As of July 1, credit card issuers were required to conform with new rules approved by the Federal Reserve Board to protect consumers from what many have seen as unfair (or at least unclear) practices by the card issuers.

The new statement does a lot of things right–it’s now abundantly clear, for example, just how long it’ll take you to pay off even a small balance if you just send in the minimum payment required (and how much interest you’ll rack up in the process). Closing one of the classic traps of card usage that have ensnared many, the new statements must tell cardholders up-front just how much their credit card rates will jump and how much the late fee will be if you’re late with your payment. And interest fees and fee charges of all types are now labeled clearly–you’ll be able to see at a glance whether that zero percent balance transfer transaction was correctly implemented.

FiveCentNickel.com has a nifty infographic with mouseover highlights of the new changes:

Source URL: New Credit Card Statement Format

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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If you’re searching for a list of the best online banks to deposit your savings in, then you’ve arrived at the right place. One of the most common, if not the most often asked question I get as a personal finance blogger, is which bank I would recommend to those looking to get the best interest rate of return for their money.

While some of us plow our personal savings into home mortgage payments or invest them into stocks, most of us invariably keep a certain stash into more accessible bank accounts for emergency fund purposes. Others like myself use high interest savings accounts to save up money for specific targeted purposes – in my case, I’m saving up for my future down payment for a house. So, if you’re keeping money in a bank account anyway, why not try to get the highest interest rate possible? To address this need – below, I’ve compiled a list of what I believe to be the best online banks available today – banks that offer the best deals for high interest savings and high yield savings accounts. Many of the recommended firms are also very competitive in the area of certificate of deposits (CD’s) and checking account rates as well.

Unfortunately, with interest rates at historical lows across the board given the current ongoing economic climate, the term “high yield savings account” is more of a comparative delineation than a descriptively absolute one. Just a few years ago during the glory days, one could easily rake in a hefty 5% to 6% APY rate with popular online savings accounts and high yield CD rates. But those days are long gone and today, the top online banks only offer anywhere from 2% to 3% tops. But despite the overall lower rates at the present time, the yields found at these Internet based banks still greatly exceed the nearly zero percent interest rates found at most local brick and mortar banking institutions. Think the best bank accounts are found at places like Citibank, Bank of America, Chase Bank, or  Wells Fargo? Think again. The APY rates offered by Internet based online banks almost always greatly exceed the paltry interest rate offerings of the brand name banks, while offering the same FDIC insurance limit guarantees and transactional security protections that are equal to, if not better than that offered by the big boys.

Benefits Of Online Savings Accounts: Impressive Rates With FDIC Insurance

Because of much lower overhead costs, online banks generally pay much better rates on savings accounts, checking accounts, and CD’s. Online bank accounts are also much less likely to have minimum balance requirements than ordinary retail banks. They also offer many conveniences and advantages over accounts at traditional neighborhood banks and credit unions. So long as the customer has access to an Internet connection, online bank account transactions can be performed, balances can be checked, and funds can be transferred in and out anywhere and anytime. The ability to keep 24 hour tabs on your account funds, pull up account history data on demand, and eliminate the need to conduct transactions in cumbersome paper form are some of the clear advantages of web based banking. To compete with the traditional big name banks, a large majority of online banks have eliminated their monthly fees and account minimums, and now offer a wealth of free financial services that include free bill pay, free budgeting tools, free fund transfers, and free out of network ATM usage.

Below is comprehensive review of what I’ve found to be the top online banks for high interest checking and high yield savings accounts. Each offer, except for the first one – provides for full FDIC insurance limit protection for account holders – guaranteeing the safety and security of account funds from unexpected loss.

List Of The Best Online Bank Accounts For Savings, Checking, and CD Rates

1) Lending Club - While not an online bank in the traditional sense, Lending Club offers a comparable peer to peer lending (P2P) program that matches prospective consumer lenders with prospective borrowers, all with a variety of disclosure safeguards to ensure a generally low default rate. While the program has gone mainstream and garnered quite a bit of positive feedback from the press and new members, it’s been able to stick to the fundamental basics and continue to offer its lending account holders the ability to reap a consistent 9.60% average interest rate of return. For those seeking an impressive high yield savings account alternative to online banks, Lending Club is worth a look. If you wish to know more, please take a look at my review of Lending Club where I explore in depth how the online program works and evaluate it to see if it truly is a legitimate non-scam way to earn a higher APY rate on your savings.

2) Everbank – I highly recommend Everbank if you’re looking for a top tier online bank that offers great rates for savings accounts and checking. EverBank’s product offerings are diverse and includes features like money market accounts, CD’s, credit cards, and even currency investments options. You may not be as familiar with Ever Bank as you might be with a few of the other banking names on this short list, but they’ve been around for some time. Since the beginning, EverBank has always earned awards and praise for its banking features and online services. Money Magazine rates EverBank as one of its “Best Of Breed Online Banks”, Kiplinger’s Personal Finance ranks the firm’s Everbank FreeNet checking account very highly, and even Forbes Magazine has ranked the bank among the “Best of the Web” for numerous years.

Everbank’s most popular account feature – the highly regarded Yield Pledge Money Market Account – requires a minimum initial deposit of $1,500 and starts out at an extremely high introductory rate that overwhelming tops most high yield savings rates in the market. After a 3 month introductory period, the rate automatically adjusts to a slightly lower rate, but one that is still competitively higher than that offered by other online banks. Thereafter, there is no monthly fee so long as a balance of $5,000 is maintained. For more details and commentary, see my Everbank review.

3) Ally Bank – Formerly known as GMAC Bank, the new Ally Bank markets itself as a new age approach to online banking – one that offers transparency and a reformed way of doing business with its flexible array of unlimited sub accounts, daily interest compounding, no minimum deposits, no monthly fees, no minimum balances, and no sneaky disclaimers. I personally have deposited quite a bit of cash with Ally Bank and have found their online banking services to be very straight forward and reliably clean cut. Ally’s banking rates are very high and there are no confusing tiered interest rates to contend with. What you see is basically what you get – with the usual assortment of high yield savings accounts, money markets, and high yield CD’s. However, what’s uniquely appealing about Ally Bank is its offering of no-penalty CD deposits that allow account holders to avoid paying any fees to transfer money out prior to the CD maturity date. For more info about Ally’s banking features, please read my Ally Bank review.

4) E-trade Bank – Known more for its online brokerage arm, ETrade is what I call a one stop shopping all-in-one banking/discount brokerage firm. They offer pretty much the full package in the way of banking and brokerage services – including high interest savings accounts, checking, credit cards, mortgage services, CD’s, Roth IRAs, and investment gudiance. Best of all, Etrade does not impose any minimum balance requirements to open a new account. While E trade’s Complete Savings Account is not currently the best online bank in terms of offering the highest interest rate for deposits, it makes up for this mild shortfall by offering an extremely broad array of services from one source. Those that want the ability to instantly transfer money back and forth freely between their banking and broker accounts will find Etrade to be extremely appealing as the company seamlessly integrates the two services into one. If you want to know more, see my Etrade bank review and my Etrade broker review for my opinionated take.

5) FNBO Direct Bank – FNBO Direct is the online banking division of the First National Bank of Omaha – a bank with a great reputation that has largely escaped the credit crisis that has plagued most of the other banks in some shape or another. FNBO Direct offers competitive rates for its account holders and imposes no fees or minimum balance requirements. Fund transfers are quick and links to other bank accounts are easy to set up via a series of test trial deposits. ATM card options are available for those that wish to access their account funds from traditional live automated tellers. The bank’s high yield savings account was one the first to start offering super high rates during the heyday of Internet based banks, and continues to be one of the most popular choices for its consistently high interest rate offerings. As with all of the recommended banks on this list, FNBO offers full FDIC insurance limit coverage for account deposits. Please check out my FNBO Direct review if you wish to learn more about the online bank.

6) HSBC Advance – Named as the best cyber bank and having the best online savings account by Kiplinger’s Personal Finance in years past, HSBC Advance is a top tier bank in terms of reliability and name recognition. While its interest rate yields for its no-minimum-balance high interest savings accounts have fluctuated along with all of the other online banking names out there, HSBC’s rates remain very competitive. Along with its bank account offerings, the firm also offers a convenient array of banking features such as ATM debit cards and free online bill payments. Highly regarded for its commendable customer service reputation, HSBC also provides its banking customers amazing access to its growing network of convenient bank branches and ATM’s located all over the world (with new locations being constantly added).

7) Capital One Direct Bank – While probably much more famous for its lineup of “What’s In Your Wallet” Capital One credit cards and its popular build-your-own credit card Card Lab feature, Capital One provides its savings account customers with pretty competitive rates through its online direct banking program. With Capital One Direct Banking, members get access to InterestPlus Savings, high yield money markets, certificate of deposits, and even business money market accounts. While there are no mandatory account minimum requirements and no sneaky service fees, a balance of $10,000 or more is required to get the highest APY rate that Capital One has to offer. Online bank transfers are always free, and linking your Capital One savings account to existing external bank accounts for quick and easy transfers is very easy to do.

8) ING Direct Bank – As the grand daddy of them all, ING Direct has been around the longest since its emergence during the early dot com era of 2000. Since then, ING Direct has solidified itself as one of the best online banks with some measure of streamlined improvements to its online interface over the years. While the firm’s bank rates have fluttered around of late, its yields are still competitive and exceed the rates offered by most neighborhood banks. Overall, ING Direct banking products are easy to open, easy to use, and ideally suited for those new to online banking. One thing that most reviewers of financial products generally agree on – is how simple and straight forward ING products are to manage. ING offers a wide array of banking and investment products with its seamless union of ING Direct savings, checking, and investing features via ING ShareBuilder. The firm’s very popular Orange Savings Account offers a competitive interest rate with no monthly fees and no account balance minimums. Its Electric Orange Checking account also enjoys similar praise and positive reviews from the online critics. Another greatly appreciated feature of the bank is also the ability to utilize ING Direct referrals to refer friends and family members, allowing them to enjoy special first time member bonuses as new account sign ups.

9) Dollar Savings Direct – As a newly acquired online bank by much larger parent Emigrant Bank, Dollar Savings Direct continues the tradition of offering great high yield savings rates for its flagship product. New savings accounts are easy to open hassle free with no account maintenance requirements, no maintenance fees, and no hidden charges. New accounts do require an initial minimum deposit of $1,000, however thereafter, there is no stated obligation that account holders must actually maintain that balance. If you are an aggressive bank rate chaser like myself and desire the safety and security of full FDIC insurance coverage for your liquid cash assets with the added benefit of high rates, you should definitely click through and check out what Dollar Savings Direct Bank has to offer. For more details, take a look at my Dollar Savings Direct review.

10) WT Direct Bank – Chances are, you’ve probably never heard of WTDirect bank before as they are a relative unknown compared to some of the bigger names above. However, as the online arm of Wilmington Trust FSB, the parent bank has been around for quite some time since the early 1990’s.  Currently, WT Direct offers a pretty attractive high yield online savings account that features a pretty top tier interest rate. Best of all, there are no minimum deposit requirements, no account maintenance fees, no limits on the number of linkages to external accounts, and all deposits earn interest regardless of balance amounts. One caveat however, is that the highest tiered interest rate for the savings accounts require balances of at least $10,000. If all other savings account alternatives above don’t suit your fancy, savings account holders with at least $10,000 to store away will find WT Direct to be a solid high yield savings option.

Searching For Other Alternative Sources Of High Interest Rates

Generally if you want the perfect mix of cash liquidity, account accessibility, and competitively high interest rate yields for your bank account funds – you ought to stock with high yield savings accounts. But if you’re willing to exchange a little bit of liquidity and lock up your monetary funds for anywhere between periods as short as a month to periods of 5 years or longer, you might be able to get a better interest rate yield via certificates of deposit. Check out my list of the best CD rates for what some of the top online banks are offering in that department.

Speaking of rates, those of you who are disappointed with the pitifully low interest rates on checking account funds might be surprised to know that there are high yield reward checking accounts out there that offer extremely high interest rates on checking balances. The rates offered are frequently the same or even better than the best online savings accounts and top level CD rates. The catch with these high interest reward checking accounts is that they often have stringent maximum balance limits and frequently require account holders to execute a certain number of debit card transactions a month to qualify. But if you’re up to the task, they may be able to provide you an impressively excellent rate of return for your money.

Source URL: Best Online Bank: Savings and Checking Accounts

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Below, I’ve included a list of the best CD (certificate of deposit) rates presently found online – periodically updated by yours truly whenever I am alerted to major changes in the rates. All of the bank CD rates listed below are nationally available and not restricted to residents of any particular state(s). While national annual percentage yield (APY) rates for banks have fluctuated and dropped across the board due to the economic troubles we’ve been experiencing, the interest rates offered by CD’s still remain consistently higher than that offered by other forms of FDIC insured deposits such as savings accounts and money markets.

For many years now, I’ve kept my short term cash and emergency fund money saved in a variety of online savings accounts and online CD’s – jumping from one bank to another in pursuit of the highest interest rate yields. To maximize my money to its highest passive income potential, I never keep my short term cash idle for too long. At the very least I always ensure that they are properly invested in the best interest bearing accounts offering me the most competitive yields based on what I’m willing to give up in terms of account accessibility and liquidity. While I keep my most short term emergency funds stored in ultra accessible savings accounts, I store the bulk of my regular cash savings into certificate of deposits, neatly arranged into CD ladder setups for maximization of return and liquidity.

Contrary to some views, CDs are not all that difficult to use effectively. They are nothing more than time deposit products offered by banks that offer fixed rates for the life of the CD term. The biggest difference they have with savings accounts is that the funds deposited into CD’s are held for pre-set terms that range in duration from as short as 1 month to 10 years or longer. In exchange for the customer’s agreement not to withdraw the funds for the predetermined period of time (and consent to face an early withdrawal penalty fee if he or she does), the servicing bank pays the CD account holder a higher rate of interest on the deposited funds than it would otherwise pay for a readily accessible savings account. It’s a trade-off consideration between the customer’s preference for instant account accessibility versus interest rate of return. Typically, the longer the CD term the bank customer agrees to, the higher the CD rate offered in return. Obviously, one should not put funds into a CD that one would expect to absolutely need within a very short period of time.

Online CD Deposits Offer Much Better CD Rates Than Traditional Banks

While anyone can easily visit their local bank or neighborhood credit union and open a new certificate of deposit account, you’ll find that the rates these brick and mortar sources provide are rather limited compared to the higher rates that online banks and Internet based lending institutions are able to offer. The top online banks can afford to provide their customers substantially higher rates on their CD deposits and investments due to the much lower overhead costs associated with running web-based services. Because they don’t have to maintain as extensive of a network of branch offices and don’t need to spend as much money hiring a large staff of employees and bank tellers to run their operations, online banks are better situated than traditional banks to pass on that extra savings to their depositors. As such, the high yield savings accounts, money market accounts, and CD rates you’ll find with online only banks such as EverBank, Ally Bank, and HSBC Direct will almost always beat out the interest rate offerings of more well known financial institutions like Citibank, Bank of America, JP Morgan Chase Bank, and Wells Fargo.

Even In The Event Of An Emergency, Online Bank CD Deposits Are Fully Protected

While these online banks perhaps don’t have the same brand name recognition and years of extensive and proven reliability as many one of the too-big-to-fail U.S. banking giants, all of the various deposit accounts they offer all enjoy the same equal protections and solid depositor guarantees afforded to the bigger name banks and credit unions. In the United States, the vast majority of bank accounts and CD deposits are fully protected from loss in the event of any unforeseen system collapse, theft, or potential run on the bank – backed by the full faith and credit of the U.S. government up to the current maximum FDIC coverage limit of $250,000 per depositor, per bank. Unless the federal government suddenly collapsed, ceased to exist, thereby dissolving the entire nation into Armageddon and social anarchy – your money, whether deposited in a savings account or stored in a certificate of deposit account – is 100% safe.

List Of The Highest Yield Bank CD Rates For 12 Month Deposits (1 Year)

For consistency and comparison purposes, I have chosen to only list the best CD rates for 12 month certificate of deposits as opposed to listing every conceivable CD duration out there.

Compare CD Alternatives For Offers That Exceed Even High Interest CD Rates

Of course, you should never commit to any agreement until you’ve conducted some research, properly compared offers, and first shopped around for the best CD rates and deals. You should never solely take my word for it without performing your own due diligence. I highly encourage you to check out the various rate disclosures to confirm for yourself.

Alternatively, if you’re looking for a super competitive rate of return, you may wish to consider options beyond just high yield CD’s. Those willing to swap a little bit of the iron clad protections afforded to CD’s by FDIC insurance may want to check out P2P social lending networks where yields for investors are currently averaging over 9.60% APY for those willing to lend money out to prospective good credit score borrowers. The rates offered by sites such as Lending Club and Prosper.com tout APY offers that greatly exceed anything offered by bank CD’s. The impressive rates of return as reflected in this review of Lending Club are at the very least worth some consideration by prospective CD rate chasers.

Source URL: Best CD (Certificate Of Deposit) Rates

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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After months of bank failures and gloomy economic news, we finally have some good tidings from our federal government. No, it’s not another round of stimulus checks for those of you who have been hoping and waiting with bated breath, but rather, it pertains to the FDIC insurance that guarantees the safety and security of bank deposits.

The current increased FDIC insurance limits of $250,000 were scheduled to be rolled back to the previous $100,000 limits on the last day of 2009. However just recently, Congress voted to extend the deadline for four more years – through December 31, 2013. Those of us who have significant amounts of money in the bank or sizable funds invested into long term certificates of deposit (CD rates) undoubtedly have been nervously eyeing the impending December 31 expiration date of the $250,000 threshold. Thus this news ought to come as a tremendous welcomed relief. Those of us who have been considering renewing our certificates of deposit can now consider maturities with a longer time horizon without fear of falling outside of federally protected limits.

Avoid Banks That Are Not FDIC Insured, Or Credit Unions That Are Not NCUA Protected

As many of you may know, if you have money in a bank account, your bank deposits are generally insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum current limit of $250,000. Similarly, if you have money saved in a credit union account, your deposits are insured by the National Credit Union Administration (NCUA) for the same amount as well. As federal government run entities, the two organizations jointly share in the responsibility of  insuring and regulating the stability & financial health of our nation’s banks and credit unions. All legitimate banks and credit unions operating in the United States are duly members of the relevant regulatory agency. If you are not banking at an FDIC insured institution, you’re taking a huge risk. Banks that are not FDIC insured are either international banks or scams (yes, bank Ponzi schemes do exist). While most reputable international banks offer some protection through their own governmental authorities, you will want to do everything you can to steer clear of the uninsured but high yield dealers calling themselves banks.

FDIC and NCUA deposit insurance offer the maximum peace of mind assurances available as they are backed by the full faith and credit of the United States government. In the event of a bank or credit union failure, insolvency, or bankruptcy, the FDIC and NCUA have an orderly and systematic system in place to ensure a seamless and disruption free resolution. When banks fail, the FDIC takes over. They may sell the failed bank to another more stable bank (purchase and assumption method), or they may liquidate its assets and issue full payouts to customers (pay off method), making up any shortfall of funds from its own coffers. During any bank failure proceedings managed by the FDIC and NCUA, all interest income accrued up to the date of bank failure are guaranteed and paid out as well. Contrary to popular opinion, the FDIC and NCUA resolution processes are almost always very orderly and expedient, with little lag time and disruptions to account access during the resolution transition phase. For most customers in such an occurrence, a bank failure is a non-event as they are almost always permitted to continue using their customary bank services including checks, debit cards, and electronic transfers as before. At some point however, customers may be issued new cards, checks, or online banking information.

Federal Deposit Insurance Corporation (FDIC)

Created by the Glass-Steagall Act of 1933 in response to the massive number of bank failures during the Great Depression era, the Federal Deposit Insurance Corporation (FDIC) now services as a safety net for bank deposits in the event of a catastrophic insolvency emergency or rare run on the bank. Currently, FDIC insurance provides up to $250,000 worth of protection per depositor, per insured bank for the following accounts:

• Checking account (negotiable order of withdrawals)
• Savings and money market accounts
• Certificates of deposit and other time deposit accounts
• Cashier’s checks and other checks drawn on the member bank’s accounts
• Certain investment retirement accounts (IRA’s) in deposit based accounts

Not everything is covered. As a general matter, financial investments and bank conveniences such as – stocks, bonds, money market funds, annuities, insurance policies, and even bank safe deposit boxes are not covered by the FDIC.

Because the general coverage limit that FDIC insurance provides is $250,000 per depositor per bank, there is no sense in opening multiple accounts of the same type at any one bank to circumvent this restriction. The only way to exceed this mark yet remain fully protected under permissible limits is to either spread your money among different banks, or if you wish to stick with a single bank – open multiple accounts with different deposit categories of legal ownership. The FDIC recognizes eight different ownership categories – single accounts, certain retirement accounts, joint accounts, revocable trust accounts, irrevocable trust accounts, employee benefit plan accounts, corporation/partnership/unincorporated association accounts, and government accounts. As each of these different account ownership categories qualify for its own $250,000 insurance limit,  it is possible to have total deposits of more than $250,000 at any one insured bank and still be fully insured. To demonstrate, here’s an example and run through of how a married couple could hypothetically insure up to $2 million at any one bank:

• Husband and wife each deposits $250,000 in separate individual accounts
• Together, they have $500,000 in a shared joint account
• Individually, each has $250,000 in separate IRA deposit accounts
• Each also sets up a $250,000 revocable trust account, payable on death, naming the other one as beneficiary

Avoid banking with institutions or organizations that are not covered by federal government insurance. Particularly if you are a high yield savings account or bank rate chaser like myself, more likely than not you’ll come into contact with online banking names like Dollar Savings Direct, EverBank, Ally Bank, or even E-trade – bank names that are either unfamiliar to you or names whose reputations or stability concerns you haven’t fully vetted yet. While most reputable banks will clearly display their FDIC insured member logos, it’s always important to confirm this fact for yourself. Verifying your bank’s FDIC insurance coverage is easy – simply call the FDIC’s telephone number at: 1-877-275-3342, or preferably, visit the online FDIC Bank Find page. To find an institution by FDIC certificate number (every FDIC member institution carries one) or to search via geographical or statistical criteria, simply click on “More Search Options” via FDIC Bank Find for more choices. As the Bank Find website notes, the service can also help you answer pressing questions such as – Is my bank insured? Where are my bank’s branches located? Where is my bank’s home (main) office located? What is my bank’s web site address? What happened to my bank (historical list of events)? Does my bank have a new name? And Is my bank still open?

National Credit Union Administration (NCUA)

All legitimate credit unions in the United States offer deposit insurance protection for their account holders via the NCUA. The National Credit Union Administration is the independent federal agency that supervises and regulates the operations & stability of all federal not-for-profit credit unions.

Like the FDIC, the NCUA’s insurance limits are guaranteed by a federal fund that’s backed by the full faith and credit of the United States government, and as such, are 100% safe from catastrophic loss or insolvency. Now that the $250,000 coverage limits provided by the National Credit Union Share Insurance Fund have been extended through December 31, 2013, credit union customers should be able to rest easier. Hopefully the higher protection limits will be extended into indefinite perpetuity or made legally permanent. Beats me why the FDIC and NCUA haven’t already done so.

If you have an account at a credit union, chances are your funds are protected by NCUA member insurance, with account protection rules and different account ownership categories that are similarly set up to run as that offered by FDIC insurance. However, to be sure, it’s always important to confirm that your credit union is a legitimate entity and fully insured before doing business with them. If you are unable to find a NCUA member placard logo displayed anywhere on the credit union’s website or store front, I’d recommend that you confirm its membership by calling the NCUA’s telephone number at 1-800-755-1030, or by preferably visiting the NCUA’s Is My Credit Union Federally Insured lookup page.

Source URL: Current FDIC and NCUA Insurance Limits For Banks and Credit Unions

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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After a rather bumpy ride over the last few years, the financial institution formerly known as GMAC Bank is now Ally Bank. In mid-May 2009, the former financial lending and banking arm of General Motors took the first of what it hopes to be a series of reinvigorating steps towards distancing itself from the much criticized and tainted image of the now bankrupt auto maker.

Since then, many of you may haven noticed their recent aggressive purple-themed advertising blitz on TV spots and online ads. With the launch of Ally Bank, the company is undertaking a massive promotional effort to differentiate itself from the collectively damaged reputations of other struggling online banks in the hopes of  positioning itself as a commercial advocate of honesty, transparency, and accountability. Though the former bank has been struggling mightily in the midst of the worst economic recession and subprime mortgage crisis in decades, now that it’s flush with bailout funds courtesy of the federal government’s Troubled Asset Relief Program (TARP), the new Ally Bank is now sufficiently stabilized to concentrate on growing its depositor base and rebuilding its image.

Currently, Ally Bank’s interest rate offers are extraordinarily competitive and have been consistently dominating the high end of the bank rate spectrum. If you are willing to accept the view and belief (as you perhaps ought to) that the government’s FDIC insurance protections are more than adequate to guarantee the safety and security of your banking assets in the case of any unforeseen scenario, Ally Bank’s high interest account rates alone ought to be worth some measure of consideration. Whether Ally Bank’s quest to transform itself will be successful remains to be seen. However, in terms of the top rates alone, Ally ranks among the very best online banks, as you won’t find too many non-teaser rate offers that can match the consistency and aggressiveness of Ally Bank’s high interest deals. In terms of product lineup diversity, the bank also touts a few special banking products not readily found elsewhere – most notably, the Ally Bank No Penalty CD. Other offers include:

1. Online Savings Account – The high yield online savings account from Ally Bank earns a very high interest rate – much higher than other banks.
2. Money Market Account – With no account minimums and no monthly fees, the Ally Bank money market account offers versatile check writing and free ATM fee reimbursement privileges.
3. Classic CD – The classic fixed interest certificate of deposit from Ally Bank offers a variety of high yielding CD rates for different term limits, all with no minimum deposit requirements. Interest is compounded daily for maximum earnings.
4. No Penalty CD -  The highly coveted No Penalty CD from Ally Bank allows you to withdraw your money and put it anywhere, without the hassles or shortfalls of an early withdrawal penalty. This special CD offer has no fees of any kind and offers high fixed interest rates with no minimum deposit stipulations.

Ally Bank’s High Interest Rates – An Illusory Scam Or A Legitimate Offer?

Let’s focus on Ally Bank’s greatest and most dominant selling feature – its consistently favorable high yield savings account and CD rates. Despite the depressed state of interest rates across the board, Ally’s current rates have always remained one of the highest. Its perpetual financial issues have forced Ally to continuously offer very competitive interest rate yields to attract new account depositors. Interestingly, it’s these same perpetually high rates that have been recently raising the ire of competing banks, who via the American Banking Association (ABA) lobbying group have complained to the FDIC that the extraordinarily high deposit rates offered by Ally Bank are unfair due to its status as a recipient of subsidized federal taxpayer funds. Ally Bank has responded to the conflict by accusing the other banks of wanting to stifle competition to the detriment of consumers.

It may be a rather draconian way of looking at it, but I feel Ally Bank’s loss is our potential gain as prospective banking customers. Ally Bank’s continued desperation to acquire new deposits and stay sufficiently capitalized, and its willingness to continuously shell out the highest rates to accomplish this objective – is our potential windfall as interest rate seekers. For the foreseeable future, I don’t believe Ally Bank’s rates will plummet any time soon. So long as it continues to be closely monitored by federal government regulators and continues to stay aggressive in its ambitious plan to re-invent its brand, Ally Bank will continue to be a top tier destination for aggressive rate chasers. Let’s just hope the bank can ultimately turn things around and not meet the same failed fates as IndyMac Bank and Washington Mutual.

Ally Bank’s Quest To Build A Better Bank – With No Minimum Deposits, No Fees, No Minimum Balances, and Improved Customer Service

So what’s your personal take on Ally Bank’s recent name change from GMAC Financial to Ally? Great decision to rename itself and shed the tainted reputation of its former self – or merely putting lipstick on a pig as some people have put it? Personally, as a former long standing GMAC Bank customer, I’m extremely pleased that Ally Bank’s decision to overhaul itself included a major name change. While a name change in of itself isn’t capable of changing the corporate culture or altering the pre-existing way of doing things, at the very least it’s a significant gesture that the bank is trying to go in a different direction.

Hoping to improve its relationship with customers and usher in honesty and openness, the new Ally Bank has rewritten its explanations of financial terms in very simple language, curtailed much of its former usage of disclaimers, and pretty much done away with old school tactics such as implementing introductory teaser rates, monthly fees, and minimum deposit requirements. With these changes, the bank has also tweaked its best product features to make them more attractive. Currently, you’ll find that Ally Bank sits at the top or near the top of all ranked reviews of the best money markets, the best high yield savings accounts, and the best CD rates for everything from 6 month to 12 month certificates of deposit. The savings account and CD rates that Ally Bank touts is frequently many times over the national average – topping even the offerings of the best online banks.

Ally Bank has also drastically overhauled its customer service system – installing and heavily promoting its laudable 24 hour, 7 days a week customer service accessibility. In fact, this improved feature is pretty much plastered everywhere on the new Ally Bank website. To test out Ally Bank’s new customer service improvements, I purposely called a few times at weird hours of the night and a few times during office hours. In response to my cadre of banking questions, I received pretty targeted and courteous answers (something I don’t always get from more established banks like Citibank). Of course, despite the company’s financial difficulties in the past, the former GMAC Bank’s customer service reputation has always been generally well regarded in most editorial reviews. Here a quick run through of Ally Bank’s best new features:

1. Promise of the Best Rates: Ally Bank has indicated that it is committed to consistently offering the best savings products featuring the best rates. Historically, the former GMAC Bank has delivered, and at present is still delivering on this promise.
2. No Fake Teaser Rates: Ally Bank states that it will no longer be offering introductory “bait and switch” teaser rates that start very high but later crash. Let’s hope Ally can indeed keep those rates perpetually high.
3. No Minimums: There are no more minimum deposits or minimum balances required at Ally Bank. Feel free to open a new account with a whopping $0.00
4. No Sneaky Disclaimers: More transparency on rates and terms along with less usage of confusing legalese and jargon.
5. No Penalty CDs With No Strings Attached: One of Ally Bank’s best new features is the no withdrawal penalty certificate of deposit. Customers can withdraw funds prior to the maturity date without paying a fee and transfer the funds to any account at any bank without penalty charge.
6. Sleeping Money Alerts: In an effort to encourage customers to continuously seek out higher rates, Ally Bank will send out notices to customers when funds have been idle and could be earning a higher rate of return.
7. 24/7 Customer Service: Ally Bank now offers around the clock 24 hour, 7 days a week access to a live call center agent for customer assistance help. Just dial (1-877-247-ALLY)

Full FDIC Insurance Limit Protection With Ally Bank Up To $250,000

If you are like many of the high interest rate seekers out there drawn to the new Ally Bank because of its exceptionally high rates, you ought to be mindful of the online bank’s viability issues and ability to stay operational. Despite the name change, Ally Bank is still the same struggling GMAC Bank, at least until its aggressive marketing allows it to snag more customer deposits and become better capitalized. Until then, the possibility of an Ally Bank failure is always a real and serious concern.

But fortunately, like most reputable banks out there, Ally Bank accounts are fully insured and guaranteed by the United States government’s FDIC insurance – confirmed as FDIC certificate 57803. Based on recent changes with FDIC regulations, bank account deposits at FDIC insured banks are now insured up to $250,000 through December 31, 2013. With FDIC insurance, your Ally Bank savings and CD accounts are completely shielded from loss and backed by the full faith and credit of the federal government to be safe in the event of any unforeseen banking collapse. So long as you stay within the $250,000 FDIC limits, regardless of what happens to Ally Bank, there really is no need to be nervous – your assets are fully protected. If you are unsure about putting your money into the hands of a newly renamed bank with a past, there are plenty of other highly rated banks to choose from – albeit touting rates that aren’t as lucrative or as high as that offered by Ally Bank.

Extra Information and Resource

• Ally Bank ABA/Routing Number for direct deposits and ACH transfers: 124003116
• Ally Bank Customer Phone Number: 1-877-247-2559 for 24/7 assistance
• Ally Bank E-mail: customercare@ally.com

Source URL: Ally Bank Review: Savings Account and No Penalty CD Rates

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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As of mid-May 2009, GMAC Bank is now officially called Ally Bank. With a new aggressive marketing blitz on cable TV channels and via Internet ads, the new purple themed Ally Bank is embarking on a quest to rebrand its image and change the public’s perception of its former beleaguered self. Touting the new banking persona as a new and better type of bank – an ally and friend to consumer customers of sorts, AllyBank.com’s new banking slogan is – “No minimum deposits. No monthly fees. No minimum balance. No sneaky disclaimers.”

Sporting a very impressive array of high yield savings accounts, money market accounts, and high interest CD rates, Ally Bank is hoping to win the public over with its dazzling new message and cache of revamped services. Looking back at its history, the bank formerly known as GMAC Bank has certainly had quite a rough and tumultuous ride to get to where it is today.

Ally Bank – Starting Anew With A Fresh New Name and Top Tier Rates

For those not in the know, Ally Bank used to be GMAC Bank, a bank built on the troubled and rather shaky foundations of GMAC Financial Services – the banking, savings, and financial lending arm of currently bankrupt American vehicle manufacturer General Motors (GM). Originally established as a lending authority to provide automotive financing loans to car buyers and auto dealerships of GM brand vehicles, GMAC has been hit particularly hard by the housing crisis and subprime mortgage meltdown. The resulting economic recession, coupled with surging unemployment rates and the collapse of consumer spending, which in turn has had a significantly negative impact on automobile purchases – have all severely hit the company’s bottom line, pushing it to the abysmal financial brink.

On the verge of collapse, GMAC Financial was one of many financial institutions that ultimately converted itself from a loan issuer and servicer into a new bank holding company (dubbed GMAC Bank) to make itself eligible for the federal government’s infamous taxpayer-funded Troubled Asset Relief Program (also known as TARP). But saddled under the burden of its toxic cache of bad lending decisions and struggling under the weight of its subprime home mortgage loans, not to mention the operational losses of billions of dollars, the converted GMAC Bank has since embarked on a rather valiant but desperate quest to save itself by building a new reputation as a legitimate deposit institution. To start anew and completely re-design its banking image, in the middle of May 2009, GMAC Bank dropped its own namesake moniker from its brand, officially changing its name to Ally Bank in order to shed the reputational baggage of its former connections. Only time will tell whether the newly minted Ally Bank’s ambitious plans will prosper and succeed.

For now at least, Ally Bank remains one of the top online banks in terms of offering the best high interest savings account deals and high yield CD rate offers – pretty much continuing where GMAC bank left off. Despite its troubles, GMAC had always offered top interest rates for its banking products – and Ally Bank appears to be no different in this positive regard. Due mostly to its ambitious plans to establish itself as a leading and reputable provider of high interest banking products, if I had to project – I would wager that Ally Bank rates will likely stay perpetually high for quite some time. In terms of motivation to keep existing rates at their highest market peaks, Ally Bank’s shaky past actually works in the favor of prospective consumers. Desperate to capture the attention of skeptical new customers and convince them into becoming loyal bank depositors, Ally Bank is likely going to have to keep its interest rates high to achieve its lofty new business acquisition and retention goals.

Ally Bank.com’s New and Impressive High Interest Banking Products

Along with the notable name change, Ally Bank has also significantly improved its banking website and modified its product offerings to comport with the new and improved image. The company has made drastic upgrades to its customer service features – now offering zero wait time, 24 hours, 7 days a week telephone customer support (1-877-247-ALLY) – boldly plastering this new convenient feature on every page of its online banking website.

As the new name is supposed to conjure up images of a neighborly local credit union that’s genuinely in tune with the needs of its customers, Ally Bank’s former features and previous limitations have been re-worked and re-tooled to offer up a seemingly better banking experience. Eager to re-brand itself as an honest, straightforward, and transparent bank, the folks at Ally Bank have completely done away with all minimum deposit requirements, monthly fees, and minimum account balance charges. New Ally Bank customers are now free to deposit as little or as much as they wish into their new online savings or CDs, as all account deposits now enjoy the maximum interest rate offered regardless of balance. Here are some of the new and very compelling bank deals and offers from Ally:

1. Online Savings Account – The high yield online savings account from Ally Bank earns a very high APY rate – much higher than its competitors.
2. Money Market Account – With no account minimums and no monthly fees, the Ally Bank money market account with check writing privileges can be opened with as little as $1.
3. Classic CD – The classic fixed interest certificate of deposit from Ally Bank with automatic renewal features is a high yielding CD with no monthly fees and no minimum deposit requirements. The CD account compounds interest daily for maximum rate earnings.
4. No Penalty CD – The new and unique No Penalty CD offer from Ally Bank allows you to withdraw your money and put it anywhere, without the hassles or shortfalls of an early withdrawal penalty fee. This special CD account has no fees of any kind and offers high fixed rates with no minimum deposit requirements.

FDIC Insurance Guarantees and Protects Ally Bank Customers From Loss

If you remain unsure and uneasy about the safety and security of money deposited with Ally Bank – you’re not alone. Despite the name change, Ally Bank is still essentially the same embattled GMAC Bank, but with a new shiny purple colored exterior and improved marching orders. Those who are concerned about the safety of their money in the event of a major run on the bank have good reason to be worried. Bank failures and financial instability are serious issues in this day and age, as several major banking institutions like IndyMac Bank and Washington Mutual have poignantly demonstrated in the past few months.

Fortunately, Ally Bank deposits are fully insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum coverage limits. FDIC insurance currently insures all of Ally Bank’s certificate of deposit options, online savings accounts, and money market accounts up to $250,000 per depositor. Per recent changes with FDIC regulations, bank account deposits at FDIC insured institutions are now insured up to $250,000 through December 31, 2013. With FDIC insurance, your savings and accounts are completely guaranteed by the full faith and credit of the United States government to be safe from loss and protected in the event of any catastrophic banking failure or bankruptcy. So long as you stay within those limits, you will be fine.

As a former GMAC Bank customer myself, I woke up one day to find that my accounts had been converted over to the new Ally Bank. The conversion was surprising but not unwelcome as I rather like the new and improved features. As my new Ally Bank savings account rates have remained high and stayed the same, I have little to complain about. But don’t take my word for it – if you are interested in Ally Bank, visit their new website at AllyBank.com and check it out for yourself.

For a more in depth critique and assessment of the newly renamed GMAC Bank, you may want to read my detailed Ally Bank review. Feel free to share your experiences and thoughts!

Source URL: GMAC Bank Is Now Ally Bank

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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While high yield savings accounts and CD deposits (with their formidable FDIC insurance guarantees of up to $250,000 and steady rates of return) will continue to serve important and irreplaceable roles as reliable short term cash savings options for consumers, those seeking a higher rate of return may want to start looking elsewhere. Despite this type of depressed market, a variety of rather compelling CD alternatives have emerged as serious high interest contenders, all worth a review.

High Yield CD Rate Alternatives May Not Be Fully FDIC Insured, But Many Still Offer Safety, Security, Liquidity, and Low Risk Opportunities

Before you decide to move away from traditional bank savings and CD accounts, it’s important to think about how much additional risk you are willing to assume in your new short term savings vehicle. If you want maximum protection from loss and want absolute peace of mind, then it’s best to stick with your existing flexible savings accounts and CDs, albeit at current unimpressive rates. But if you are willing to harbor slightly more risk or give up some liquidity (degree of immediate access to your money), investing in financial products such as peer to peer loans (as a lender) or money market funds may enable you to get a much higher rate of return, while still enjoying a historically proven track record of safety. But keep in mind that the potential returns on such savings alternatives like mutual funds, bonds, and p2p loans are higher because the account holder is agreeing to assume more risk than one would with a bank savings account or CD. Such alternatives do not get the same iron clad FDIC insurance protection of up to $250,000 that all reputable banks in the United States enjoy. FDIC insurance via the federal government ensures your bank based checking, savings, and CD accounts won’t be lost even in the event of a catastrophic bank failure or bankruptcy. While some of the high interest rate alternatives like credit unions and brokerage accounts still afford account holders a measure of protection against unexpected loss with their equivalent versions of the FDIC, not all such alternative investments do.

Please keep the risk, liquidity, and interest rate tensions in mind as you review the potential possibilities below in your pursuit of higher interest rate deals and offers. Stay away from much riskier and more potentially volatile investments like stocks, mutual funds, index funds, foreign currency CD deposit accounts, and gold investments. While these are great investment assets for portfolio diversification purposes, when it comes to savings account alternatives and comparables, you ought to stick with steady deposit options where the risk of loss can be greatly minimized and controlled.

List Of the Best CD Rate and High Interest Savings Account Alternatives:

1) Peer To Peer Lending High Yield Rates – If you’re searching for a way to earn a fairly steady average rate of return in excess of 9.05% APY, you may want to consider investing money with popular peer to peer online lending sites like Lending Club (see review). Lending Club.com’s online application is free and it doesn’t cost anything to sign up and review the online platform features for yourself. Social network lending, also known as P2P lending, offers a way for ordinary and willing consumers to lend money to cash strapped borrowers and local entrepreneurs at competitive interest rates. While the lending website administers the actual loaning process and handles the fees and charges with the borrower, it’s the consumer lenders like you and I who get to pocket the potentially high yield interest rate earnings. While per my review, Lending Club.com is one of the few P2P lending sites today that’s actually undergone and completed the SEC filing and quiet period process, other up and coming social lending alternatives include Prosper.com, PertuityDirect.com, GreenNote.com, VirginMoney.com, and Loanio.com.

While unlike savings accounts and CD rates, P2P lending loans provided by sites like Lending club are not FDIC insured or absolutely protected from loss, average interest rate yields have averaged over 9.00% APY over the past 18 months. Because as a prospective social loan investor you get to decide the quality of the personal loans you wish to extend, it’s possible to diversify your risk among numerous small loan accounts and vastly minimize your risk of loss. Much of this was learned from my own personal experience. As a Lending Club loan investor and participant for more than a year now, I have more than $1,000 invested into several high quality loans (loans acquired by borrowers with high FICO credit scores and trouble-free credit reports). My annual interest rate across all of my outstanding note investment have consistently earned me a steady 8.00% APY, with no defaults as of yet.

While I wouldn’t recommend plunging one’s entire life savings, emergency funds, or new home deposit, into Lending Club or peer loan investments, from a high yield savings account investor stand point, the potential interest rates they offer are rather compelling. The whole practice of social micro lending is still not fully in the eyes of the mainstream media yet, but this CD alternative is likely to grow in popularity in the coming years.

2) Online Savings Account Rates (Become An Aggressive Interest Rate Chaser) – Online savings accounts, high yield reward checking accounts, and certificate of deposit accounts offer something that no non-bank alternative can match – and that’s solid FDIC insurance protection from loss up to the $250,000 per account limit. If you’re determined to stick with the top online savings accounts due to the FDIC protections, high liquidity, and ease of transferability that they afford, you may wish to consider being more aggressive in your approach towards bank rate chasing. Aggressive interest rate chasers usually open more than a few (10+) high yield direct accounts with the top online banks, and monitor interest rate changes and fluctuations closely (almost obsessively) for the best deals. When there is a noticeable interest rate shift, aggressive bank rate chasers will quickly take advantage of free ACH features to execute an electronic bank transfer in pursuit of the higher rate account. Of course, when all rate offerings across the board are in the doldrums like they are now, this rate chasing strategy doesn’t always make sense. The hope for many is to simply capture those special limited time rate promotions by online banks looking for a surge in customer deposits and willing to entice with extraordinary rate offers.

3) CD Rates (Consider Longer Term CD Rate Offers) – Chasing higher fixed CD rates require banking consumers to sacrifice liquidity in exchange for higher potential interest yields. The basic premise behind certificate of deposit rates is that they offer progressively higher rates the longer you are willing to forgo access to your deposited funds. The longer the CD account term, the more interest rate money the bank is willing to provide you in exchange. Take the high yield Ally Bank CD rates for example. Their best saving account rates are currently around 2.25% APY, while their best 1 year classic CD’s are offering 2.80% APY. Extend the CD term to 2 years, and the CD rate jumps to 2.90%. Extend the CD deposit term even higher to 5 years, and the interest rate surges to 3.50% APY. If you truly want to maximize your CD rate yield, you will have to consider longer duration CD terms such as 3 or 5 year CD’s over short term 12 month ones.

Those rate chasers seeking to capture the high interest returns of longer term multi-year CD deposits can inject some liquidity into their fund accessibility by adopting the ever popular and highly touted staggered CD ladder strategy. Another way to maintain some liquidity but still earn high CD rates with longer term accounts is to look into a no penalty certificate of deposit such as the ones that Ally Bank and other online banking institutions provide. No Penalty CD’s offer high CD rates with the freedom of no-fee early withdrawal. Also, look out for frequent online promotions and special CD deals by up and coming online or local banks looking to snag new accounts and time deposit customers. Those special CD rate deals they tout frequently are 2 to 3 interest rate percentages above and beyond current market rates.

4) Credit Unions and Local Community Banks – While online banks (“Direct” banks) generally offer much better interest rates than traditional brick and mortar banks due to their substantially lower overhead costs, you can frequently find exceptional and even exclusive banking deals by going local. While local credit unions and neighborhood banks often have limited bank branch locations and access, they compensate for their smaller presence by touting checking, CD, and savings account rates that are as good or even better than those offered by the best online banks. But keep in mind, oftentimes, local credit unions and banks like SECU, Navy Federal, PenFed (Pentagon Federal Credit Union) cater to specific segments of the community such as teacher’s unions, state or federal government employees, public or private university employees, or members of the military – and thus often have stricter bank membership and account qualification requirements. But despite the extra hoop jumping and limited membership demands, the bank rate deals they dangle are worth it if you can find them and qualify. Best of all, credit union accounts are protected from loss by the National Credit Union Administration (NCUA), an FDIC insurance-like entity.

5) High Yield Checking Account Rates (Reward Checking) – While high yield reward checking account rates have steadily declined the way savings and CD rates have, they remain much higher than even the best long term CD rates, frequently as high as double the top rates. However, most of these high interest checking accounts have several major account limitations and drawbacks. They frequently have stringent debit card usage requirements (at least 10 debit card transactions per month), and they usually cap checking account balances at a maximum of around $25,000 (although maximums as high as $250,000 can still be found). Balances are permitted in excess of the maximum limit, but only the funds within those limits will earn the highest special checking account rates. While I highly recommend taking advantage of reward checking account rates, I do recognize that they can be cumbersome alternatives for some consumers – primarily due to their strict debit card usage requirements. If you are a big credit card user like myself, being compelled to use a debit card to make a sizable number of monthly purchases can be a big burden.

6) High Yield Money Market Account Rates – If you wish to remain a high yield savings account rate chaser, you might as well take a look at high yield money market accounts as well. Essentially, money market accounts, or MMA’s as they are frequently called, are hybrid mixtures of checking accounts and savings accounts. While offering the high competitive rates of savings accounts, they also offer the check writing benefits of traditional checking accounts. MMA rates will rarely blow you away or wow you with their interest rate yields, but many local credit unions and online banks like EverBank have been pushing special high interest promotions for their money market offerings of late.

7) U.S. Treasury Bills, Notes, and Savings Bonds – Backed by the full faith and credit of the United States government, federal government-issued Treasury Bills and Savings Bonds enjoy rock solid protection against loss and forfeiture. Treasury Notes and Bonds are debt obligations issued by the U.S. federal government. The revenue generated from the bonds are used to raise capital income to pay for the federal government’s routine operations and expenses. Because of the lack of default risk, Treasuries typically offer lower interest rates than most other forms of securities, however the longer term notes and bonds offer pretty impressive rates that may sometimes match or even exceed ordinary bank rates. With their FDIC-like protections, Treasuries are worth a look. Check out TreasuryDirect.com for your Treasury security needs – it’s the only official financial website that lets you buy and redeem securities directly from the U.S. Department of the Treasury in paperless electronic form. But before you buy, remember to consider the liquidity issues and wisdom of locking up your money into long term Treasuries.

8) Consider Paying Off Credit Card Debt - If you are sitting on top of some idle cash or mulling what to do with the extra funds in your savings account that’s not earning the high yield interest rate you’d like, how about using the extra money to pay off some high interest debt, especially credit card debt if you have any. Besides, unless you’ve got a ton of cash in those savings accounts, chances are, an extra few interest rate points earned by shifting them into alternative investment vehicles isn’t really going to net you all that much in extra savings anyway. You might as well put it towards paying off debt like your high APR credit card balances, home mortgage obligations, or even your student loans. Don’t abandon the need to maintain at least 9 months – 12 months worth of emergency funds in your stable savings accounts and CDs, but using available funds to pay off presumably higher interest debt is always a good decision.

Please let me know of any more good deposit alternatives other than savings accounts and CD’s that offer higher rates but still offer a reasonably comparable level of safety.

Source URL: High Yield Alternatives To Savings Accounts and the Best CD Rates

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Remarkably, despite a struggling economy and lower interest rates across the board, high yield reward checking accounts are still touting bank rates as high as 5.50% APY in certain locales. At their peak, the best reward checking account offers were topping off at an astounding 6.00-6.50% APY. Definitely nothing to sneeze at. However, before I get started on my usual long winded blog post about the financial possibilities and benefits of high yield reward checking accounts, let me say a few things up front. No, you’re not going to be able to roll your interest rate earnings into a mint or become a millionaire overnight. But if used properly in tandem with other interest chasing pursuits, high interest checking accounts have the potential to really give your otherwise idle savings a big boost. The associated interest rates with these special bank reward checking accounts are often higher than the top savings account rates, the best money market rates, and even the highest bank CD rates.

Demand A Higher Interest Rate For Your Checking Account Cash

Personally, I don’t usually keep a ton of money in my checking account to begin with, preferring to stash them in hassle free high interest producing assets like savings accounts and certificate of deposits. However, because check writing and convenient ATM access are still daily necessities in quite a few situations (example: not all apartment landlords allow tenants to pay their rent via credit card), most of us are still pressed into keeping a sizable amount around for such purposes. But unless you have a better storage solution for your on-demand cash, you might as well milk the most out of it while waiting for such checks to clear.

The vast majority of people don’t actually realize how pitifully low their checking account interest rates really are, particularly if they have accounts with big name banks like Citibank, Bank of America, or Wells Fargo. Despite their instant brand recognition, these popular banking institutions are notorious for shelling out ridiculously low rates – frequently only offering pennies on the dollar – in the neighborhood of 0.05% – 0.25%. With the way most banking transactions and bill payments are made online these days and with the way most online banks are offering reimbursements of customer ATM fees, there is no need to tolerate such paltry token interest payments any longer. A growing number of online banks and credit unions in out of the way places are leading the charge when it comes to offering its customers competitively high interest rates in exchange for their bank checking business.

However, to get those top high yield reward checking account rates – there is a catch – several in fact. Reward checking accounts often demand much more stringent and active account maintenance requirements than other bank account types like savings and even money market accounts. Most of the highest paying reward checking accounts require users to engage in fairly heavy debit card usage and agree to certain direct deposit activity pre-conditions – all designed to instill customer loyalty with that particular bank. Many of those hassling requirements are discussed in greater detail below, but fear not – most if not all can be overcome and easily met with some practical adjustments in your daily banking practices and changes in your tool of choice when making card based purchases.

List Of The Best Banks With High Interest Reward Checking Account Offers

Meeting Reward Checking Account Requirements To Get The Highest Rate

Compared to savings accounts, bank CD deposits, and money markets – checking accounts, with all of their unlimited check writing privileges and unlimited ACH transfer benefits, are much more expensive for banks to operate and maintain. High yield checking accounts compensate for the extra cost of offering higher interest rates by requiring reward checking account holders to jump through extra complex debit account activity hoops and to satisfy higher monthly maintenance thresholds – in the hopes of turning them into loyal and dependent banking customers.

The requirements for each high yield reward checking account differs from program to program, but typically, certain requirements must all be met for the customer to maintain the highest premium interest rate yield. If  all of the requirements are not met, the customer falls into a lower earning reward checking tier. Some of these requirements include a certain number of debit card usages per month, mandatory participation in online bill pay and direct deposit, and maintenance of a certain minimum monthly balance.

One thing you’ll notice among these high yield reward checking account offers is that most of the headaches and trickiness associated with their use are focused around the debit card transaction requirements. Many reward checking accounts require at least 10 or more debit card transactions a month to continue receiving the highest interest rate. Because not everyone is a habitual user of debit cards, it’s not always easy ditching the reward credit cards in favor of bank debit check cards. Ultimately, the banks that offer these lucrative checking account packages make money by profiting off of the debit card transaction fees and other charges that they hope you will accrue and rack up over time.

When it comes to meeting the debit card usage requirement, you certainly have options at your disposal. One is to simply use your bank debit card for all of your daily purchases and transactions as you would normally use your credit cards for. Another option is to purchase a large number of small denominational items (25 cent or $1.00 candies for example) once a month and spend a few moments at the self checkout aisle at your neighborhood supermarket and swipe each item in as separate debit card purchases – up to the required monthly number necessary.

Another interesting way to meet the debit card transaction limit is to make multiple debit card powered PayPal donations to charities of your choice up to the required number of debit card transactions. With minimum donations of $1.00 each, you should be able to hit your limit with ease. Not only does your chosen charity get a few bucks worth of donations, you get your high interest rate yield, along with payments that are also deductible as charitable donations come tax time (essentially hitting 3 birds with 1 stone).

Local Banks Are More Convenient, But Nationwide Online Banks Offer Better Deals For High Interest Reward Checking

In terms of ATM and branch accessibility, the emergence of ATM fee reimbursement programs and improved online customer support have greatly closed the gap between online banks and brick and mortar institutions. However, with all things considered, it’s generally still a better idea to go with a local bank or credit union whenever possible, particularly when it comes to checking accounts. Unlike savings accounts and CD’s which tend to see much more limited transactional activity in comparison, checking accounts are by their very nature, much more heavily used on a day to day basis.  Because of their heavy involvement in ATM withdraws, deposits, check writing, and bill payment activity, they are more likely to demand a greater degree of customer service attention than more static savings based accounts. In the area of dispute resolution, it’s almost always better to have the option of speaking to a live customer service rep face to face at a local branch, than trying to explain your problem solely through email or phone.

However, it’s a trade off. What you lose in the way of convenience with an online-only or out-of-state bank, you are likely to gain back in the way of much higher interest rate yields for your willingness to accept a measure of inconvenience. Remember, the best reward checking account offers are not always found with banks that are locally based. Many of the best offers are found with fully FDIC insured banks that are frankly no names and located in the booniest of boonies.

Source URL: Best High Interest Reward Checking Account Rates

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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With the lowering of interest rates by the Federal Reserve in response to the current economic climate to the lowest levels we have seen in years, the interest rates offered by high yield savings accounts and high interest certificate of deposits are now simply not as attractive as they once were, only a few years ago. With the stock market still suffering from unstable price swings and massive volatility across all sectors, it makes present day sense to look towards alternative investment ideas to make some money.

While I have been a quiet Lending Club member for a few years now since the online company opens its doors to loan investors, I haven’t felt the need to review the program until now. Until recently, the top high yield savings account and best CD rates at most banking institutions offered a reliably consistent rate of return on deposits. But with market turmoil ever present and the specter of worsening bank failures looming, I’ve begun to turn my attention to other investment possibilities in an attempt to diversify my portfolio risk and seek a higher rate of return. The ability to earn a reasonably competitive interest income with the added ability to diversify risk via peer to peer lending networks like Lending Club and Prosper is becoming more and more attractive. At the very least, P2P lending programs offer potential profit seeking investors like myself the ability to play the role of the banker and help people out with their loan needs, while at the same time earning interest income that’s higher than what’s currently available in a regular savings account or bank CD.

What Is Lending Club and What’s P2P Lending and Borrowing All About?

Lending Club is a person to person, also known as a peer-to-peer, lending website that matches ordinary borrowers with ordinary local lenders (who are ordinary people themselves) through a pairing system that combines social networking, a computerized search algorithm, and manual credit worthiness checks. Essentially, Lending Club is a way to offer low interest loan rates to borrowers with good credit, while at the same time offering willing potential lenders like you and I the ability to earn a reasonably high interest rate of return with a relatively low risk of default on the loans that we extend to these borrowers. It’s an alternative way (that’s growing in popularity) for ordinary Americans to borrow money, get qualified, and get funded for loans expediently without the complex hassles of applying for traditional bank loans or having to deal with the riskier side of 0% balance transfer credit card offers or getting mired into the clutches of payday loans. On the whole, Lending Club offers borrowers better interest rates than can be obtained from any credit card offer, even those that purport to be low interest.

The whole business concept behind P2P lending networks like Lending Club is built on the premise that borrowers will be less likely to default to members of their own local communities. The Lending Club online system offers anonymous borrowers and local micro loan lenders a way to find each other and get matched up based on personal preferential demographic factors like geographic location, educational and professional background, and activity within a particular social network like Facebook (the social networking site where Lending Club had its upstart roots).

Still don’t believe Lending Club or peer to peer lending and borrowing programs are legit? Just take a look at a recent article from the Harvard Business Review, which notes the remarkable rise of peer to peer lending programs and documents the rise of such emerging programs as the next big wave of important financial innovations in the coming years, especially in light of the ongoing economic recession and the collapse of traditional lending institutions. It looks like P2P lending is here to stay, one way or another.

My Lending Club Experience – Investing In High Interest Bearing Loans

As a person who’s always up for trying out new financial products, I signed up for Lending Club when it first came out and have been using the online service ever since. So far, my Lending Club experience has been pretty positive, yielding fairly respectable returns in the process. Currently, my entire Lending Club participation has only been that of a lender and I have yet to participate as a borrower. However, while I can’t comment on Lending Club through my own personal experiences as a borrower, I have had numerous extended online conversations with actual people who have used the Lending Club service for their borrowing needs, primarily to help pay down existing high interest debt. Most of the Lending Club borrowers I’ve come into contact with have been pretty receptive to the user-friendliness of the Lending Club online platform and pleased with the convenient access to reasonably priced loans that the website affords, particularly when compared to last ditch lending alternatives like car title loans or payday cash advances.

One of the reasons why I slightly prefer Lending Club over other peer to peer lending networks – is its non-eBay auction-like nature. Having to engage in a convoluted bidding process for loan offers or loan investment prospects would inject too much complexity into an online loan matching process that’s trying to cater to the ordinary masses. Fortunately for investors in particular, Lending Club offers its loans on a take it or leave it store front basis. If you find a loan and the credit characteristics and interest rate of return strikes your fancy, you can buy it on the spot, or pass.

As primarily an experimental investor and cautious lender, I have mostly sought out high quality, lower risk of default type loans. As a relatively risk adverse lender with an infrequent appetite for riskier loans, I am not to keen on the prospect of any of my loan investments ever defaulting. However, at the same time, I understand that it’s a trade off – safer loans generally yield much lower interest rates of return, while riskier loans almost always yield much higher rates of return to compensate for the higher risk of default and nonpayment. The vast majority of my Lending Club loans as a lender have been A-grade, personally-chosen loan investments. Thus far, I have stayed away from using Lending Club’s computerized LendingMatch program to pair me with desired loans. I guess I have confidence in my own ability and prefer to retain control, rather than let some computer software do the leg work for me.

Currently, I have a little more than $800 invested into numerous micro loans with local borrowers. I’m always on the look out for high quality, attractive loan prospects but unfortunately, they are not always available. When they do become available, I try to snap them up quickly. These A-grade Lending Club loans have become quite a set of high yielding cash cows for me. Thus far, I’ve been very lucky and relatively fortunate as none of the Lending Club loans that I’ve extended have been significantly late or have entered default. Intriguingly, my Lending Club loans have earned me a steady interest rate of almost 8%, which is 2-3 times higher than what I earn with my best CD rates, best high yield savings, and even best money market accounts. As Lending Club continues to grow in popularity, its borrower base will inevitably grow larger in size, and the volume of attractive loan investments are bound to increase. If my default-free track record holds, I may decide to dabble in slightly riskier Lending Club loans in the near future to see if I can snag a higher rate of return but still maintain my default-free streak. Stay tuned!

For those wondering about the prospect of income taxes levied on the earnings off of Lending Club loans – yes, you are personally responsible for paying ordinary income taxes on all interest income that your Lending Club investing activities generate (you are issued a handy 1099 form at tax time).

Setting Up A New Lending Club Account Is Free and Quick

Opening an account with Lending Club is easy and efficient, and as expedient as opening a new online bank account. To open an account and start lending money through Lending Club, you simply submit your personal information, bank name and bank transfer account numbers, along with some optional background information. Thereafter, the account registration process wraps up with the obligatory bank test deposits to verify true bank account ownership

Opening a new Lending Club account for borrowing purposes on the other hand entails a stricter registration process that necessitates that the applicant provide a Social Security Number and other identifying information for a full credit report and  FICO credit score background check (try looking up your own free FICO credit score beforehand). Though Lending Club imposes a rather strict set of prime standards for borrowers, this attention to credit quality over mere quantity ultimately ensures a better experience and loan exchange for both lenders and borrowers in the long run.

Borrowing Money and Getting A Loan From Lending Club

For prospective qualified borrowers, Lending Club offers an attractive way to obtain a loan at comparatively affordable rates – offers that beat out most personal bank loans and credit card interest rates. However, do be forewarned that Lending Club’s qualification standards for borrowers are high grade and rather stringent. Lending Club pretty much only wants prime, or near prime borrowers with good to excellent credit. Those with very bad or subprime credit are probably out of luck when it comes to Lending Club, and will probably have to resort to less than advisable, bottom tier loan alternatives such as bad credit credit cards or payday loan borrowing.

The process of applying for a Lending Club loan is surprisingly straightforward. Approved Lending Club borrowers get a 3 year unsecured fixed interest rate loan, with repayment obligations managed by Lending Club. There is no haggling or negotiations to contend with as you simply submit an application for a loan, and based on your FICO credit score, credit report, and background check, you are offered a fixed interest rate loan to accept or reject. At Lending Club, you can borrow anywhere from $1,000 to $25,000 as an unsecured loan, to be used for just about any purpose, including but not limited to, high interest credit card repayment or small business financing.

To get started as a Lending Club borrower, simply open a new Lending Club account as a borrower, and submit a loan application. At the time of registration, Lending Club will obtain a credit report and FICO credit score check of the borrower in order to rate and assign a credit risk grade (ranging from A thru G) and determine the appropriate interest rate the borrower can solicit on the site. Once approved, the borrower is free to list his or her loan request on Lending Club for prospective lenders to review and examine. During the credit risk scoring process, particular attention is paid to the borrower’s credit rating history, the amount of the desired loan balance, and the borrower’s current debt to income ratio.

Lending Club’s standards for borrowers are high and the program only currently accepts members who can meet the followings status and credit history requirements:

• Must be a U.S. resident.
• Must have a FICO credit score of at least 660, with a debt to income ratio (excluding mortgage) below 25%.
• Credit history report must indicate that you are a responsible borrower.
• Have at least 1 year of credit history, showing no current delinquencies, recent bankruptcies (7 years), open tax liens, charge-offs or collection accounts in the past 12 months.
• Must have no more than 10 inquiries on your credit report in the last 6 months.
• Must have a revolving credit utilization of less than 100%.
• Must have more than 3 accounts in your credit report, of which more than 2 are currently open.

For their middle man loan matching services, LendingClub charges a processing fee (ranging from 0.75% to 3.50% based on Lending Club’s assessed credit risk grade), which is included in the annual percentage rate (APR) and is subtracted from the loan proceeds prior to disbursement to the borrower.

Lending Money and Earning A Comparatively High Interest Rate On Lending Club Loans

To qualify as a Lending Club loan investor, you must meet and satisfy certain preliminary state and financial suitability conditions – translation: you must belong to an approved state and/or pass certain income and net worth requirements. With exemptions for certain states such as California, you generally must have an annual gross income of $70,000 or a networth (including your home) of at least $250,000.

As for the state residency requirement, you must be a resident of one of the following states below. Your state not on the list? Fear not – Lending Club has submitted proposals to all states and new ones are being added as they are approved.

• California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Minnesota, Mississippi, Montana, New Hampshire, Nevada,New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.

As a prospective Lending Club loan investor, you can start with as little or as much money as you’d like. Once you have opened a Lending  Club account and transferred in the appropriate funds for lending purposes, you will be asked to indicate your level of risk tolerance (credit risk ratings that range from A – G) and prompted to search for loans either manually, or get matched up with prospective loans with the aid of Lending Club’s computer algorithm based LendingMatch software. The Lending Match program generates a suggested loan portfolio based on your level of risk desired and your connections with the borrowers in your account. As mentioned above, I have chosen to stick with manual loan evaluations (with great success thus far) as I feel more comfortable with my own ability to assess loan prospects than entrust that duty to a random computer program.

Those who are new to peer to peer lending may wish to start with small incremental investments and tinker a bit with the seesaw effect of risk and interest rate of return, before diving into larger denominational investments. Those who get the hang of it may actually find the loan investment hunting and evaluation process rather interesting and personally rewarding (remember, you are potentially helping out someone who is in desperate need of a loan to get his or her life going again).

There are two loan components that will be of paramount importance to prospective Lending Club loan investors – the interest rate of return offered, and the rate of default risk. The current range of interest rates that Lending Club lenders and investors can potentially earn varies from 7.37% to 20.11% (depending on how risky the loan is in terms of risk of default, as determined by the automatically assigned Lending Club loan grade.

The worst case scenario for any Lending Club loan lender or investor is the dreaded loan default, which occurs when the borrower refuses or is unable to fulfill the obligations of his or her loan principle and interest rate repayment. Lending Club’s website indicates that the current overall default rate is less than 3%. However, and probably due to my personal strict and stingy loan evaluation tactics, I have yet to experience a loan default on my Lending Club loan investments. On the downside, I probably earn a much lower interest rate of return on my loan investments than I would be able to garner if I opted to invest in slightly more riskier B and C grade loans.

As a Lending Club loan investor, one of the general statistics and trends I track closely is the company’s continuously generated performance stats for all loans. As you can see from the current Lending Club loan stats, Lending Club does a pretty commendable and transparent job of providing updated statistics relating to all late and defaulted loans for all members to review and assess. As the updated loan default statistics demonstrate, rather surprisingly perhaps, the vast majority of loans (particularly the A graded ones) are current and not late or in default. The B and C loans are also not as horrendous in terms of late payments or defaults as one may have assumed. Those who are into mathematics and willing to play the odds of probability may find it worth the slight risk of partial loan default to capture the higher interest rate of return on their investments. As always, smart Lending Club investors ought to spread their loan investments around to minimize the chances that one unexpected loan default will torpedo their entire Lending Club portfolio.

Lending Club Loans Are Now More Liquid Than Ever And Can Be Traded Like Securities

As Lending Club has completed the SEC registration process, all Lending Club notes and loans issued on or after October 14, 2008 can now be purchased and sold as securities, as they now represent Lending Club security investments rather than direct loan obligations of the underlying Lending Club borrower.

Now instead of waiting for the 3 year locked in loan commitment notes to reach maturity, they can now be traded on the secondary market through Lending Club’s trading platform agreement with FOLIOfn Investments Inc, greatly enhancing their liquidity and versatility as investments. While only loans and notes issued after Lending Club’s October 14, 2008 SEC registration date may be traded, in due time, it is reasonable to expect the number of trade-able notes to balloon in the coming future.

For those concerned about the safety and security of their invested loan funds as a lender in the event of a Lending Club failure or bankruptcy, Lending Club actually addresses this issue on their webpage. According to Lending Club, in the event the company, for whatever reason goes out of business or is no longer able to continue servicing loans, in order to ensure continuity, Lending Club has a backup servicing and successor agreement with Portfolio Financial Servicing Corporation (www.pfsc.com) for PFSC to take over loan servicing.

While the Lending Club business entity itself is still burning through venture capital cash like it’s going out of style, particularly as it focuses on promoting the growth and adoption of peer to peer lending, I personally think the concept of P2P social network lending is here to stay. Whether companies like Prosper or Lending Club will be around forever, or whether they ultimately will be bought out by more traditional banks eager for a piece of the peer lending pie, remains to be seen.

Source URL: Lending Club Review – Social Network Peer Loans and Borrowing

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Amidst the current economic recession and ongoing credit crisis, there is an active flight to quality as consumers flee risky and volatile investments in stocks and mutual funds in favor of safer asset choices like high yield savings accounts and certificate of deposits (CDs) with the nation’s best banks. But while bank deposit products all enjoy similar safety and security assurances under the auspices of the federal government, they are not all created equal, as certain deposit categories offer higher interest rates than others, while others afford greater comparative flexibility.

In the world of FDIC insured banking products, there is a natural give and take tension between the interest rate of return offered by any banking product and the degree of liquidity or flexibility afforded. The rate of return for any banking product refers to the annual percentage yield (APY) or interest rate offered in exchange for investing your money in a particular banking asset. Liquidity and flexibility of any bank account product refers to how quickly and easily you can tap into your money at will and convert it into immediate spendable currency. The general rule of thumb for bank accounts is that the higher the interest rate of return offered, the less flexible or liquid the account. Likewise, the more flexible and readily accessible the bank account product, the lower the interest rate offered as tradeoff.

When it comes to getting the best interest rate of return, the best CD rates easily beat out the best interest rate yields offered by checking and savings accounts most of the time. However, CD terms and conditions tend to be substantially more restrictive compared to the other mentioned bank deposit products. When you open a CD savings account, you agree to lock your money up for a predetermined fixed period of time in exchange for a higher than average fixed interest rate of return. Until the CD deposit term limit matures however, you won’t be able to access the interest bearing CD account early without paying a hefty early withdraw penalty fee. On the other far end of the interest rate/liquidity spectrum are checking accounts. Checking accounts offer the most flexibility and convenience for consumers, with the fewest number of restrictions if any. With checking accounts, you can access your money at any time, write as many bank checks as you wish, execute as many ATM transactions as needed, and generally fund your account with as little or as much money as you’d like. But the inevitable trade off for the more favorable account terms is an account that earns very low interest if any at all. Aside from a few high yield online checking accounts, retail checking accounts offer pretty pitiful APY rates. Don’t count on retiring with the minuscule interest income earned from your checking accounts.

Money Market Accounts Are Hybrid Mixtures Of Bank Checking Accounts and Savings Accounts

Those that want to capture the high interest rate benefits of restrictive banking products like CDs, but still be able to enjoy much of the account flexibility and cash accessibility of checking accounts may want to take a look at money market accounts. Money market accounts offer high yield savings account-type interest rates while also delivering checking account style features like free check writing and convenient access to brick and mortar bank ATM locations. The primary compelling reason to open a money market account is to avoid having to extraneously maintain both a checking account and a savings account. For efficiency sake, some people simply prefer having a single hybrid money market account rather than maintaining multiple specialized bank accounts. I personally don’t mind owning over 15 different checking and savings accounts, but not everyone is so amicable to such artful juggling of their money.

While money market accounts offer the best interest rate features of high yield CDs and savings accounts, they also suffer from a few of the same limitations that plague such higher rate of return bank accounts. Such limitations include a maximum fund transfer limit of 6 ACH electronic transfers per month (may be limited to anywhere from 3-6 ACH’s depending on specific money market account terms), as well as tiered interest rates that often require the account holder to maintain high bank balances to earn the maximum interest rate yield.

While money market accounts are available everyone and can probably be found at your local brick and mortar bank branch or neighborhood credit union, the best money market rates are usually found online. For Internet promotional purposes, many online banks restrict their best money markets to online customers only. Here is an updated list of the best MMA interest rate offers currently available.

List Of The Top High Yield Money Market Account (MMA) Rates

Don’t Confuse Bank-Based Money Market Accounts With Broker-Based Money Market Funds

Money market accounts and money market funds sound similar but they are in fact two different animals altogether. Money market accounts are generally run by banks and credit unions – functioning as FDIC insured deposit accounts that offer a variable interest rate of return. Money market funds on the other hand, are mutual fund investments run by premium and discount online brokerages that invest primarily in short term lower risk assets like U.S. Treasury Bills, bank CDs, short term high grade corporate bonds, and government-sponsored municipal bonds. Unlike bank run money market accounts that are usually fully ensured by FDIC insurance, money market funds are offered by brokers as security investments, and thus do not enjoy the same FDIC protections afforded to traditional bank accounts apart from any temporary governmental guarantee program in effect.

Full FDIC Insurance Protection For Money Market Accounts Up To $250,000

Like other FDIC insured bank products such as CDs and savings accounts, your investment in a money market account is insured by the Federal Deposit Insurance Corporation (FDIC), which protects bank deposit assets in the event of bank failure or catastrophic financial loss. Backed by the full faith and credit of the United States government, FDIC insurance currently offers full protection for accounts held at member banks up to the current FDIC coverage limit of $250,000. With exceptions for different account categories, so long as your total money market account balances remain below $250,000 at any one institution, your entire balance enjoys the maximum protection afforded under the law.

Source URL: Best Money Market Accounts (MMA) and High Yield Bank Rates

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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While WT Direct Bank  and the WT Direct high yield savings account are relatively new creations, they are both the online product extensions of Wilmington Trust FSB, a major financial services corporation publicly traded on the New York Stock Exchange, with more than a century worth of banking experience under its belt. Though the Wilmington Trust parent company is headquartered in Wilmington, Delaware with numerous brick and mortar offices and domestic branches spread throughout major cities in the United States, its new online division of WT Direct is actually based in Baltimore, Maryland. While the actual physical business location of such cyberbanks as WT Direct should be of little concern to most online bank account holders, the fact WT Direct actually has an accessible one and the fact the online company has divisional ties to an established and relatively stable parent bank in Wilmington Trust FSB should offer prospective online customers a more reassuring sense of confidence in this new Internet startup. But of course, before plunking your hard earned money into any deposit institution, it’s important to thoroughly dissect the bank’s features and verify that the company is solidly legitimate.

WT Direct Offers A Competitively High Interest Rate For Higher Deposit Balances

Glancing at WT Direct and the individual features of its high yield savings account offer, it’s clear the bank account caters to account holders looking for a banking option that provides above average customer service attention with the flexibility to manage larger deposits. While the bank has all the traits of your typical online-only Direct bank with its high interest yields, no fees, no minimum balance requirements, and the ability to link up an unlimited number of multiple bank accounts for quick balance transfers, it also provides a complete array of customer service options via e-mail, postal service, fax, and 7 days a week telephone customer support. But as a trade off for the higher level of customer support and online banking attention, the WT Direct high yield savings account calls for a higher deposit balance (compared to other top online banks) to garner the highest interest rate payout.

While it is true that WT Direct does indeed offer a fairly impressively high interest rate yield on its savings account deposits, its interest rate is based on a tiered system. Here is how WT Direct’s interest rate offer works. For the first 2 months (60 days) that a new WT Direct savings account is opened, the account holder will automatically earn the top interest rate on his or her deposits regardless of the balance. While there are absolutely no hidden account fees or minimum balance maintenance penalties to worry about, after the 2 month initial activation period, the interest rate is adjusted according to your account balance. After 60 days, the savings account balance must be above $10,000 in order for the entire balance to continue receiving the top interest rate, otherwise, the rate will drop to .50% APY until the account balance is increased past $10,000. It’s all or nothing after the 60 day trial period – either the entire balance exceeds $10,000 and the entire balance earns the highest interest rate, or it’s below $10,000 and the entire balance earns the lower rate. While this lower interest rate is much lower than WT Direct’s top rate, it probably is still better than that offered by most traditional brick and mortar retail savings accounts at places like Citibank, Bank of America, and Wells Fargo.

Why Open A WTDirect Savings Account?

Perhaps the WT Direct savings account’s greatest feature is its tandem of great bank rates and commendable customer service support. While national interest rates have ebbed and flowed with great fluctuations due to the economy, WT Direct’s top interest rate has historically and consistently ranked in the top 5% of all banks in the U.S., and the hassle free experience and fairly extensive customer support have been well touted by editorial commentators. While the tiered interest rate system of the WT Direct savings account after the initial 2 month trial period may appear as a downside to many smaller deposit holders, the bank account offers numerous benefits, features, and promotional bonus perks that still merit serious consideration.

In my opinion, WT Direct’s 60 day trial period is actually a pretty appropriate way for new account holders to get introduced to the WT Direct high yield savings account and decide for themselves whether they want to remain a customer for the long term. The 2 month trial period affords ample opportunity to slowly fund your way to the $10,000 level to continue enjoying the highest rate after the introductory period. Unlike some other premium savings accounts that require large initial upfront deposits, WTDirect gives you at least 60 days to reach the magical balance of $10,000 or more. Even if you don’t reach that amount for some time, you will still earn interest income until you do, albeit at a lower rate. You can easily add to your account balance online at any time, and in the interim still enjoy all of WT Direct’s other banking perks.

1) No Minimum Balance Requirements, and No Service Or Maintenance Fees

Along with the usual FDIC insurance protection for all bank deposit accounts, WT Direct offers its customers a genuine hassle free banking experience free of hidden fees, extraneous charges, or annoying account minimum penalties. WT Direct Bank also does not require savings account holders to open a new checking account as some other banks do or demand that customers fund their new accounts with a minimum deposit. However, do keep in mind that while there is no minimum balance required to earn the basic interest rate at all times (.50% APY), to get the highest tiered interest rate yield after the expiration of the initial 2 month trial period requires a steady balance in excess of $10,000.

2) Great Customer Support Online and 7 Days A Week Assistance Via Telephone

When I opened my new WT Direct savings account, I immediately received an automatic telephone call from a live WT Direct customer support representative who wished to verify my identity for fraud protection purposes. She was also able to answer a few questions I had about WT Direct such as the type of credit inquiry the company made for new accounts.

A quick browse through WT Direct’s online website reveals a fairly extensive customer and technical support system in place to help and guide new and existing customers through the world of online banking. While savvy banking consumers such as myself will probably be content with just using WT Direct’s secure online customer support messaging system, WT Direct also offers a 7 days a week toll free customer service phone number for those who prefer talking to a live bank employee. While I don’t anticipate utilizing the phone support line too often, I can see how this feature can prove to be an invaluable and extremely convenient feature during a hypothetical banking emergency, particularly in a scenario where the account customer finds him or herself without a working Internet connection.

3) Unlimited External Accounts and Efficient Electronic Fund Transfers

As is the case with opening any new high yield savings account online, there is no need to switch banks completely to take advantage of the high interest rates of WT Direct. By setting and linking up external bank accounts to WT Direct, you can keep accounts at other financial institutions and transfer money between those accounts and WTDirect as needed. By electronically linking bank accounts with your WT Direct account and establishing an electronic funds transfer connection, the link enables transfers between accounts within 3-5 business days. While all high interest savings account fund transfers seem to take a few days to execute (with WT Direct being no exception), WT Direct sets itself apart by offering a nice bonus feature – the ability to continue earning interest income on the transfer amount until and including the day the funds leave the bank. Unlike many other banks that stop paying interest as soon as your transfer request is made, WT Direct continues to pay interest on your transfer amount for as long as possible.

In terms of the maximum number of external accounts you may set up, the nice aspect about WT Direct is that you may link up as many as you like. WT Direct does not limit the number of checking or savings accounts you can link to your WT Direct account, unlike some other financial institutions that may permit only 2 or 3 external accounts such as ING Direct, Emigrant Direct, FNBO Direct, and E-Loan Bank.

4) Easy Online Savings Account Set Up With WT Direct

Like most well run online-only high yield savings accounts, the WT Direct new account opening process is relatively speedy, efficient, and quick. The WT Direct online application form took me less than 10-15 minutes to fill out and submit for approval. Another positive aspect to note is that WT Direct does not perform hard credit checks for new accounts that can potentially hurt your FICO credit score, but rather initiates a simple benign soft credit check – and only for personal identity verification purposes.

Signing up for WT Direct involves the usual online application steps – you will need to provide personal information such as your name, address, phone number, and social security number. You will also need to verify your identity and select a funding source for your new account. The minimum deposit required to open a new WT Direct savings account is just $1.00. Customers can always start with that amount and slowly transfer in additional funds as needed once they get comfortable with using WT Direct.

Those who select an existing checking account as their funding source will need to complete the additional step of verifying ownership of the checking account via a series of automated test deposits to properly link it to the new WTDirect savings account. A few days after you’ve filled out the online application and selected a funding source, two small bank deposits (less than $1.00 each) will be automatically made to the external bank account that you designated to help WT Direct confirm ownership of the account. Once you’ve receive the two small deposits, simply return to WTDirect.com and click on the “Verify Trial Deposits” button, and submit the two amounts for final online account activation and setup. During that period, you will also likely receive an automatic courtesy phone call from a live WT Direct agent to make sure your new account opening experience went smoothly. I did, and it was much appreciated as they answered several pressing questions about WT Direct that I had and alleviated any identity theft or fraud protection concerns I may have had. However, the vast majority of questions can easily be answered by reading WT Direct’s exceptionally thorough online help pages and list of frequently asked questions and responsive answers.

Is Your Savings Account Money Safe and Secure With WT Direct Bank?

Because of WT Direct’s less well known brand name recognition in the marketplace and its less aggressive online marketing approach (compared to popular online banks like ING Direct) and less extensive television advertising presence (compared to bigger names like HSBC Direct and E-Trade), there persists latent concerns about the safety and security of WT Direct online accounts. However, after examining the worrisome rhetoric and comparing them to WT Direct’s actual financial specifics and available rating reviews, I must conclude that WT Direct bank passes the stability test and its financial condition appears otherwise free of the problematic credit loans and worrisome subprime mortgage assets that have doomed other major banks such as Washington Mutual.

As many online readers seem to place much authority into  Bankrate’s proprietary Safe and Sound rating system that assesses the financial strength and stability of various financial institutions in terms of capitalization, asset quality, profitability, and liquidity, it’s worth mentioning that Bankrate has issued a fairly respectable assessment and Safe and Sound review of Wilmington Trust. Currently, Bankrate rates Wilmington Trust as exhibiting a generally satisfactory condition with good asset quality free of toxic assets with strong capitalization and seemingly ample liquidity. As it appears Wilmington Trust Bank and WT Direct did not participate in the whole subprime mortgage lending debacle that has hammered many of the other big name banks in the marketplace, both seem positioned to weather the worldwide economic recession and credit crisis with less hidden risk to account holders.

Full FDIC Insurance Protection Up To $250,000 For All WT Direct Deposit Accounts

In this day and age, FDIC insurance is an absolutely vital and and important must-have when evaluating any high yield savings account option. Backed by the full faith and credit of the United States government, very few other financial guarantees in life are as rock solid. You should never sign up for a new bank account that isn’t fully FDIC insured up to the maximum coverage limit.

Fortunately, WT Direct is fully FDIC insured and a quick browse through the FDIC website reveals that WT Direct is insured and operates under the same FDIC insurance certificate that protects its parent company Wilmington Trust FSB. WT Direct customers who place their deposit savings with WT Direct can rest easy. With some exceptions for different account categories, so long as the deposit holder’s entire combined account balance (checking, savings, and CD accounts) remain below the current FDIC limit of $250,000, the entire aggregate balance is fully protected from any type of catastrophic bank loss or failure.

Extra Information and Resource:

• WT Direct ABA/Routing Number for direct deposits and ACH transfers: 052173464

Source URL: Review Of WT Direct Bank High Interest Online Savings Account

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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ING Direct – Leader Of The Early High Yield Savings Account Movement

One of the very first Internet based financial services firm to enter the U.S. virtual banking market was actually a large Dutch bank based in Amsterdam, Netherlands called Internationale Nederlanden Groep. Today, most of us know the company simply as ING or ING Direct. Arriving onto the scene in 2000 during a time when Internet banking was still a new and developing concept, the branch-less direct bank ING Direct quickly set the stage as the premier trailblazer in a new line of heavily marketed high yield savings accounts. With its aggressive high interest rate promotions and slick marketing ads that enabled the ING Direct brand to go viral with great appeal to early adopters, the company quickly captured a large piece of the online banking pie with its colorfully named Orange Savings Accounts, and cemented itself as the granddaddy of all online savings accounts. With its slick marketing approach and prominent display of the ING Direct trademark orange ball in its advertising, to this day the company continues to successfully draw in new customers seeking the perfect balance of CD-like high interest yields, with the liquidity benefits of ordinary saving accounts.

In step with its innovative online beginnings and willingness to experiment with better ways of providing banking services, ING Direct has even opened up a few ING Direct Cafe chains in the six major cities of Chicago-Illinois, Philadelphia-PA, Los Angeles-CA, New York City-NY, St. Cloud-Minnesota, and Wilmington-Delaware, each serving a unique menu of coffee drinks. Inside each of these novel ING Direct Cafes are internet computer workstations that allow patrons to enjoy freshly brewed coffee while banking online and surfing the web free of charge. The ING Direct Cafes even occasionally feature live seminars on various financial and investment topics such as retirement portfolio management, credit and debt reduction, and home mortgage loan refinancing. While the company has had its share of ups and downs over the years, including a particularly bumping integration phase involving failed virtual bank NetBank, which ING acquired in 2007, the company has managed to stay on track as an oldie but goodie in the ever advancing world of new and better high yield savings accounts.

Why Choose ING Direct Over Other High Interest Checking Or High Yield Savings Accounts?

I’ve had ING Direct as one of my best online banks for many years now. As an aggressive bank rate chaser and someone who has a fairly substantial amount of cash deposited into safe and secure FDIC insured bank accounts, I utilize a strategic number of top rate bank accounts (ING Direct being one of the more prominent ones) to keep myself well under the FDIC insurance coverage limits while earning a good return. While ING Direct’s interest rates have ebbed and flowed over the years and its current rates may not be the absolute highest available, I still like and appreciate the popular online bank’s historical consistency in terms of simplistic features, ample customer support, and lack of any fees or hidden costs.

1) ING Direct Online Accounts Are Uniquely Easy To Use and Manage

Logging into my ING Direct online account, it’s clear the bank was meant for those consumers who wanted a simple, self run high interest deposit account without the hassles or complexities of full service accounts burgeoning with all sorts of unnecessary bells and whistles. The ING Direct account web interface is extremely bare bones and easy to navigate. Take the ING Direct Orange Savings Account for example – after logging into your secure account, you are immediately plainly presented with all the important bank account information you really need – your precise current annual percentage yield (your interest rate), your transaction history and current balance, and a easy to read ongoing tally of the cumulative interest income you’ve earned this month thus far. Furthermore, all of your balances and transactions can be easily downloaded into free Quicken Online, desktop Quicken, or Microsoft Money to help you better track and manage your cash flow habits. Few other online banks offer such simplistic perfection in terms of account interface for the novice and entry level online banker.

2) Ability To Rename Accounts and Set Up Sub-Accounts For Targeted Savings Goals

ING Direct offers a few unique account perks not found in other online banks – one of them being the ability to readily denote and create custom nicknames for individual accounts. The other unique function is the ability to create sub accounts under your primary ING Direct account.

In my case, having a unique readable name for each ING Direct account helps me identify and chart out savings goals via automatic savings plans. Under my primary Orange Savings account with ING Direct, I can create a sub-account named “Emergency Fund” or perhaps another one tagged with the name “Future Plasma TV”. Certainly having actual names for individual accounts means more to most people than simply “account number: #A1234567″, and encourages active saving and better planning. While the new sub bank accounts that you create are regarded as separate savings accounts along with your primary account, because they are all tied to your single customer ID number, they appear viewable as a list on your primary ING Direct account page. Having your savings accounts broken down into listed chunks with custom tags like “Christmas Shopping”, “New Dining Table”, or “Trip to Paris” can greatly help you achieve your targeted savings goals and better manage your money. Best of all, as you save, your money enjoys the quiet benefit of a reasonably high APY interest rate of return.

3) Setting Up An ING Direct CD Ladder Is Very Easy

When it comes to opening a certificate of deposit and setting up a CD ladder to maximize liquidity and CD interest rate of return, ING Direct really shines in this department as it makes the process effortless and straightforward. Once you have your basic ING Direct savings or checking account set up, with just a few keystrokes online, an ING Direct CD ladder can be created easily by selecting the monetary amounts and time period maturities desired.

4) Absolutely No Fees, Maintenance Charges, Account Minimums, Or Inactivity Charges

One of the best features of ING Direct is the fact that there are absolutely no fees, no minimums, and no hidden charges. With other high interest savings accounts, the same cannot be said as some banks have a knack for imposing a tiered interest rate system – offering a lucrative high rate for those with a significant amount of money deposited into a savings account and a much lower rate for those with smaller, modest amounts. With ING Direct, there are no tiered interest rates as everyone enjoys the same equal rate on all deposits at all levels. As indicated on its website, all account holders earn the same high interest rate regardless of their account balance, and no one pays a fee. Thus, you can open your new ING Direct checking or savings account with as little as a single dollar and still enjoy ING Direct’s highest variable APY interest offer.

5) Ability To Earn Extra Money and Referral Income By Referring Friends

Unless you own your own website and run an affiliate publisher business, usually there are very few ways for ordinary bank account customers to earn some extra money on the side by referring new customers (other than the occasional free iPod type promotion). However, ING Direct is an exception and actually provides monetary cash incentives to encourage new customer referrals. Under the ING Direct referral bonus payment plan, the bank will pay existing customers $10 for every new Orange Savings account or Electric Orange checking account customer they recruit. As a promotional incentive, it’s also not just the referring account holder that benefits. All newly recruited customers who open a new ING Direct account utilizing the referral link within the email message generated by the referring customer will also earn a nice $25 welcome bonus deposit as well. Currently the maximum ING Direct referral bonus amount you can earn is $500 due to the referral limits of 25 new Orange Savings accounts and 25 Electric Orange Checking accounts, at $10 each.

6) Enjoy A Competitive Interest Rate On ING Direct Electric Orange Checking and Orange Savings Accounts

The crux of ING Direct’s offerings is comprised of its two primary interest bearing bank accounts:

The ING Direct Orange Savings account features no opening requirements, no account fees, no minimums, and the bonus benefit of a competitively high APY interest rate.

The ING Direct Electric Orange Checking account features high interest checking and free bill pay features. With free bill pay, you can send electronic or paper checks to any individual or company as payment for free. I utilize free online bill pay to automatically pay my monthly rent without having to go through the hassle of licking stamps and remembering to send checks out every month. Access to your Electric Orange checking account funds can be made via the web or with your free ING Direct debit card at any checkout register and at any one of the free ATM machines that comprise the ING Direct ATM network.

While currently ING Direct does not offer the absolute highest variable interest rate for its account deposits, it offers an established history of rates that are at least competitive with what’s offered in the market place, frequently and reliably beating out the pitifully low rates offered by major brick and mortar banking giants like Citibank, Bank of America, and Wells Fargo. Particularly when it comes to interest checking accounts, those desiring something better than a negligible rate should look into an Electric Orange Checking account as an option. Not only can you earn a decent interest return on your idle checking balance with ING, you also get to enjoy free checking account benefits such as free bill pay, free electronic checks, and even free paper checks. If you’re paying for those services at your current bank, you may be wasting your money.

7) ING Direct Bank Safety, Reliability, and Security With Full FDIC Insurance Up To $250,000

As with all FDIC member banks, all checking, savings, and CD deposit accounts are fully protected up to the current full FDIC coverage limit of $250,000, backed by the full faith and credit of the United States government. This type of iron-clad guarantee essentially renders all FDIC insured accounts immune from bank failure or any type of catastrophic financial loss. While there are ways to maximize the FDIC insurance limits beyond $250,000 with joint accounts, as a general rule of thumb, so long as your total individual deposits at ING Direct remain under that amount, you are fully protected against loss. Rest easy.

8) While Remarkably Simplistic, ING Direct Still Offers A Wealth Of Bank and Brokerage Services

While ING Direct’s bread and butter is the Electric Orange Checking account and the Orange Savings account, ING also offers a reasonable wealth of other full service banking amenities:

• Savings (Orange Savings)
• Checking (Electric Orange)
• Certificates of Deposits (Orange Certificate of Deposit)
• Home Mortgage Loans (ING Direct Orange Mortgage)
• Home Equity Line of Credit (Orange Home Equity)
• Stock and Mutual Fund Investing (ING Direct ShareBuilder – one of the best brokers) – features no account minimums and is currently offering a free $50 bonus on new accounts.
• Business Accounts (Business Savings, Business CDs)

When it comes to ING Direct’s online customer service, while not particularly exemplary, the customer service support has generally been on par with that of other online banks. In my experience, ING Direct agents have always responded fairly timely whenever I had a question or pressing technical issue.

9) Opening A New ING Direct Account Online Is Quick And Automated

Those accustomed to the speed and web-only nature of opening up new online bank accounts will find ING Direct to be no different. As the entire application process is conducted via the ING Direct homepage, there is no cumbersome paper work involved, unless you choose to link your funding checking account with your new ING Direct account using a paper check. Otherwise, the entire online driven application process should literally take less than 10 minutes of your time.

As the instruction states, after providing the customary personal information (name, address, social security number) and agreeing to the standard terms and conditions, you will need to complete the process by making an electronic deposit from your existing checking account. But before your new ING Direct savings or ING Direct checking can be funded and electronically linked up to your existing bank account, you will need to verify ownership through a one time deposit test. After submitting your ING Direct application for approval, the system will automatically request that you verify the amounts of two deposits, each less than $1.00 that ING Direct will temporarily deposit into your funding bank account. The deposit itself usually takes 1-3 days to be made but once that happens, you can complete the link verification and finalize the account setup. While you can choose to fund your new account with a paper check, I highly recommend learning to set up online ACH electronic transfer for quick future bank fund transfers. After all, online banking is all about efficiency, speed, and the quest to do away with paper transactions completely.

Extra Information and Resource:

• ING Direct ABA/Routing Number for direct deposits and ACH transfers: 031176110

Source URL: Review Of ING Direct Savings and Electric Orange Checking Accounts

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Until about a year ago, Dollar Savings Direct used to be known as BancoFortuna – Emigrant Savings Bank’s attempt at launching a Spanish language bank to deepen its foothold into the Hispanic and Latino online banking market. Promoting its BancoFortuna.com website and touting a very high annual percentage yield (APY) interest rate on new accounts, Banco Fortuna was intended to appeal to U.S. consumers in the Spanish speaking demographic. After many months, it was ultimately evident and clear that the online bank’s venture into the U.S. Spanish speaking market wasn’t as successful as the bank had planned or hoped. Ultimately, and months into the foray, Emigrant re-branded Banco Fortuna into a new but familiar English based service – establishing a new bank named Dollar Savings Direct. If you visit the old BancoFortuna.com website today, you are automatically redirected to Dollar Savings Direct, confirming the change in marketing approach. While still a relative upstart, Dollar Savings Direct has recently begun to garner some success and much attention with its attractive high interest rate promotions, rates frequently much higher than those offered by the industry’s current top online banks.

Difference Between A Dollar Savings Direct Account Vs. An Emigrant Direct Savings Account

When I first learned the published news that Emigrant Bank was promoting a new high yield savings bank in Dollar Savings Direct, I initially surmised Emigrant was sneakily trying to recruit more savings account deposits and game the market by not having to pay the higher interest rate to their existing Emigrant Direct American Dream Savings Account customers. In the world of consumer marketing, companies and product manufacturers frequently promote identical products in different packaged and advertised forms to appeal to different demographic segments. However, that didn’t appear to be the case with Dollar Savings Direct, as the new bank’s establishment appeared to be due to its previously unproductive foray into the Spanish market rather than a veiled attempt to garner new deposits at a discount.

However, while perhaps it wasn’t Emigrant Bank’s original intent to promote Dollar Savings Direct and Emigrant Direct as mere clones of each other, the end result was that they are essentially that – mirror images of each other. The one thing that new Dollar Savings Direct website visitors and account customers will immediately notice is that in almost every material way, Dollar Savings Direct and Emigrant Direct Bank are nearly identical. Other than a few cosmetic and aesthetic differences between the two in terms of different logos and graphics (such as Dollar Savings Direct featuring Benjamin Franklin as their mascot and Emigrant Direct featuring a red white and blue patriotic top hat), the two banks share nearly identical layouts and color schemes. This obviously shouldn’t come as a surprise to anyone since both Dollar Savings Direct and Emigrant Direct have always been owned and operated as banking divisions by parent company Emigrant Savings Bank, except now Dollar Savings Direct is being brought into the English language fold as well.

While Dollar Savings Direct appears to have all the primary features of Emigrant Direct, there are a few important and key differences with Dollar Savings Direct – namely a much higher APY interest rate for new account customers and a $1,000 minimum balance requirement for the highest APY offer. While there is a $1,000 initial balance requirement to open new accounts, there are no maintenance charges or monthly fees for failing to maintain a certain account balance. A $1,000 minimum balance is required to earn the highest interest rate, but even if your balance falls below $1,000, you still earn interest at 1% APY. While this is noticeably different from Emigrant Direct in that the Emigrant savings account doesn’t require a minimum balance to maintain the highest rate, the Emigrant Direct account offers an interest rate yield that is significantly less than that offered by Dollar Savings Direct. Of course, the one important thing to keep in mind is that all savings account interest rates, whether offered by Dollar Savings Direct, Emigrant Direct, or any of the top online banks in the market, are all variable in nature and therefore subject to periodic increases and decreases as market forces and national interest rates dictate. If you are interested in avoiding the variable nature of bank rate fluctuations, you may want to consider locking yourself into a fixed high CD rate with a certificate of deposit instead.

Can Existing Emigrant Direct Customers Get The New Dollar Savings Direct Interest Rate?

Frankly, I’m a bit perplexed as to why Emigrant chose not to combine Dollar Savings Direct with Emigrant Direct and let all of its aggregate customers enjoy the higher Dollar Savings Direct interest rate without additional effort. But regardless of Emigrant’s reasons for not joining the two nearly identical online banks, current Emigrant Direct savings account customers can certainly reap the interest rate yields of Emigrant’s new Dollar Savings Account. However, while the two banks operate under the same FDIC insurance certificate, they are still considered two separate banks. Thus, as an existing Emigrant customer, you will still need to open a new Dollar Savings Direct account to get the higher interest rate that Dollar Savings Direct is currently offering. Furthermore, since the two banks are regarded as separate financial institutions, to transfer funds between the two high interest savings accounts, you’ll still need to use the services of a third party intermediary checking account.

Despite the hassle of having to open a new account to get the higher rate for what’s apparently a bank clone of what you already have, if you are a current Emigrant Direct customer, you should still do what any smart and savvy bank interest rate chaser would do – open a new Dollar Savings account immediately to snag the interest income benefits of a higher rate. The process of opening a new Dollar Savings Direct online account is actually pretty quick and hassle free. Not only that, since Dollar Savings Direct only performs a soft credit check during the new account opening process, there is also no need to worry about any possible damage to one’s FICO credit score.

Opening A New Dollar Savings Direct Account – No Hidden Fees

The process of opening a new savings account with DollarSavingsDirect is very straightforward and efficiently quick. Simply visit the Dollar Savings Direct application page and follow the directions by filling in the requested information. While the bank account has no minimum balance requirement to earn interest income on deposits, it does require a minimum initial deposit of $1,000 to open a new savings account. So long as you maintain a minimum balance of $1,000, you’ll earn interest income at the highest APY rate offered. If the balance dips below $1,000, you’ll still earn interest, except it’ll be at a lower rate – just 1.00% APY. Otherwise, there are no hidden costs, no fees, no penalties, and no service charges for inactivity. As you are filling out the online application, you will be required to provide the following personal and identifying information:

• Your name, address, birth date, and contact telephone number
• Your Social Security Number (SSN)
• Your driver’s license number
• Electronic funding information (bank’s routing and account numbers)

To finalize the application process once you’ve provided the necessary account information, you’ll need to fund it. Funding your new Dollar Savings Direct account can be made online via an ACH electronic bank transfer from a linked checking or savings account. Before your linked external bank can be used for funding purposes, you’ll need to verify ownership of the account through a series of test trial deposits. Dollar Savings Direct will automatically make two small trial deposits into your funding account, a process which usually takes a few days. Once you’ve received the two test deposits, simply return to your Dollar Savings Account and submit the dollar amounts to complete the initial bank fund transfer and begin banking online. For electronic deposits, Dollar Savings Direct mandates a 5 business day holding period before funds can be withdrawn. Once your Dollar Savings Direct account has been set up with initial funds transferred in, you are free to start banking online via the 24/7 access website. Feel free to transfer funds in and out of your linked up bank account as needed.

Bank Safety, Stability, and FDIC Insurance Coverage Of $250,000

One of the biggest and most serious concerns that many bank consumers have these days when choosing a bank is the ability of the company to stay in business. In this current poor economic climate amidst the shadow of multiple fallen banks, many of us are understandably concerned about the safety and security of our bank accounts in the event of an unpredictable financial catastrophe or bank failure. The high interest rate appeal of high yield savings accounts are alluring, but just how stable and safe are financial institutions like Dollar Savings Direct Bank?

For starters, Dollar Savings Direct is merely an online division of its much larger parent company Emigrant Savings Bank. While for promotional purposes, Dollar Savings Direct and Emigrant Direct seemingly operate independently, they both operate under the same FDIC insurance certificate (FDIC Certificate: 12054). Established during the mid 1800’s, Emigrant Bank is the oldest savings bank in New York City and by some accounts, the largest privately owned bank in the United States. With assets in excess of $14 billion, its primary bank branches thrive in the heavily competitive New York metro area – all traits indicative of an aged and established banking institution.

While certain financial pundits place great weight on a particular banking institution’s ability to garner high ranks on Bankrate.com’s Safe & Sound Ratings or Bauer Financial’s star based rankings, I prefer to recommend a greater attention to FDIC insurance limits instead. Emigrant is a FDIC insured bank and thus its checking, savings, and CD deposit accounts are fully backed by the full faith and credit of the United States government up to the current full FDIC coverage limit of $250,000 for each customer. Both shared Emigrant divisions of DollarSavingsDirect and EmigrantDirect have been fully FDIC insured since the 1930’s. Unless the U.S. government somehow gets annihilated off the face of the planet or winds up in such complete financial disarray that it can no longer sustain its obligations (not very likely), your Dollar Savings Direct funds are safely protected and guaranteed from loss. As a Dollar Savings Direct customer myself with a modest amount sitting in a high yield savings account accruing interest income, I rest easy at night, as I know my deposits are fully secure. However, do keep in mind that because Emigrant Direct and Dollar Savings Direct are online banking divisions of Emigrant Bank that share the same FDIC certificate, any deposits you have at Emigrant Bank, Emigrant Direct, or Dollar Savings Direct are aggregated and FDIC insured up to a single combined limit of $250,000 per depositor.

Extra Information and Resource:

• Dollar Savings Direct ABA/Routing Number for direct deposits and ACH transfers: 226070403

Source URL: Review Of Dollar Savings Direct High Yield Savings Account

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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If you’re searching for a definitive and regularly updated list of the best CD rates currently available in the market, you’ve come to the right place. In the CD rate table below, I’ve compiled a list of the top nationally available certificate of deposit bank offers featuring the highest annual percentage yields (APY). While CD rates and certificate of deposit offers rise and fall with market interest changes, they tend to promote much higher interest rates of return than other forms of bank or credit union deposits, such as high yield savings or money market accounts. The trade off in order to enjoy the higher interest rates that CDs afford, is a certain degree of liquidity and access to your money. When you put your savings in a CD account, the money is momentarily locked up for the duration of an agreed upon fixed CD term period. In exchange, banks are willing to pay you a much higher interest rate for your savings than they’d otherwise compensate you for a regular savings account. Typically for certificate of deposits, the longer the CD term you are willing to lock yourself into, the higher the CD interest rate you will receive in return.

For the sake of brevity, I have chosen to only list the best CD rates for 12 month certificate of deposits. Along with the top CD rates, I have also provided comparative rate offers from popular brick and mortar retail banks as well, since many consumers have a lazy tendency to automatically buy CDs from their local banks or credit unions rather than take the time to conduct a thorough online search for better deals. One thing to note when it comes to CDs is that the best CD rates are rarely offered by large retail banking giants like Citibank, Bank of America, JP Morgan Chase, or even Wells Fargo. Usually it’s the small to medium size, or even online banks that market the best CD rate offers.

Comparison Shop For The Best CD Rates and High Yield Savings Accounts

While I believe the updated CD rate chart below reflects the best CD rates available, I also believe in the importance of thorough price comparisons and digestion of all CD rate reviews and bank rate alternatives. Currently there is a rather highly touted online service that’s growing in popularity called – Lending Club, where consumers can engage in peer to peer lending and potentially qualify for interest rate earnings in excess of 9.60% APY. While not fully protected by the FDIC the way ordinary bank CD’s are, the impressive rates of return of Lending Club are at the very least worth some consideration by CD rate chasers.

List Of The Highest Yield Bank CD Rates For 12 Month Deposits (1 Year)

High Yield CDs and Savings Accounts Are Protected By FDIC Insurance

CDs and certificate of deposits are sought out by savvy investors primarily because of the higher interest rate of return that they offer in comparison to other types of bank account deposits. While investments such as stocks and mutual funds usually offer higher rates of return over the long haul during ideal economic times, during periods of major recession or credit-crisis-induced financial turmoil, the benefits of FDIC insured bank deposits really shine. Bank deposits and CD accounts are fully protected from loss in the event of a catastrophic bank failure by the federal government’s FDIC insurance up to the current individual maximum FDIC coverage limit of $250,000 per bank. Backed by the full faith and credit of the U.S. government, bank savings and CDs offer the maximum amount of financial protection afforded in the market today.

Keep Your CD Deposits Accessible and Liquid By Setting Up A CD Ladder

As is generally the case, the longer you are willing to have your CD investment locked up, the higher the CD interest rate your bank will offer you. When you buy a certificate of deposit through a bank or credit union, you transfer money into a CD savings account for a fixed amount of time and agree not to pull the amount out until the time period matures or expires. In the event of a premature CD withdraw before the term limit is up, there is a hefty penalty fee you must pay to the bank. So long as there’s no early CD pullout though, upon maturation, you are free to withdraw your money out along with the accrued interest and decide whether you want to roll it over into another CD deposit or walk away.

However, the best way to maximize your CD rate of return and ensure a reasonable degree of accessibility to your CD money is to set up a CD ladder. A CD ladder is simply an expense-free investment strategy used to manage CDs that both maximizes liquidity and interest rate (by managing multiple long duration CDs utilizing smaller amounts), and at the same time minimizes risk and the potential drawbacks of freezing up your savings for an extended period of time. The process of laddering CDs requires the bank account holder to initially purchase multiple CD’s with different term limits so that they ultimately mature at fixed regular intervals. By staggering multiple CD deposits so that each individual CD account matures at set intervals, this affords the deposit holder additional liquidity, allowing him or her to take advantage of rising interest rates and still be able to continuously seek out the best banks with the highest CD rates possible.

Source URL: Best CD Rates For High Yield Certificate Of Deposits

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Bigger Is Better – In Terms Of Reputation, Full Service Features, and ATM Branch Convenience

Currently, HSBC is one of the largest banks in the world, if not the largest according to rankings. By some estimates, based on a composite of factors such as sales, profits, assets, and market value, financial publications such as the Economist and Forbes Magazine have actually ranked HSBC Bank Holdings as the world’s  largest banking group and even the world’s #1 company according to size. Such a dominating presence in the banking sector is important because it brings a certain degree of trust and security to those consumers and small businesses who entrust their life savings and investments with the company. While bigger is not always necessarily better, larger banks with a significant history over a longer period of time tend to offer a better indicator of how the bank will continue to run its operations in future years. Certainly amidst the current credit crisis and the ongoing failures of regional banks, having your savings account funds managed by the world’s banking leader (namely HSBC) offers a greater sense of confidence and stability in the financial safety of your precious liquid assets. Bigger banks, and in particular – older banks, offer a historical track record for us as consumers to draw from – allowing us to project whether a bank’s customer service or promotional interest rates are just one time gimmicks, or long lasting offers. In the case of HSBC bank, they’ve proven themselves to be not only a reputable bank with a long storied history, but one that has consistently offered competitive banking features and top interest rates for its customers.

Why Open An HSBC Direct Online Savings Account?

The HSBC Direct online savings account is one of the most popular high yield savings options for consumers in the market today. The bank has recently been touted by financial pundits such as Kiplinger’s Finance as the Best Overall Online Savings Account – praised for its quick customer service, free ATM card feature, $1 minimum balance requirement, and consistently high interest rate.

HSBC Direct’s popularity among customers is primarily because of its instant brand name recognition due its association with parent company, HSBC Bank. While most people have come to know the parent HSBC Bank for its extensive worldwide network of bank branches and ATM locations, the Internet-based HSBC Direct has only recently made a strong global push to become a bigger player in the online banking space. However, since its emergence several years ago at the start of the whole online virtual banking movement, HSBC Direct has developed into one of the best online banks, cementing its status as one of the most popular and consistent big-name marketers of online only savings accounts with very appealing interest rate deals. By promoting an Internet-only high interest savings option, retail banks like HSBC are able to bypass the expensive overhead expenses of maintaining brick and mortar branch locations, and pass on the cost savings to customers in the way of higher interest rate yields. As a quick overview, here are some of HSBC Direct’s most appealing online banking features:

1) Convenient Network Of HSBC Bank Branches and ATM’s – Those pondering which high interest savings bank to go with may want to seriously consider a virtual HSBC Direct savings account. With HSBC Direct, not only do you get the high yield rate perks of an Internet bank, but you get to enjoy the benefits of HSBC’s large worldwide network of bank branches and ATM locations, benefits only found with large banks. While HSBC’s physical banking presence in the United States definitely has more room to grow, it already has a significant entrenched presence in many places in the world, especially in Europe and East Asia. With access to the branch network, HSBC Direct account holders have free access to ATM cash deposits and on-demand withdraws with their free HSBC ATM card, benefits provided after bank account activation upon request.

2) Check Writing Option Available - While HSBC Direct does not offer a checking feature, you are free to open a new HSBC checking account to enjoy HSBC’s regular full service check writing privileges. Once your HSBC checking and HSBC Direct savings accounts are linked up, you are free to transfer balances around quickly and conveniently as your check writing requirements demand.

3) High Yield Interest Rates For Savings Accounts – Perhaps the most prominent reason why you ought to choose HSBC Direct as your primary online savings account is to take advantage of its consistent track record of offering competitive high interest yields for its savings deposits. The HSBC Direct high yield savings account was one of the first Internet-only accounts to promote a very high interest rate, and still remains fairly competitive with other offers to this day.

4) No Set Up Charges, No Monthly Fees, And No Minimum Balance Requirements – HSBC Direct accounts have no monthly fees and no minimum balances, which is what you ought to expect from a top ranked online savings bank. Thus, you can literally deposit just $1 into your new HSBC Direct savings account should you desire without worrying about getting slapped with unexpected maintenance charges.

5) HSBC EasyView – HSBC Direct offers online customers free access to its account aggregation service powered by Yodlee. With HSBC Easy View, you can access all of your online investments, banking accounts, credit cards, mortgages, and loans – and keep tabs on all balances and transactions with just a single password. It’s the online tool that I use to monitor my daily balances and track my net worth updates.

6) Unlimited Linked External Accounts – Certain online savings banks place a limit to the number of linked ACH accounts you may have, however, HSBC Direct places no restrictions on such matters. While you will need to verify account ownership of all new linked accounts via a series of trial deposit tests, you are free to have an unlimited number of linked accounts for easy and relatively quick electronic ACH transfers.

7) Accessible Customer Service – HSBC Direct’s customer service is generally prompt and accessible (ranked by Kiplinger in 2006 as having the best customer service overall among online banks). Because HSBC offers a large network of bank branches, you are free to visit an HSBC location for extra customer service as needed. However, most day to day questions can easily and quickly be handled and resolved via its online messaging service or via its toll free 24 hour, 7 days a week customer service telephone help line (1-800-404-4050).

8) Full FDIC Insurance Coverage – As with all FDIC insurance member banks, HSBC and HSBC Direct account holders receive full FDIC insurance coverage for their checking, savings, and CD deposits up to the full protected limit of $250,000. In an otherwise unstable financial market, many view FDIC insured bank accounts as the safest place to put your money.

Process Of Opening A New HSBC Direct Savings Account

The HSBC Direct new account signup process is pretty typical of most online savings accounts as it’s comprised of a web-based application process and a short waiting game for account paperwork processing. To apply, visit the HSBC Direct online application page to begin. Simply follow the application directions and provide the following identification information:

• Your full name, your Social Security Number(SSN), your driver’s license number, your mailing address, and any other relevant info that is requested.
• You’ll also need to provide your employer’s name and office address when prompted to do so.

For online identity verification, the HSBC Direct online application will also provide you a series of a short multiple choice test questions pertaining to data found on your credit report that only you should know. Such test questions may include the name of your current home mortgage lender or the amount of your monthly student loan payments. Obviously for this portion of the application, HSBC Direct will need to automatically run a credit report check to pull the desired data in order to formulate the appropriate test questions. The credit pull made on your credit report is for identity verification purposes only and not for the purpose of extending credit. For those worried about the potential negative hit on one’s FICO credit score that comes from a bank or lender’s hard credit inquiry – fear not. HSBC Direct only performs a harmless soft credit check during the online application process, and only for identity confirmation purposes. The inquiry will indeed show up on your credit report as a routine credit inquiry, but your FICO credit score will not be negatively impacted in any way.

Thereafter, you will need to provide a funding source for your newly opened HSBC Direct savings account. The vast majority of applicants will likely select the online ACH electronic transfer option for which you’ll need to provide the ABA routing and account numbers of your funding bank. Such routing and account number information can be easily found on the bottom of your bank checks or requested from your bank or credit union. After selecting your desired funding amount (HSBC Direct only requires a minimum of $1), you will need to verify ownership of your newly linked bank account through a series of two trial deposits into the account that you want to fund your HSBC Direct account from. The trial deposits usually take a few days to execute.

While there is no actual paper work that you will need to mail in, once you have provided your identity information and have properly submitted the electronic funding request, you will need to wait a few days for your new account setup information to be manually mailed to you by HSBC Bank via postal service. For security reasons alone, HSBC Direct has chosen to forgo instant online account activation in favor of a final address verification process. Ultimately after a few short days, two letters will be separately mailed to your mailing address, one containing your new customer ID and the second one containing your new account password. After you have both letters, you can begin to bank online by activating your savings account via the HSBC Direct Internet Banking Activation page.

Extra Information and Resource:

• HSBC Direct ABA/Routing Number for direct deposits and ACH transfers: 022000020

Source URL: Review Of HSBC Direct High Yield Online Savings Account Bank

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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