Highlights: FNBO Direct, E*TRADE Bank, ING Direct, HSBC Direct, Ally Bank.
There are two main criteria I use to determine the best online savings account and to choose where to put my money when it comes to short-term savings: interest rates and customer service. Interest rates are important because I don’t want my money to lose purchasing power. I’m looking to beat inflation, and many banks do not offering a savings option with high enough interest rates.
In terms of customer service, I look for two important aspects. All account maintenance and transfers should be available through a professional and reliable website. The site should be easy to navigate. It’s rare that I have to call or email a customer service representative, but when I do, I like for them to be knowledgeable, helpful, and available.
Based on my own experiences and reviews from other Consumerism Commentary readers, here are our favorite places for short-term savings. All of the listed interest yields are as of October 2, 2009 and are subject to change by the banks. And here’s a secret: You don’t need to have accounts with many different banks. One or two good banks will do.
FNBO Direct. No fees, no minimum balance. Recently rated best online savings account by Kiplinger, FNBO Direct is the online arm of First National Bank of Omaha. Since opening this account in September, I’ve been directing most of my new deposits here. 1.50% APY.
E*TRADE Bank. No fees, no minimum balance. I’ve been a customer of E*TRADE for several years, mainly for my company stock purchase plan. 0.50% APY.
ING Direct. No fees, no minimum balance. ING Direct has a great website and I’ve never had any customer service problems. My favorite feature is the ability to split your account into several labeled subaccounts. 1.3% APY.
Note: ING Direct offers a $25 bonus to new customers who deposit $250 or more. Once you have an account you can earn $500 by referring other customers. Get a $25 bonus here.
HSBC Direct. No fees, no minimum balance. HSBC Direct entered the race with one of the highest interest rates ever available on a high-yield online savings account, 6% APY. That was about two years ago. Since then, HSBC Direct has continued to be towards the top of any list of online bank accounts. 1.35% APY.
Ally Bank. GMAC Bank is now Ally Bank, and the company has started a marketing campaign and using high interest rates to draw in new customers. Savings accounts, CDs, and money market accounts at Ally Bank are insured through the FDIC so as long as you don’t go over the FDIC limits, GM’s bankruptcy should not affect your deposits. 1.55% APY.
What is your favorite online savings account? Share your thoughts in the comments below. Here are a few more banks to round out the selection.
- Discover Bank is offering 1.85%.
- Presidential Bank is offering up to 1.25% APY.
- VirtualBank is offering up to 1.82% APY.
- DollarSavingsDirect is offering 1.70% APY.
I’ve received a number of requests to add EverBank to this list. Please read my thoughts about EverBank so far. EverBank is currently offering a 1.51% APY with a bonus rate up to 1.77% for the first year for new accounts including a 3-month bonus rate of 2.51%.
For more, see this list of high-yield savings accounts. I have been tracking the rate changes for almost a year, and this list gives you an idea of who has been consistently offering high interest rates.
Email this article
Print this article
Share this article: Twitter | Tip'd | Facebook | Delicious | Reddit | Digg
About the Author
