The way banks are dropping interest rates on savings accounts, you would think they don’t want your money. Most “high-yield” savings accounts now offer rates well under 3%. HSBC Direct is the latest to announce an interest rate cut, from 2.6% to 2.45% APY and is currently at 1.55% as of May 2009. Obviously there is more that goes into the decision to cut rates than attracting customers, but online banking is more of a commodity now. Saving and lending money is less focused on community. The sheer number of banks that are available to any customer at a click of a button results in competition, but the field is mostly homogeneous.
For many customers focused on making the most out of their cash, the interest rate is the most important feature of a bank. Friendly tellers and community service are no longer major drivers when choosing an institution to keep money, particularly amongst the surge of online-only banks. The best online banks do focus on customer service and user experience, however. But the bottom line is money. The force of compound interest is so important, and when you’re dealing with significant cash in the bank, you want to ensure your money is earning as much as possible.
When I started seriously managing my money towards the beginning of this millennium, I chose ING Direct because its rate was the highest and it came highly recommended from people I trust. I’ve discovered since then that this bank offers good customer service and a decent online experience, so I continue to recommend them to friends and readers who want to get started. And it’s hard to ignore your ability to earn $525 just for opening a new account there. Their rate is no longer the highest, but it not far behind HSBC Direct, at 1.5% APY.
There are ten fresh referral codes as of last night for ING Direct’s Orange Savings Account. These allow new customers to earn $25 right away for opening a savings account and they are provided by Consumerism Commentary readers. If used properly, with a $250 initial deposit, the depositor receives this bonus while the reader who provided the link receives a $10 bonus. Once a new account is open, the customer should receive referral links of his own to share.