A reader pointed me to an article about high-yield online checking accounts. I’ve been following these stories with a little bit of “interest,” and I’ve already opened a new checking account at ING Direct. This article talks about some of the drawbacks of this account; namely the necessity of a “regular” checking account for transferring funds.
The article also mentioned that HSBC Direct will be introducing a new high-yield checking account by June 2007. I have savings accounts at both HSBC Direct and ING Direct, but I’ve found ING quite a bit easier to deal with for my particular needs. I don’t know that I will bother opening an HSBC Direct checking account when it is rolled out. An increasing number of financial institutions are seeing the benefit of high-yield accounts for attracting customers. This competition is damaging the leader in high-yield savings from 2002 and 2003, ING:
In 2006 ING DirectÃ¢â‚¬â„¢s market share fell to 25% from 53% in 2005. Emigrant DirectÃ¢â‚¬â„¢s market share fell to 12% from 22% to and Capital One from 10% to 8%. Seeing a rise in market share last year were HSBC Direct from 14% to 21%, Citibank from 2% to 19%, and Washington Mutual from 0% to 17%… [T]he banks that showed an improvement did so because of more aggressive marketing campaigns, and offering higher yields in 2006.
Will you consider opening this new checking account? What interest rate would make it worth while? For me, it would have to be significantly higher than ING Direct’s checking account, as long as it offers the same features.
Updated March 24, 2011 and originally published March 27, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.