Online Savings Accounts & Current Rates

[poundwise]

Updates, May 26th:

Provident down from 3.75% to 3.50%
AmTrust down from 3.25% to 2.75%

E-LOAN still at 3.01% but offering a promo for new accounts at 3.75% (guaranteed through July 31st)

New addition:

FirstFedDirect at 3.01% with a $1K minimum


As always, check out the complete SavingAdvice Online Savings listing by viewing the first post of this thread. (Hint: Bookmark it!)

[poundwise]

Comments:

Some general comments about this listing.

#1 - Exclusive arrangements are not included in this listing. If you have to qualify to be a member of a certain organization or have a certain credit card, etc. then it will not be listed. If an account is with an organization or credit union that is easy for anyone to join, then it will be considered for listing with a note indicating such.

#2 - The listing has a focus on accounts that require between $0 and $1K to open and to earn the stated interest. If accounts or the institution offers more for higher balances, it will be noted. Not only does this let people compare apples to apples, but it avoids having a multiplicity of accounts paying middle-of-the-road rates while yet requiring $10K to open.

#3 - There is a lower limit to appear on the listing. If you look at the top five accounts in the listing, specifically, the interest rate given by the fifth account on the list, and subtract one full point from it, that is, in general, the lowest APY that will be listed. (Example: As of this post, the current number five offering is at 3.41%. That means, I will not list an account offering less than 2.41%. As you can see, the account currently listed last is at 2.60%.) This rule is flexible but, in general, is how I determine what qualifies for the list.

[weissheit]

Does anyone know for certain whether you have to be 50+ years old to qualify for the AARP accounts?

BTC, I checked & you do not have to be 50+. AARP has what is called an "associate membership" open to people of all ages. I figured it was a win-win. I get a decent interest rate on my cash reserves and my mother gets all the AARP information w/o having to deal with the marketing that will surely follow. Plus anyone with an elder parent should be well versed in elder care issues, and AARP is likely one of the better sources. I will not be telling anyone that I am a member of AARP other than my mother and she will be sworn to secrecy!! Good luck.

[weissheit]

Or, as listed, a high yield money market at 3.00% with no minimum and no fees.

I will add a note to the listing that if you have more than $10K they offer an account at a higher rate.

Thanks Poundwise

[poundwise]

As AARP membership is open to anyone, I've added their current high yield savings offering to the list.

[Conqueror Kang]

Hey guys, I'm new here, though I've been following this thread for about 3 weeks or so now.

First off, I tried to use the Search Bank feature on the FDIC site but for some of them, none of their names popped up (I either used the name they had or their FDIC # I think). Just wondering how do you guys verify this?

Second, I found this bank at the side of another blog I visited and recently here as well:

indymacbank.com/

Though it doesn't say it anywhere, this went from 4.00% APY to 3.85% (for the Money Market Savings account), with a $1K minimum. Just wondering what your thoughts are (and againl, while I tried to search in the FDIC site whether this bank is insured, I didn't find it anywhere using its name for in the search field.

Thanks.

Edit: I don't mean to break the rules, but I wanted to know if the site above is real or not, sorry again.

[weissheit]

Hey guys, I'm new here, though I've been following this thread for about 3 weeks or so now.

First off, I tried to use the Search Bank feature on the FDIC site but for some of them, none of their names popped up (I either used the name they had or their FDIC # I think). Just wondering how do you guys verify this?

Second, I found this bank at the side of another blog I visited and recently here as well:

indymacbank.com/

Though it doesn't say it anywhere, this went from 4.00% APY to 3.85% (for the Money Market Savings account), with a $1K minimum. Just wondering what your thoughts are (and againl, while I tried to search in the FDIC site whether this bank is insured, I didn't find it anywhere using its name for in the search field.

Thanks.

Edit: I don't mean to break the rules, but I wanted to know if the site above is real or not, sorry again.

I do not have link posting privileges yet, but marketwatch recently had an article about FDIC bringing back the regulators that closed down all the failed S&Ls of the 80's & 90's. The cited 2 criteria of a troubled bank, the "Texas ratio" (named after all the oil patch S&Ls that went under) of non-performing/defaulting loans/assets to depository assets (not sure going off memory) and high CD rates. A texas ratio of 100% plus combined w/ high CD rates (the price of capital) = default. Indymac was highlighted as a bank that is on its way to fulfilling these criteria. Texas ratio is 40% (after being in the low single digits just last year) and they have very high interest rates to attract deposits. They were an alt-A mortgage loan specialist so it appears that they will not be around for much longer. I'd steer clear of them (personal opinion).

[poundwise]

IndymacBank was listed previously but fell off the list by lowering its rate. Now, it appears that they have a new offering; the "Online E-Money Market" which qualifies, so I'm putting them back on the list. (However, Indymac Bank is mentioned as one that is in "dire straits" by the MarketWatch article; FYI.)


As for FDIC insurance, each of the accounts listed here are FDIC insured.


If you are looking up FDIC info for online savings accounts, you'll have to make sure that you are looking at the root name for the bank behind the online offering. For instance, OnBank is a Division of M&T Bank, N.A., Savings Square is a product of Kirkpatrick Bank, etc.

[poundwise]

...marketwatch recently had an article about FDIC bringing back the regulators that closed down all the failed S&Ls of the 80's & 90's. The cited 2 criteria of a troubled bank, the "Texas ratio" (named after all the oil patch S&Ls that went under) of non-performing/defaulting loans/assets to depository assets (not sure going off memory) and high CD rates.

Here is a link to that article: MarketWatch - Bank Failures to Surge

[Aleta]

Poundwise: Thank you for setting the rules out on what you report. Most of us joined up with Suze Orman's Save Yourself Plan because of the promotion. My concern is that there may be those that are adding in more money than the required monthly $50 deducted from our accounts.I would just caution anyone that is adding funds to a money market that pays so little.

[qnguyen010]

So here's my issue with online savings accounts.. please let me know if this is not something i should be worried about..

i'm a college student with 3 CD's totaling 18k.. i wanna leave those alone and start a savings account from scratch so i have a more liquid approach.. my only concern is that since i wont be putting much money into the online savings account at a time, would it be a waste since i have to pay a transfer fee to get funds from my wachovia checking account to the online account? ...not sure if im explaining myself well.. but any advice?

[weissheit]

So here's my issue with online savings accounts.. please let me know if this is not something i should be worried about..

i'm a college student with 3 CD's totaling 18k.. i wanna leave those alone and start a savings account from scratch so i have a more liquid approach.. my only concern is that since i wont be putting much money into the online savings account at a time, would it be a waste since i have to pay a transfer fee to get funds from my wachovia checking account to the online account? ...not sure if im explaining myself well.. but any advice?

Dump Wachovia & get a bank that does not charge transfer fees. I've shunted money b/t my brick-n-mortar and online banks for years and never incurred a fee. The simplest solution would be to get a bank like provident or HSBC where that has both options and you can manage your accounts online or at the local branch.

[Aleta]

Once you have an online bank such as ING Direct, Emigrant, or any bank for that matter; they will allow you to set up different banks that you can transfer money from. The key might be in you getting the savings account first at another bank. I had a similiar problem with my own bank and I realized the beauty of having an online bank somewhere else.

As for the savings, you can deposit as little as a dollar in some. Don't be too concerned about the small amounts; they grow quickly.

Also, HSBC will give you an ATM card that you can use locally to add or withdraw money from.

[poundwise]

my only concern is that since i wont be putting much money into the online savings account at a time, would it be a waste since i have to pay a transfer fee to get funds from my wachovia checking account to the online account?

You do not have to pay a transfer fee.

I have a relative who has a Wachovia checking and we set him up with an online savings account about a year ago. Once you link the accounts (typically done when you apply and are approved for the savings account) then you can transfer money in and out without any charges.

[The only caveat being that, per federal regulations, you can only withdraw/transfer-out money from your savings six times per month. This does not apply to deposit/transfer-in transactions.] more

[weissheit]

Captial One's kicker interest rate if you have 10k+ in their online high yield account has been reduced to 3.5% APY. On a positive note Capital One has partnered with Costco to offer a middle ground b/t their 3% account and 3.5% high balance rate. If you are a Costco member and you open an account w/ a 100 USD minimum then you get 3.2%. If you are an executive member of Costco and fund the account w/ 5k w/in the 1st 30 days of opening you will get a 50 USD bonus.