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Monday, March 8, 2010

Financial Management Idea: Consider Online Banking !!!

By Claudia Leahy

Hello all,

I have recently started looking into where I want to put my money and I think that online banks is a great option (until I have more money, then I may consider stocks, bonds, mutual funds, and more complicated options). For now it's online banks. Let me tell you about them

Online banks are a great way to invest your money since they offer a higher interest rate than traditional banks because they pay less overhead (no bank tellers, electricity bills, office supplies, etc). Also, they typically have very nice customer service which you can email, call, or instant message in some cases. If you are comfortable using the internet, there is no reason you shouldn't have an online bank. Compare: Traditional Savings Account: .5% APY. Online Savings Account: 3% APY. That's huge. For example, if you invest $5000 for 5 years, that is the difference between earning $126 in interest versus $796! Make your money do more for you!

I've recently been looking at online banks and I made a list of online banks and their features. I think this is very useful and I wanted to share. Please take a look!

E-Trade Checking Account

APY  0.15%
ATM Refund all fees
Checks Initial check book free ($8.75)
Initial Deposit $100
Minimums No
Debit Card VISA
Features --
Hmmm --

E-Trade Complete Savings

APY 0.5%
To open $1
Features ---
Minimum balance  No

HSBC Online Payment Account

APY 0.85%
ATM Reimburse fees for first 3 months
Checks Not available
Initial Deposit $1
Minimums No

HSBC Online Savings

APY 1.1%
To open $1
Features ---
Minimum balance No

ING Checking Account

APY 0.25%
ATM Allpoint Network?
Checks Electronic checks or have them send it for you
Initial Deposit $1
Minimums No
Debit Card Master Card
Features No insufficient-funds fees; instead, pay interest on borrowed money.
Hmmm ---

ING Orange Savings Account

APY 1.1%
To open ?
Features -- Option to automatically transfer money into savings account.
Minimum balance No

JP Morgan Chase Free Checking

APY None
ATM Does not reimburse
Checks Free checks for life
Initial Deposit ?
Minimums ?
Debit Card Master card (rewards $0.03 per transaction
Features  One single overdraft or NSF fee absolved per day; $12 for overdraft transfer service

JP Morgan Chase Online Savings

APY 0.1%
To open ?
Features --
Minimum balance $300 each day or $4 service charge

FNBO Bill Pay Account
No information provided - very confusing.

FNBO Direct Savings Account

APY 1.25%
Apparently, that's all they think we would want to know. If anyone finds more information, let me know.

EverBank FreeNet Checking

APY 1.46% (introductory)
ATM $6/month reimbursement
Checks First book free
Initial Deposit $1,500
Minimums $1,500 ($4.95 monthly fee)
Debit Card Visa
Features Overdraft protection

EverBank Money Market

APY 2.25% introductory, then 1.51%
To open $1,500 
Features -- .
Minimum balance $1,500, $4.95 monthly if you go under the minimum

Fidelity MySmart Cash

APY 0.10%
ATM Reimburses all fees
Checks Unlimited free checkbooks
Initial Deposit $1
Minimums No
Debit Card VISA with rewards program
Features Money transfer feature notifies you if you have a balance of more than a specified amount so you can invest in options with a higher interest rate.  Overdraft protection.

The Fidelity Account (brokerage)

APY: Depends on what you invest in.
To open: $2,500
Features: Invest in stocks, money markets, etc. Some fees apply (of course). But there is no broker fee.
Minimum balance: $2,500 I assume

We all value different things. For example, I want to have an online savings account and online checking account in the same place. Also, I want both to be interest-earning accounts. I also need accounts that have no minimum balance requirements. Thus, the HSBC account looks best at first. HOWEVER, I also really want paper checks, which HSBC doesn't offer. So, I might go with E-Trade. If I were only looking for a checking account, on the other hand, I would certainly go with Fidelity MySmart Cash because that account is obviously superior to the others.

Ok, my point is check it out. Find what's best for you. Sign up. Stop wasting time and money.

Man, I feel like a walking commercial. But it's SO true.


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