Additional Info for Online Savings Accounts

[buzz]

12345

[bigsaver]

I would probably put e-loan pretty low after how they screwed up earlier this year.

[buzz]

bigsaver, you are with iGObanking now? They are the one that really intrigued me as I was researching all of this.

I have an account with Amboy. I am satisfied overall, but their web interface is absolutely horrible. How is iGObanking's website?

[jukebox9988]

Don't Forget Emigrant Direct!

[sweeps]

I fail to see the point of the financial rating. First, I don't know of one online bank that has failed or disappeared due to financial problems. Second, I see very little correlation with financial ratings and the APY the banks pay. Nor do I see any correlation with the financial ratings and the consistency of the APY's. Finally, and perhaps most importantly, if you're not depositing more than the FDIC limit, your money is totally safe anyway.

[bigsaver]

igobanking(5.30%) interface seems workable for me. Have not tried amboy. I was going to try amtrustdirect(5.36%) in a month or so. I would prefer to reward the online bank with the highest rate. The transfer times seem a touch long, kind of like with HSBC.

[jukebox9988]

The rates fluctuate often that it doesn't make sense to chase a few tenths of a percentage. I prefer online savings accounts with a longstanding reputation. In the event of a crisis (even though most are FDIC insured), the more established institutions will stick around. Just my 2 cents.

[buzz]

I would not want my emergency fund tied up waiting for an FDIC payout.

[poundwise]

First of all, I believe that the Bankrate ratings are lame and pretty much worthless; certainly not cause for fear of impending bank failure. Banks don't just pop up out of nowhere and qualify for FDIC insurance you know. It is a heavily scrutinized and regulated industry. Besides, name the last bank you know of that failed.

At best, it can be said that some concern may be in order for some of the one (and maybe two) star rated banks, but even then, the rankings are relative measures, which Bankrate themselves explains by saying, "...only indicates that certain below average performance factors have been found during the applicable rating cycle... (and) ...does not suggest that we believe direct regulatory action is imminent or even likely."

I must say as well, that based on my experience, identifying these accounts as The Best and The Rest (or similar method) is really quite impossible since there are multiple variables, including both objective and subjective considerations.

For instance, the sort of ranking you propose here does not take into consideration the historical rate offering. Some of these institutions have consistently offered high rates while others fluctuate quite a bit and/or offer a high rate only as a teaser or as what appears to be a quick method to gain new clients, only to lower the rate in short-order. Thus, the current rate may not be indicative of whether or not the rate will be consistently among the top offerings.

In addition, some of these institutions have been in the "online savings" business for quite some time, while others are new to it and thus have not established a track record in more ways than one. This may be a minor factor but it is still a factor.

There also must be some consideration to customer service, web site functionality, speed of transactions, overall quality of operations, other services or qualities of the account or bank, etc.

Items such as minimum balances and requiring minimums to avoid fees are relatively important. For instance, if I intend to park $20K, I hardly care about these factors. If, instead, I am opening an account with $100 and want to put in $50 a month to build up a savings, then I definitely want a no minimum, no fee account.

I appreciate your intentions here and I also appreciate the props you have given to me for the Summary Post of Online Savings Rates thread, however, I must say that, in general, I do not agree with the effort and would disagree with your specifics as well. That is, I would personally only rank three or four of the eleven "Best" on your list at the top of my (ethereal) ranking. I would then add to that at least two from the "Rest" to my "Best", however, again, a couple of points on that list would vary depending on the person asking, the amount of money involved, etc.

Edit: I thought of a couple of other variables. Besides the listed ability (or not) to have multiple linked accounts, some accounts offer access via branches or via telephone while others are online only. The value of this is, again, subjective, however, further illustrates the practical difficulties in establishing an accurate/complete Best & Rest list.

[poundwise]

I fail to see the point of the financial rating. First, I don't know of one online bank that has failed or disappeared due to financial problems. Second, I see very little correlation with financial ratings and the APY the banks pay. Nor do I see any correlation with the financial ratings and the consistency of the APY's. Finally, and perhaps most importantly, if you're not depositing more than the FDIC limit, your money is totally safe anyway.

Bingo.

[gerrard2007]

the financial ratings do not mean anything because they cannot begin to account for one of the biggest reasons a bank fails...FRAUD. A high percentage of bank failures in recent years have been banks with medium to high ratings who were concealing their true financial condition.