As some of the more popular banks like ING Direct, HSBC Direct and FNBO Direct lower their interest rates, other less-known banks are appearing in their place with higher rates. Some of these banks do not have reputations yet and haven’t been in the public eye for long. Here are a few that you may want to consider, all FDIC insured.
Venture Bank Direct is the new online-only arm of Venture Bank. The Venture Bank Direct “Wise Choice Savings” account has no minimum balance requirement and is currently offering an interest rate of 3.8% APY. Venture Bank is rated two stars by BankRate.
As with all savings accounts, you are allowed to make six withdrawals from the account in any one month period. However, only the first three withdrawals are free; any additional withdrawals are assessed a $1 fee. You can deposit money up to 3 times in one day via ACH with a maximum total of $50,000. You are limited to no more than 3 ACH withdrawals per day with a maximum total of $10,000.
Venture Bank Direct offers support for downloading your activity into Intuit Quicken and Microsoft Money.
DollarSavingsDirect is a new online offering of Emigrant Bank, similar to Emigrant Direct. Emigrant Bank is also rated two stars by BankRate. DollarSavingsDirect offers the “Dollar Savings Account” with a minimum balance of $1,000. DollarSavingsDirect is a reincarnation of Banco Fortuna, Emigrant Bank’s former Spanish-language branch.
While Emigrant Direct’s rate has fallen, DollarSavingsDirect is offering a 4.0% APY, one of the highest rates currently available. Keep in mind that the FDIC will insure your deposits at Emigrant Direct, DollarSavingsDirect, and Emigrant in aggregate, as these banks share an FDIC certificate. For example, for an individual account you can deposit $200,000 in each of these three “banks,” but only $250,000 of your $600,000 would be insured.
I mentioned ShoreBank earlier this year alongside other high-yield savings accounts. ShoreBank, rated two stars by BankRate, expects a $1 minimum balance with its online savings account. The account earns 3.5% APY and is FDIC insured.
This bank focuses on the community and environment. Deposits placed with ShoreBank help fund environmentally-friendly development as well as projects like mortgage rescue programs. Fast Company profiled ShoreBank earlier this year.
If you have experiences with these lesser-known banks, please share your thoughts.
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DollarSavingsDirect’s offer is a 16 month CD. Or am I completely missing something?
Will: DSD is offering both a savings account and a 16-month CD, both with 4.0% APY, hence the two big “4.00%” graphics on the website although they didn’t make that completely clear. If you think interest rates will go down within the next year (and you are willing to not touch your money for that long), stick with the CD. Otherwise, go with the savings account.
I’m not sure why, but I never hear much mention of GMAC Bank. They currently offer a 3.75% APY for their online savings account. I’ve had the account for years now with no problems & the rates have always stayed competitive.
Another plus for GMAC Bank is that they just recently removed their monthly fees for balances under $500. Also, their electronic ACH transfer service is one of the best. Transfers are fast and it’s easy to create links to many external accounts.
While not sure and have not checked this, does a higher rate from a bank mean more risk like FDIC intervention? Wonder if that is true Flexo and if you have some insight into this from your blogging?
i currently have accounts at ING direct (2.75%) and emigrant (3%). my emergency fund is at ING and my house downpayment fund is at emigrant. i’ve just started saving for the house, so i only have about $1500 in there right now. however, by this time next year i’ll have about 10k. do you think it’s worth it to open at account at dollar savings direct for a 1% increase?
I’m still insulted that DollarSavingsDirect exists — seems like a slap in the face to EmigrantDirect customers and a way to get around offering us a higher interest rate. The fact that the websites are near identical just makes things worse.
I’m quite happy with Venture Bank Direct, especially the 3.8% APY. I’ve only had to contact their customer service for help once, but they were fast and courteous. They are definitely worth trying!