates on well-known banks currently offered.

HSBC Direct Online Savings Account
0.80% APY

HSBC Direct has a track record of offering very competitive rates. I have been adding more to my HSBC Direct account to take advantage of their habit of high interest rates.

Unlike Washington Mutual, HSBC Direct requires no minimum balance and has no recurring account fees.


FNBO Direct Online Savings Account
0.70% APY

FNBO Direct is a newcomer to the online banking arena having launched a little over a year ago, but the bank behind the online presence, First National Bank of Omaha, has been around since 1857 and currently has 38 branches in Nebraska, Iowa, and Texas. First National Bank of Omaha has a CAEL rating of 2 (1 is the highest rating, 5 is the lowest). This means that even though the online account is a new offering, the bank is in good shape and most likely won’t fail like others have recently.


ShoreBank High-Yield Savings
2.15%

This account is a newcomer. ShoreBank requires no minimum balance and charges no account fees for this online account. An appealing feature is the bank’s attitude toward community development and the environment. Like most banks, ShoreBank turns a portion of deposits into loans. This bank focuses on “loans for projects that promote the efficient use of materials, resources, or alternative sources of energy, that promote the elimination of toxins, and that protect or revitalize land or water.”

If you’re interested in ShoreBank’s High-Yield Savings Account, apply here.


Click Here to Start Saving with Capital One 360Capital One 360 Savings Account
0.90% APY

No list of the top online savings accounts is complete without Capital One 360. They are no longer the interest rate leader, offering only 0.90% APY. In fact, it’s been some time since Capital One 360 has been at the top of any interest rate list, but there are several reasons to include them here. They were one of the first banks to popularize the idea of high-yield online-only savings accounts. Capital One 360 still maintains one of the strongest presences thanks to a vast customer base, good customer support, and a sensible and simple website.

Even though the advertised interest rate is lower than others, new customers can greatly increase their effective interest rate by grabbing a $25 bonus for opening an account. The bonus will work for anyone who opens the account with $250 and leaves at least $250 in the account for 30 days. The bonus is considered interest income for tax purposes.

Capital One 360 has no minimum balances or account fees.

If you’re interested in Capital One 360′s Savings Account, apply here. However, if you want to see if you qualify for a $25 account opening bonus, find out here.

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My Experiences Selling Online

This article was written by in Income. 4 comments.

I recently sold a number of possessions in my year-long quest to vanquish my credit card debt as quickly as possible. Before this, I had very limited experience using online selling tools, and generally thought of them all as a hassle, so I thought I would try more than one and see how they stacked up. Your experiences may differ, along with your selling requirements, but here’s what I found:

Craigslist

I’m fortunate enough to live in a city with a Craigslist presence (check to see if your hometown is on the list), and I had something that I really didn’t want to bother trying to ship: Guitar Hero III for the Nintento Wii. Craigslist, if you haven’t heard of it, is sort of like a city-wide distributed garage sale. You describe what you have using a free-form text entry field, pictures optional, prices optional, limited only by your imagination.

I said that I had Guitar Hero III for sale, found some Creative Commons photos on Flickr, asked for $50, and that was all there was to it. Within a couple of hours I had two offers. The first person haggled with me and asked if $40 would be okay. So I found a Starbucks that was easy for both of us to get to and met her that evening. If I’d waited a little longer, I could have gotten $50 for it from the second person. Lesson learned.

eBay

I had a number of DVD box sets of a favorite TV show that I wanted to unload (while keeping a soft copy of the better episodes on an external hard drive at home). It was easy enough to copy the details of each episode from a wiki to the “Sell item” page on eBay, and after a few repetitions I found it was even possible to find the vital stats with a database that eBay provided.

There are, not to put too fine a point on it, a lot of options for how to sell an item on eBay. I sort of wish there was an “eBay lite” option, or better wizard that stepped me through the process. Also, it tended to break when I used the Safari browser at home. I had to remember to use Firefox.

But my biggest problem with eBay was not really eBay’s fault: they wanted me to estimate shipping costs. The thing is, I don’t own a scale, and I can’t hold something in my hand and say, “yep, that’s about six pounds.”

In general, it seemed to me that eBay is geared toward professional sellers.

Amazon Seller Account

One-click patent silliness notwithstanding, I like Amazon because it is easy. Even without 1-Click, it’s easy. And that ease of use has expanded to their options for selling things online, in my case it was a used video camera.

All I did was find the right model camera by acting as if I was looking to buy one and click a button labeled “Sell yours here”. Specify the condition (new, used, etc.), add comments, pick a price and that’s about it. You get to benefit automatically from any pictures, customer reviews, or any other information that Amazon is already storing about that product.

Amazon also did a good job of estimating the shipping cost for me. The drawback I experienced using Amazon was that I had to wait. This will vary from product to product, of course.

Conclusion

With both Amazon and eBay, there’s something of a process to setting up an account and getting paid. Craiglist is a lot more free-form in that respect. If I was in a real rush, I’d probably use Craigslist again, but for the most part, I prefer Amazon’s way of selling things. I hardly had to lift a finger.

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Starting tomorrow, Washington Mutual is increasing the interest rate offered on its online savings account to 3.75% APY. This jump will put this account on top among the best-known online savings accounts. This is a wide enough margin over ING Direct to convince me to open an account and give it a try even though I’m far from a “rate-chaser.”

I foresee more interest rate increases in the near future.

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Many Consumerism Commentary readers don’t know this: I was a band geek. In high school, I played clarinet in wind ensemble and marching band. This continued into college, where I decided to major in music education. In college, I performed in a variety of ensembles on a variety of instruments ranging from trumpet to percussion and from crumhorn to gamelan.

Despite the wide range of possibility, I stuck with clarinet for my four fall seasons marching with our highly successful college marching band. Regardless, the professor and director of the marching band spoke to us once about careers and life choices. She considers herself extremely lucky. She has a career (as a professor of music education, professor of music performance, and director of the marching band and one of several symphonic bands) doing what she loves doing. Not many people would be lucky enough to be able to be paid for spending their days with the activity about which they are passionate.

So when I read this advice from Dean Kamen, inventor of the Segway, the words sounded familiar.

My father was an artist who loved what he did. He’d sit at his board 12 hours a day. I once said to him, “Gee, Dad, all the other fathers have time after they come home to play ball or sit around. At the end of the day, you’re working.”

He put his brush down and said, “Those fathers are doctors, lawyers and bankers. When they come home, all they want to do is their hobby. My work and my hobby are the same. Find work in something you love and it won’t feel like work.” I listened to him. And I have been fortunate enough to work at something that I love.

To find what you love doing, you have to have an opportunity to discover your talents. I was given the opportunity at an early age to have exposure to music, for example. I also had access to personal computers and the internet as I was growing up in the 1980s, unlike many other children my age. I participated in more activities, like little league baseball and karate, and this variety helped me to figure out what I could be passionate about.

I’ve changed a bit since college. Music and arts education is still very important to me, but I’ve moved away from that as my vocation. I certainly do not love my day job now. I do my best, or close to it, and I am interested in furthering my career, but I am more interested in working with the internet at this point in my life. I’m not sure that I love the internet, to use Kamen’s terminology. When I’m writing, it doesn’t feel like I’m working, but I wouldn’t say that this is my talent or passion. It does feel like work, however, when I am not feeling inspired and cannot come up with ideas.

I have so many interests that it’s difficult for me to hone in on just one that can define my vocation in such a way that it will be everything for me.

If you have some idea of an activity that you absolutely love, something for which you have a talent, and nothing else you could see yourself doing, and if you can find a way to make a living doing this activity, then you have an opportunity to be one of the lucky few. I think this may not be possible for many people. Either they haven’t had the opportunities to discover their passion and talent or, like me, they could see many different paths.

Do you have a passion? Does it coincide with your job? Could you make a living with your passion?

The smartest advice I ever got, CNN Money

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Where Did You Come From, Where Did You Go (July 2008)

by Luke Landes

Here are the most popular articles on Consumerism Commentary during the month of July 2008. The Correct Way to Pay Off Personal Debt: The Debt Avalanche 2007 New Jersey Homestead Rebate: Receive Up to $2,000 Just Like Apple’s MobileMe, But Free (by Smithee) Net Worth Competition: Don’t Compare Yourself With Others Four Day Work Week: ... Continue reading this article…

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The Real Estate Roller Coaster

by Smithee

I really enjoy good “data visualization”, which is a fancy, but more succinct way of saying “a way to look at information as more than just numbers.” Last year, before most of us were aware of the “mortgage crisis,” some enterprising individual took a list of average housing prices in the United States since 1890, ... Continue reading this article…

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Can You Be an Entrepreneur in Your Spare Time?

by Luke Landes

If anyone should be giving advice about how to become a successful entrepreneur, it would probably not be me. While I am earning money on my own outside of my day job, it’s not consistent or reliable. Part of the reason for this is that I never intended on becoming a business owner of this ... Continue reading this article…

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FAIL: 1st National Bank of Nevada and First Heritage Bank

by Luke Landes

The FDIC has announced that two more banks failed yesterday, bringing the total this year to seven. 1st National Bank of Nevada and First Heritage Bank operate a total of 28 branches in Nevada, Arizona, and California. Neither of these banks was included in the list of the top ten banks likely to fail. Account ... Continue reading this article…

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Thrasher Funds on Today Show and Weekly Blog Roundup

by Luke Landes

As I write this roundup, the anchors of The Today Show mentioned they will soon present the founder of Thrasher Funds, an expensive mutual fund company designed to attract younger people towards investing, to offer financial advice for teenagers. I’ve noted before that the concept is good, but the execution is out of touch. It’ll ... Continue reading this article…

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Get Out of FreeCreditReport.com’s “Triple Advantage”

by Luke Landes

FreeCreditReport.com is the heavily advertised company that offers “free” credit reports (if you sign up for a trial offer for their monitoring service with a monthly fee. They have huge billboards at Shea Stadium, where I will be tomorrow to see the (currently) first-placed Mets. Keep in mind that the place to get truly free ... Continue reading this article…

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HSBC Direct Extends 3.5% Rate Offer and More ING Direct Referrals Available

by Luke Landes

I received an email to inform me that HSBC Direct has extended its “promotional” interest rate on the online savings account of 3.5 percent APY to September 15, increasing this promotion by one month. I’m not sure what the difference is between a “promotional” rate and any other rate; as always, interest rates on savings account ... Continue reading this article…

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Advice From Robert Shiller: Don’t Be a Sheep

by Luke Landes

Robert Shiller, a professor of economics at Yale University, shares advice about investing he learned in graduate school. One needs to think antisocially to excel in investing, to resist the patterns of thinking that seem mysteriously to arrive simultaneously in the minds of millions of people around the world. People do not trust their own ... Continue reading this article…

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Stay Cool This Summer: Air Conditioner Alternatives

by Luke Landes

Rather than firing up the central air conditioning, you can keep it off or lower its power in the heat of the summer by exploring some of these low-cost alternatives. 1. Use fans. While fans don’t change the temperature of the air, they increase air movement, which will make you feel cooler by a few ... Continue reading this article…

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Advice From Bill Miller: Increase Your Money Without Working

by Luke Landes

Bill Miller, the manager of Legg Mason Value Trust, shares some advice about building wealth. [My father said...] “See this ‘plus .25′? That means that if you own one share of this company today, you have 25¢ more than you had yesterday.” I had come in from mowing the grass for three hours to earn ... Continue reading this article…

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What is Protected By the FDIC

by Luke Landes

October 6, 2008 Update: The FDIC has increased the maximum deposits covered under federal insurance. The new FDIC coverage limits are outlined here. Without getting too specific about the company I work for, a large company like mine has to make efficient use of its financial assets. Most of a company’s money should be invested ... Continue reading this article…

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Your Money in the Bank is Safe

by Luke Landes

Earlier this month, IndyMac, a bank and mortgage lender, collapsed, and through an interesting process the Federal Deposit Insurance Corporation (FDIC) assumed responsibility of the bank’s deposit accounts. This collapse, only a few months after NetBank closed and its deposits were acquired by ING Direct, has people everywhere worrying about their money. The government and ... Continue reading this article…

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Have You Cut Your Expenses Due to Gas Prices?

by Luke Landes

A recent Nielsen study revealed that almost two-thirds of consumers in the United States, many more than those surveyed just one year ago, have cut back their expenses, specifically due to escalating gas prices. According to the study, which queried about 50,000 consumers during the first week of June, when regular gas averaged $3.98 per ... Continue reading this article…

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Baseball Cards Aren’t Fun Anymore

by Luke Landes

Back in the late 1980s, I collected baseball cards just like millions of other kids. That’s around the same time that popularity of baseball card collecting skyrocketed and the producers of cards — and Major League Baseball — ruined the hobby, never to recover. Taking advantage of collector — and even investor — interest, the ... Continue reading this article…

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GnuCash: Free Software for Balancing Your Checkbook (and More)

by Luke Landes

Nicholas emailed me with this question. I’m trying to find some kind of free accounting software for balancing my checkbook, and that sort of thing. I already use Mint.com, but it isn’t much good if I plan on writing a check, or if I want to create a recurring transaction. I don’t need something to ... Continue reading this article…

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Is it Finally Time for Market Optimism?

by Luke Landes

The Dow and the S&P 500 indexes were both up 2.5 percent and the Nasdaq index was up 3.1 percent today. Is this a sign of things to come? I wouldn’t mind if it were. My 401(k) has been decimated this year. That’s a literal decimation, a reduction of 10 percent of its value. Based on the short ... Continue reading this article…

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