Online Savings Accounts & Current Rates

[BTC]

E*Trade's yield is down to 1.70

[BTC]

I don't know if it's been mentioned, but Redneck Bank only yields 3.10% on balances up to 35K. It doesn't seem clear to me what happens if the balance exceeds that amount. Do they pay 1.65% on anything in excess of 35K, or does that apply to the entire balance?

Details of Account:
Earns interest of 3.10% APY* calculated on your daily balance of up to $35,000. Amounts over $35,000 earn 1.65% APY*
Includes 6 FREE withdrawals per month
$5 fee for each additional withdrawal

[cooliemae]

ING dropped to 1.5% today! =(

[grand_canyon]

CNB is down to 2.8%. Guess if you want over 3%, you have to go Redneck.

CNB is down to 2.3%.

[jeffmem]

Redneck Bank is this a real bank? No BS? From their website I feel it's a joke, is this real?

[poundwise]

"Redneck Bank® is the Internet Banking Division of Bank of the Wichitas®, a well-respected "country" bank established in 1913, and is insured by the FDIC, like all legitimate banks!"

[jeffmem]

Would be curious to hear from anyone currently using the redneck bank online banking. What do you think of it?

[kork13]

Would be curious to hear from anyone currently using the redneck bank online banking. What do you think of it?

I'll admit that my curiosity (okay fine--also frustration over ING's most recent drop to 1.5%) finally got the best of me, and over the weekend I applied for their MMA. I figure, "What the heck, why not? A bank's a bank, and if they'll pay me double for my money, I'll try it."

While more thorough than I'm used to (don't remember having to give employment and driver's license info elsewhere... but I could be mistaken), their application was simple enough, and today they processed the test deposits in my funding account for my initial deposit to them. The only hang-up I'm having is that I had to mail a copy of my power bill to verify my address, but I think that's only because I moved recently, and I've got 3 different addresses on file (state residency, current, and former).

Once everything goes through and I've been able to work with them a bit, I'll post again with my impressions...

[cooliemae]

GMAC is down to 2.5%

[poundwise]

Updates:

CNB down from 3.00 to 2.30
GMAC Online Savings down from 2.65 to 2.50
Union FSB down from 2.50 to 2.25
Venture Bank down from 2.48 to 2.00
Nationwide down from 2.39 to 2.29
Apple GYD down from 2.25 to 2.15
Dollar Savings Direct down from 2.25 to 2.05
Century Bank Online Savings down from 2.19 to 1.99
Ultima Bank down from 2.15 to 2.05
GMAC MMA down from 2.15 to 2.00
Century HIMM down from 2.09 to 1.89
Emigrant Direct down from 2.00 to 1.65
Citibank down from 2.00 to 1.75
E*TRADE down from 1.95 to 1.70
ING Direct down from 1.65 to 1.50

[poundwise]

I frequently receive private messages and e-mail asking my opinion on these accounts. To be sure, having tracked them regularly for the past couple of years does mean that I have a good view overall, though I typically avoid making assessments about most individual accounts. For one, many new accounts have been added and have less of a track record. For another, many established accounts change frequently. Lastly, I don't like to advise strongly because of other factors that may make an account more or less beneficial to an individual; such as if you want a debit card with the account or want to link it with an online checking account from the same bank, etc.

Having said that, there are a few points I will share:

1) Rate chasing. Opening account after account to keep trying to have the highest rate account is not wise. The rates change frequently and what were the top accounts last year are not near the top now. However, what many people call rate chasing is not. If your account is consistently in the lower range of rates, and you move it to one that is consistently in the higher range of rates, that is not rate chasing, that is just changing banks to obtain a batter rate.

2) Consistency. Some accounts fluctuate in wild ups and downs while others change a little bit at a time. This is not always due to the same reason, however. Some accounts will change their rate every couple of weeks, adjusting it a little bit at a time until finally, after 6 weeks, they have moved 0.55% APY. Others will stay the same for 6 weeks then move 0.55% APY in one day. The latter has the appearance of moving more radically but, in reality, the net effect is virtually the same. Other accounts, however, do seem to post high rates to draw new accounts and then nosedive down.

3) Choosing an online savings. As I mentioned, there can be other factors that may help you draw down the list to a few to choose from. When looking at rates, however, I would say that it is best to take the top half of accounts, then look for consistency of rate over the past several months. This can be difficult to examine but can be done, for instance, by reading backwards through this thread. Or, as many do, ask me. For instance, I can tell you that GMAC, Nationwide, Apple Bank, Flagstar, and OneUnited are a handful of the most consistent banks in the top half. That is, they may not have the best rate, but the rate you get when you sign on seems to be more likely to be the type of rate you will continue to get. On the other side of the coin, Dollar Savings Direct is a solid example of a rate on a new type of account that popped and nosedived. AmTrust Bank, even more so, was at the top of list before it fell so fast and so far that it is no longer on the list. Banks like Emigrant, ING, Citibank, and E*TRADE move their rate a lot but usually within a certain small range at a time; unfortunately, they are also consistent bottom-dwellers in terms of account rates. (This paragraph is not intended as a complete discussion of best and worst accounts in terms of rates or consistency.)

4) Other factors. Some banks do a hard pull while others do not. Some use other credit services like ChexSystems while others do not. Some banks take longer to set up accounts than others. Some have faster transfers while others are quite slow. I make no attempt to detail those measures on the list here, but they can be real factors that some will want to consider. Asking on the thread can often yield some help and, of course, Google is your friend when looking into some of these points.

5) Loyalty. Be careful when assessing other people's opinions. A great many responses go something like this, "Well, I'm happy with my bank" or "I've been with ____ for years and never had a problem." Such info can be helpful but needs to be tempered with the understanding that most people like to believe they have made a smart choice and are doing the best thing. Or, they are content and don't see any need for improvement, whereas you may want to seek out something better.

After all that is said, what is my current opinion?

Well, I believe that it is clear that ING Direct and Emigrant Direct (including their Dollar Savings Direct offering) have no intention of offering a top rate. They are consistently on the bottom and often change their rate downward first and upward last. I don't have anything against either one of them but facts are facts. If you are looking to open a new savings, I would steer clear of these two popular, and once leaders of, online savings options.

I personally don't care for gimmicks, so I'm not a fan of Redneck Bank, but if you don't care, their rate is presently top-notch and they have been on the list long enough, I believe, to demonstrate that they are staying in the top level, at least for the short-term. My dislike of the gimmicky is also why SmartyPig doesn't appear on the list, though I suppose it could, as it offers a qualifying rate, yet it is not purely a savings account.

I would not be interested in any account requiring me to maintain a high balance or to have a linked checking or qualifying 'relationship' to earn a certain rate or to avoid fees. There are too many options to have to deal with this.

So what do I recommend now?

If you want to join a credit union, check out Alliant. Besides the high, consistent rate on savings, there are other potential benefits to credit union membership.

If you just want a straight online savings, I suggest GMAC Bank; a consistently top-level rate offering and now no minimum balance requirements.

If you'd like the ability to access your funds via a debit card, have a look at Flagstar.

This does not mean I don't recommend other banks or think anyone should move their accounts from SavingsSquare, FNBO, etc.; not at all. But if someone asks me, as I mentioned folks often do, those would be my recommendations right now. Most of the options presently listed at 2.15% APY or above are good choices. And, as I said, I don't rate chase, but if your account is presently yielding under 1.75% APY, then I'd probably have to give consideration to looking for another option depending on your balance.

As for those private messages and e-mails, keep them coming. I try to answer each one directly and in a timely fashion. Of course, you are free to post your questions in the thread itself, where you get answers from others as well.

[weissheit]

For what its worth, Capital One is now offering a 50 USD bonus for there online acct at 2% APY w/ a 10k minimum.

Presidential FSB, which was dropped from the list due to its 5k opening requirement (but not maintenance of 5k there after) has been at 2.25 APY for awhile and was 2.6% APY for the longest time. Basically, instead of a death of a thousand cuts, Presidential has made fewer but prudent pro-active cuts. I've washed my hands of chasing rate and am just going to stick with them.

[Pitman]

For what its worth, Capital One is now offering a 50 USD bonus for there online acct at 2% APY w/ a 10k minimum.

I just checked their website, there was no mentioning of the $50 bonus. I may have overlooked it.

[weissheit]

I just checked their website, there was no mentioning of the $50 bonus. I may have overlooked it.

The code is OFFER50 Here is the link:

Capital One Direct Banking: Online Savings Accounts, Money Market Accounts and Certificates of Deposit

[weissheit]

"Redneck Bank® is the Internet Banking Division of Bank of the Wichitas®, a well-respected "country" bank established in 1913, and is insured by the FDIC, like all legitimate banks!"

If bank ratings are a concern FYI Bank of the Wichitas has a 4 star bankrate safe & soundness rating, which equates into the bank being characterized as "Sound" a very good rating.