Which one

[wolfy]

I am trying to set up an emergency fund again. Where I currently bank is one of those that require me to keep a minimum each month in a savings to avoid fees. So I am looking at either a credit union or an online savings account.

I know the online accounts usually take about two days to get the money and pays better interest I can also open more than one account (EF, medical, etc...)

The credit union would be available whenever i could get there. I am not sure if a Credit Union will let you have more than one savings account or make you do only let you get the money out once a year.

Eventually, I would like to start saving separately from our EF for medical expenses. I'm tired of getting those surprises. Some of the online banks will give you a debit card to use with the account.

I'm open to suggestions on why go with one or the other. Maybe I'm over thinking this. I just don't know.

[kork13]

You might consider going with Ally, or ING Direct. Both currently offer about 1% interest (fairly standard for online savings accounts right now, and about 10 times higher than most regular banks' savings accounts). Also, both allow you to set up a bunch of 'sub-accounts', where you can basically have your money within the one account, but separate it out according to purpose (general savings, medical, car, etc).

All of that said, I think you should also maintain a local bank/credit union account (preferably one with good online access features). That will make depositing/withdrawing money from the online savings account much easier, and give you an option of walking in to do business then transferring money to/from the OSA as required.

[timbuckley10]

I am always an advocate for online savings accounts. The interest rates are completely worth it and I think that they are perfect for Emergency Funds. Of course if in your experience you think you might need access to your funds sooner than an online account can provide, then that is certainly something to think about. Go through your past experiences mentally of times you could have used an Emergency Funds and think about if a 2 day transfer period would have been feasible for you.

If not, then go with a Credit Union.

[mcfroggin]

ING DIRECT all the way. PM me your email address and I can get you a free $25 for signing up.

[Slug]

ING is not the obvious choice anymore considering it's recent sale. I have accounts at both Ally and ING and like them both pretty equally.

[Petunia 100]

While transfers from your online bank to your brick and mortar bank take a few days, transfers from your online bank savings to your online bank checking are immediate. Your online bank checking account comes with a debit card which can be used anywhere. Additionally, Ally has money market accounts which come with checkbooks.

I think it is also good to have a relationship with a credit union. Typically, they have the best loan rates. If you have occasion to need a loan, it is nice to get one at the best possible terms. You can be a member of a credit union by maintaining a small savings account, you don't have to do all of your banking there. Mine certainly doesn't have appealing savings, checking, or CD rates.