See the review of the best online savings accounts – updated August 18, 2009.
While I’m generally happy with my ING Direct account for a good portion of my savings, I’m looking to spread the money around to take advantage of some higher interest rates. One of the banks I’ve targeted is FNBO Direct, the online arm of First National Bank of Omaha, currently offering 3.50% interest yield.
FNBO Direct is a member of FDIC, so deposits at the bank are insured. As long as balances stay below the limits set by the FDIC, I won’t have to worry about the safety of my money.
Opening My Account at FNBO Direct
Opening a savings account at any bank takes several days from start to finish, and FNBO Direct is not an exception. I started the process this past Sunday.
Step 1: Visit FNBO Direct and fill out an application.
When visiting FNBO Direct for the first time, you are presented with the option for starting a new application or continuing an existing application.
Along with the basic information, FNBO Direct requires you to confirm your identity with a driver’s license. You will need to provide your occupation, the name and address of your employer, the source of your main income, and interestingly, the source of the money you are using to open the account.
To verify your account information, FNBO Direct will ask a few questions related to items on my credit report, customized to the individual. For example, I was required to select my monthly installment amount for my student loan from a list of several ranges. As I’ve been paying more than my installment amount for the last few years, I wasn’t completely sure that I could guess the correct amount. I selected my best guess and FNBO allowed me to continue.
After providing all the appropriate information for your application, the bank’s decision to grant you an account will be presented immediately. In my case, I was approved, and I expect you would be as well. After approval, the bank requires a signature card. With traditional brick-and-mortar savings account, your signature is kept on file, but with modern technology, FNBO Direct accepts an online form submission as a substitute for a signature. Here is mine.
After submitting the signature card, FNBO Direct will offer you an ATM card. At this point, I couldn’t remember if any fees are associated with the ATM card (there aren’t), so I declined. It’s unlikely I’d ever access this account via an ATM or at a point of sale. This account will solely be for savings, and I will initiate any transfers from bank to bank online. If you would like an ATM card, select the option here.
The last step of the application process is to provide a routing number and bank account number for the account that will provide the initial start-up funds. I chose to transfer $1,000 from ING Direct to start up this new savings account at FNBO Direct.
After the bank account information is verified, your application is complete. FNBO Direct will make two small deposits in the external bank account which must be verified before the initial deposit will take place.
Step 2: Verify test deposits and initiate opening balance transfer.
The small deposits didn’t appear in my ING Direct account until Tuesday. As you can see from the image below, FNBO Direct posted a $0.25 item and a $0.17 item to the account from which my initial transfer will occur. Some banks with withdraw these trial deposits once verified, but FNBO Direct has left the $0.42 gift in my ING Direct account as of Friday morning.
To verify your trial deposits, return to the application at FNBO Direct. Once this is complete, your application is again complete and FNBO Direct will return you to the website’s home page without further instructions. I tried logging in to FNBO Direct to view my account, but I was unable to as I was not yet able to choose my user ID.
Step 3: Create your user ID and password.
On Tuesday night, I received an email from FNBO Direct to inform me that my opening deposit had been initiated. You can expect the funds to be transferred within three business days. In this email, there were still no instructions for creating a user ID and password. For that I would have to wait until early Wednesday morning.
I received another email at that time stating that my account was ready to open, followed by yet another email less than an hour later informing me that my new account was now available online. This email contained instructions for accessing the account:
If you have not yet chosen a User ID and password, you can do so by returning to your application. Simply visit www.fnbodirect.com, click on the “Return to Application” tab, enter the requested identify information to access your Application Summary, and click the “Activate” button at the bottom of the “Application Summary” page.
At this point, you will create your user name, password, and establish two security questions such as, “What was the name of your best childhood friend?” and “Favorite sports team?” These questions help to enhance the security of online access.
Wednesday afternoon, I checked my ING Direct account again. My $1,000 initial deposit had been debited at this time. I proceeded to log into my new FNBO Direct account, and the opening transfer was not yet included in my balance. At this point, my deposit was “in transit.”
As of Thursday night, this status had still not changed.
Impressions of the FNBO Direct Savings Account
The application process was fairly smooth, if a little slow. While it would be nice to be able to establish and fund a new account at a bank in under 24 hours online, modern security and ACH transfers take extra time. Some of the delay could have been eliminated throughout the first few steps of this process, however.
Like ING Direct, once your account is established, you can add links to external bank accounts to initiate transfers. FNBO Direct also supports links to external investment accounts for a limited number of brokers, including E-Trade, Fidelity, TD Ameritrade, and a few others. Like all savings accounts, FNBO Direct requires that you place no more than six withdrawals from your FNBO Direct account during any month.
Based on my experiences so far, I would recommend FNBO Direct. The application process was easy and the current interest rate, 3.5% APY, is one of the best for a bank considered to be stable.
Update: As of Friday morning, my FNBO Direct balance includes the opening deposit. Now complete, the account opening process took four business days.
If you are a current account holder or if you open a new account following my experiences, let me know your impressions of the bank.
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{ 8 comments… read them below or add one }
I love FNBO Direct – besides transfers between banks seeming a bit sluggish, I’ve had no issues. Their customer service has been fantastic in the 3 years I’ve banked with them and the interest rates are consistently among the highest.
I have been with FNBO for a couple of years now and I have to agree that everything has been great with them. Another tip for your users is that you can use their routing number to set up direct deposits AND withdrawals (up to 5 a month I think) directly from your savings. I pay my mortgage directly from my savings so I am earning interest up until they day they pull it out!
FNBO Direct Routing Number:
104000016
I opened an account today with FNBO, following your experience.
Mine was a little less smooth. I don’t have a home phone number, only mobile phones, so when I tried to apply, I was declined. I sent an email and followed up with a call the next morning. They said the application review office was closed, but that they would follow up and email me.
About an hour later, I received an email saying that my application was approved! No reason as to why it was declined, or why it was now approved.
So I continued applying, since it’s a joint account, I needed to enter the same information for my wife. Again, the same phone number problem (I believe) and I had to call back. I told the service rep what I thought had happened, and was put on hold for about 5 minutes. When they came back, they said that she was now approved and in 10 minutes I would be able to continue applying.
So I was able to finish the application and initiate the transfer from ING. I’m just waiting for the small deposits now.
While I was very happy with how I was treated by customer service, I am concerned about the security. If all I had to do was call to get approved, that seems sort of lax. If the lack of a home telephone # is the only reason we were declined, then it makes sense, but I wonder if it’s that easy to get approved if something else is wrong?
I can update if anything else exciting happens.
Looks like FNBO dropped their rate. Right after I opened the account, too.
Josh: That’s right. I received an email alert today. The FNBO Direct savings account APY is now 3.25%.
My process was very smooth, I opened my account in under 15 minutes and because my bank (United States Automobile Association) is primarily an online bank, I was able to verify my account using my log-in and password from my USAA account. It was really smooth and quick , two business days. I was a little dissappointed because I read somewhere that a little while ago, FNBO Direct was offering a 6.00% APY, but it dropped within days to 3.50%, so I wasn’t surprised when I read in that the rate had dropped again. All in all, still a really good deal and I’m glad I did it.
FNBO Direct had been offering 3.50% since February. I believe when they started back in 2007 their rates were 6.00%, but they’ve only dropped when absolutely necessary and still continue to be very competitive with their rates. They’re still one of the best.
I found the customer FNBO Direct customer service to be very good but their web-site and enrollment process quite poor. It’s not that it doesn’t eventually work but it isn’t smooth, straight-forward and quick. I just does not impress me as a first-rate online system. I found many errors in their enrollment process and had to ask customer service for help. Also the online banking web-site UI layout is the worse of all that I use. I have yet to check if they support MS Money software integration but I’m not hopeful given what I have seen so far.
As an example of a poor on-line system; once I have my savings account established…which took too long. Why do I have to go through a similar manual process to setup online bill-pay? They already have all my information why ask again?