Online Savings Accounts

[heyaim]

Would you recommend one over another? My savings account at my local bank is .05% ... I'd like to put most of my emergency fund in an online account with higher interest rate (keep $1500 in my local savings account).

[Goldy]

I made the switch last year from Wells Fargo to Ally and absolutely love it. We still have a small account with wells because some times you need a brick and mortar bank but for the other 364 days ally is perfect.

[heyaim]

Thanks so much! Exactly what I needed to hear.

[bjl584]

I used to have accounts at Igo Banking, HSBC, and Ally back in the day when I would chase interest rates. I've closed them all and just have some cash sitting at my local bank. They have a website that I use all the time to transfer money in and out, and with interest rates so low everywhere there really is no point in moving the money right now.

If I had to pick one that I've used, I'd go with Igo Banking. Good customer service and high interest rates. I haven't had an account there in several years though, so I'm not sure what it may be like there at present.

[cooliemae]

I would go with ally...they've got 0.9% on regular savings, with 0.91% on their no-penalty 11 month cd.

Ally also offers cd's with a two month penalty, which is way better than other banks. For example, if you were to put $1,000 in a 5-year cd at 1.59% and planned to take it out after 12 months you would have gained $13.34 after the penalty. The same $1,000 in a one year cd would have made you $9.95 and the regular savings after that period (assuming no interest rate changes) would have given you $9.04.

I have a mix of cash in savings and short cds, but am now moving towards longer ones understanding that it's a better investment (at least at ally - because of smaller penalty) even if I need the money sooner.

[cascade11]

I would go with ally...they've got 0.9% on regular savings, with 0.91% on their no-penalty 11 month cd.

Ally also offers cd's with a two month penalty, which is way better than other banks. For example, if you were to put $1,000 in a 5-year cd at 1.59% and planned to take it out after 12 months you would have gained $13.34 after the penalty. The same $1,000 in a one year cd would have made you $9.95 and the regular savings after that period (assuming no interest rate changes) would have given you $9.04.

I have a mix of cash in savings and short cds, but am now moving towards longer ones understanding that it's a better investment (at least at ally - because of smaller penalty) even if I need the money sooner.

Early withdraw penalties are also tax-deductible on your income tax return. So tack on a few more bucks onto that "$13.34".

I paid about $50 in Ally Bank withdraw penalties last year, because I was chasing yields in I-Bonds and elsewhere. I'm in the 15% bracket so another $8 in my pocket.

[kv968]

I've used Ally for my emergency fund and paying some bills for the past 6-7 years and I think they're great. Very good customer service whenever I needed them.

[feh]

Another happy Ally customer here.

I've chased higher interest rates, and you can probably find someplace paying .05-.10 more than Ally, but in my experience the cruddy customer service you receive is not worth it.

Ally offers very good rates and they're large enough to provide professional customer service.

[~bs]

i use ingdirect, more for convenience, and because there's times when I need almost instantly available cash. Think their rate is .70 APY, which is pretty much nothing. For me, CDs don't work at all, even if I ladder them. It's either longer term investments or short term cash for me.

[phantom]

I'll put another vote in for Ally. I found a local bank with a better interest rate, so I don't have much in my Ally savings right now. But, Ally definitely has excellent customer service and relatively good rates.

Since a couple of people have mentioned Ally CDs, I would also add that they offer a loyalty bonus when you renew a CD with them. You can even change the length of the CD or the amount you have in it and still get the bonus. Technically, they could stop offering the bonus at any time, but it was still in place 2 months ago when my last CD matured.

[scfr]

Other options: Barclays at 1% and American Express Bank at 0.9%. No minimum balances.

Just remember that you will need some lead time to move funds, and will need to keep a brick & mortar bank to link to, so you probably won't want to go 100% on-line.

As far as that brick & mortar account goes, check out the smaller local banks in your area. They often offer better interest than the "big chain banks.'

[feh]

Other options: Barclays at 1% and American Express Bank at 0.9%. No minimum balances.

Just remember that you will need some lead time to move funds, and will need to keep a brick & mortar bank to link to, so you probably won't want to go 100% on-line.

As far as that brick & mortar account goes, check out the smaller local banks in your area. They often offer better interest than the "big chain banks.'

Yes to all of the above. I think we have a fairly standard setup:

1. local credit union for checking
2. online bank (Ally) for emergency fund and/or infrequent large purchases
3. retirement/brokerage accounts

[Goldy]

I'll put another vote in for Ally. I found a local bank with a better interest rate, so I don't have much in my Ally savings right now. But, Ally definitely has excellent customer service and relatively good rates.

Since a couple of people have mentioned Ally CDs, I would also add that they offer a loyalty bonus when you renew a CD with them. You can even change the length of the CD or the amount you have in it and still get the bonus. Technically, they could stop offering the bonus at any time, but it was still in place 2 months ago when my last CD matured.

How much is the bonus if you dont mind me asking?

[cooliemae]

It looks like it's a .25% bonus on top of the new rate.

[heyaim]

Thanks for all the input! We opened an account at ally. Looks like it will serve the purpose well.