1.03.2007

Online Banking

A friend recently asked me what I think about ING's new online checking account. I did not know much about it so I checked out Bank Deal's site and found a nice post.

The savings rate is ok for balances under $50k. If you have more than $50K in cash, it seems silly to keep it in a checking account. They do not issue check books and you cannot use all ATMs for free. I actually have an online bank account with Citi. I signed up during the height of the dot.com foolishness because they were giving out free Palm Pilots. I still keep the account but I have very little cash in it because the interest rates are sad. I keep it because I can use any ATM with no fee from Citi and complete reimbursement of fees from any other ATM up to a monthly limit which I never go over.

I actually use my etrade brokerage as a savings account as I have a tax free money fund (which helps since I live in Mass.). And I can transfer funds back and forth from etrade to Citi whenever I need to. I use Yodlee to keep track of all the accounts side by side and to keep track of the log-in info.

etrade actually has ATM cards and check books for their brokerage and I know someone who was trying to use their brokerage as a checking and savings account all in one. I will try and see how it is working for them...

If I were to open any new bank account I would choose eloan as they seem to have the highest rates on savings accounts among the better known online banks- but they do have a $5000 minimum...

6 comments:

David Jones said...

I keep and Bank of America Savings and Checking, and I keep and Etrade Brokerage account. With my Etrade card, I can withdraw money whenever a BOA ATM isn't around and Etrade will pay the fees.

Jouissance said...

why do you bother with the BOA account since etrade has an ATM card and a checkbook?

David Jones said...

Etrade only refunds 4 withdrawals per month I believe.

also, I haven't researched whether I can do direct deposit, etc into my Etrade account.

Jouissance said...

ah- my citi only refunds a certain amount a month as well- but i only get cah 2-3 times per month anyway so it works for me.

As far as etrade direct deposit goes- Read this The 'securities' not 'banking' option is the one you would do.

Aharon said...

I'm curious about this account because it's an interest bearing checking account. Of course I would use something different to save money, but I'm wondering if there is a better solution for a checking account out there. I'd like to get some interest on the little money in my checking account and getting some seems better than none.

Jouissance said...

If the amount you would actually keep in the account would earn enough interest at 3% to make it worthwhile to not be able to write a check on the fly, then go for it. Otherwise, I would just stay on top of keeping your money in a savings account and transfering over into any old checking account as needed.