Quick Tips!

Earning More With Online Banks


Are you earning 0.01% interest on your savings account?  Thanks to historically low interest rates, you are probably earning near zero interest on the money you worked hard to earn.  Have you looked into online savings accounts?  I've noticed more and more online savings accounts popping up lately and I think you may like the extra interest it can earn you.

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I joined ING Direct several years ago and have loved it since joining.  It has earned more money in interest than any of my other bank accounts.  They have great customer service, and they have nearly all the services a physical bank has, though you may have to get the services in a more creative way.

So what kind of interest can you earn with Online savings accounts?  Recently I saw these rates:
All three have very low minimum requirements to open an account.  These three are some of the highest paying accounts I've seen.  Compare this to the 0.01% you are getting from Chase, yes that's 1% of a percent.  Just by opening an online bank account, you'll be earning 100x more interest!  I also noticed CapitalOne Direct Banking, which offers Business and personal accounts at over 1% APY

OK, I admit there are reasons for not using online bank accounts.  In fact About.com lists 3 reasons not to use online bank accounts.  The reasons are: bad customer service, speed of clearing, and not being able to spend it from your online bank account.

These are good reasons, though I find them all to be false, at least for ING Direct.  I find ING Direct to have great customer service.  You get someone live nearly instantly, every time you call.  The speed of clearing checks can be a drawback, though you can get around it if you plan a little bit ahead.  As for spending your money, ING's Electric Orange checking account lets you access your cash instantly via ATMs in your neighborhood.  I've also recently called Ally bank to find out about it.  The customer service seems just as friendly as ING Direct.

If you are thinking of opening an online bank account, what bank will you go with and why?  Want to join ING Direct?  Find a friend with an account and you'll earn a bonus just to sign up.  If you don't have a friend with an ING Direct account, send me a tweet and I'll send you a referral, we'll both earn a bonus!

Shouldn't your money be earning you a little more pocket change in the Great Recession?  What are your thoughts on online bank accounts?

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Saving Cents in the City: said...

I had a terrible experience with ING direct. (http://savingcentsinthecity.blogspot.com/2009/12/warning-about-ing.html) I just opened an HSBC account and it is really really slow to clear, but it has been okay so far.

FrugalNYC said...

@Saving Cents in the City

wow, that is a bad experience. I would do as you did, if I were in the same situation.

The beauty with competition is, we the consumers have the choice. Have you tried Ally?

ParisGirl111 said...

I like ING because you can set up multiple savings accounts on one log in profile. So, I have 7 different savings accounts for different savings goals. That makes it easier for me to see what I am working towards. :)

FrugalNYC said...


Being able to create multiple savings accounts under one login has been mentioned by many as a great feature of ING Direct. For those with specific goals in mind, this is a great feature - and you can track it and watch it grow.

Thanks for sharing your thoughts!

FrugalNYC said...

A Friend alerted me to another well established brand that offers an Online savings account: American Express Bank FSB. They currently offer 1.5% APY High-Yield Savings.

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