What’s the best online savings account according to Kiplinger’s? Plus Etrade Bank, FNBO Direct and other high yield savings account interest rate updates.
Top Online Banks Offering High Yield Returns
With regards to the offerings of other online banks (those online savings accounts we keep track of), this new interest rate environment has pretty much affected everyone in the same way, across the board. For instance, ETrade Bank Savings Account now returns 0.50%. All online savings account rates have already fallen below the 3.00% level — including FNBO Direct. Here’s a quick rundown of recent yields for these bank accounts:
- EverBank Yield Pledge Money Market Account is at 2.51% APY for the first 3 months after account opening; beyond 3 months, you’ll earn 1.77% (interest rate is tiered).
- Ally Bank High Yield Savings Account is at 1.64% APY (Updated 11/19/09).
- Dollar Savings Direct Savings Account is at 1.60% APY.
- WTDirect Savings Account has recently lowered its rate to 1.51%, and has expired its winter cash bonus promotion.
- ETrade Bank Complete Savings Account has readjusted its rates to 0.50% APY (many times the national average for bank yields).
- HSBC Direct Online Savings Account has a 1.35% APY.
- ING Direct Electric Orange Account is now yielding .25% to 1.55% APY. This is a nice account that you can use for your combined savings, checking and bill pay needs.
- Bank of Internet High Yield Savings is at 1.65% APY.
- FNBO Direct Online Savings Account is now at 1.50% APY.
FNBO Direct: Best Online Savings Account for 2008
With online savings account rates dropping like stones for some time now (along with all other rates) — in response to Fed rate cuts and the government’s strong resolve to turn this economy around — it’s getting harder to find sweet returns for your short term funds. Out of all the online bank accounts we’ve been tracking, a few seem to be standing out for specific reasons. One of those online banks which offers great savings products is FNBO Direct. So let’s take a closer look at this top online bank, shall we?
FNBO Direct was recently honored for being chosen as the best online savings account at the close of last year (2008), by Kiplinger’s. Why so? Because it’s easy to establish an account with them — you’ll only need $1 to open an account, they’ve got no minimum balance requirements, no extra fees that give some banks a lousy name, account linking features (for good accessibility), and bill pay. So they rank well for convenience, access and cost.
I’m also suspecting that one significant reason why they’ve received such honors is because they’re known to traditionally offer a pretty high yield, relative to other online savings accounts — in fact, they topped the rate charts (at least here on our site) for a bit of time. Now that the awards have been given out, I guess these banks have held on to their rates long enough and can afford to start chopping them (just being facetious).
Still this bank must be doing something right, since they’re often cited in financial publications and online articles. Their roster of honors include:
- Kiplinger’s Personal Finance 2008 Best List (Dec. 2008), for Best Online Savings Account
- Bankrate’s Safe and Sound Ratings gave them 4 stars out of 5, an above average “Sound” rating. This rating allows you to compare the relative financial strength of financial institutions. So if you’re curious about your bank’s stability, this is one measure that can give you some transparency. Suffice it to say, the FNBO Direct Online Savings Account bests a lot of other popular savings accounts (even those with higher yields) in this capacity.
Interestingly, FNBO (First National Bank of Omaha) also scored pretty highly as a great place of work, having been mentioned in a couple of publications that came out with company surveys (Computerworld Annual Survey 2007 and Working Mother’s 100 Best Companies for 2008).
Tough for us savers: these are what serve as high yield savings accounts at the moment, but rest assured, these are some of the best high interest savings accounts that are currently available. And there could just as easily be a rate trend reversal in the near future!
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- Earn top returns: FNBO Direct [1.90%], HSBC Direct [1.65%], WTDirect [1.76%], E*Trade Bank [0.95%], ING Direct [.25% to 1.65%]
- Cash bonus: Discover More [$50], American Express [$25], Lending Club [$25]
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Well, having had a bad experience with ETrade, I would have to say that of the lot, both FNBO Direct as well as WTDirect, seem to be the best choice. HSBC has led down many consumers in the recent past, it is almost as though they are intent on making a career out of it. From hearsay as well as personal exp, FNBO has never let me down.
I’m happy with GMAC Bank’s Online Savings account that currently yields 3.00% APY, looks like many blogs forget about this option. GMAC is well -known for its pretty fast ACH transfers. Also GMAC offers MMA account with a bit lower rate, but with debit card and check-writing. If I need to access my money urgently I just make a one-click transfer from savings to MMA and voila!
Foglifter,
Thanks for the sharing this tip. I’ll have to check out GMAC. I’d like to see how they stand in terms of stability (yeah, we want to provide transparency) and other features. Thanks again!
DollarSavingsDirect has been the leader of the pack for rate chasers recently. They just recently dropped their rate, which is still pretty high compared to today’s standards.
Why nobody mentions DollarSavingsDirect? It was 4% APY until last week. It’s 3.5% APY now.
People are once again turning to banks and cds as they have become gun shy about the market
Nice! I am actually working on a post similar to this (it’ll be up tomorrow morning) after watching my ING account drop – it’ll be interesting to watch the rates as the economy continues to slide. I like ING, but if these FNBO hangs in there I might just have to switch.
I had an ETrade Bank account for a couple of years and was quite happy with them. It was back when the interest rate was about 7%!!! I sure wish we could have those rates back
Actually, with all the talk on GMAC Bank, it turns out that they’ve changed their name to Ally Bank. And in fact, Ally Bank’s savings account has a better rate than Dollar Savings Direct. I’ve included these accounts in my newly updated list here to reflect that. I’ve also finally written up my review of Ally Bank here. Thanks for the input!
I currently have a HSBC account. I was wondering if ETrade comes with an atm card. What are the current charges for atm transactions?