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Review Of E*Trade Bank High Interest Savings and Checking Accounts

Published 12/27/08 (Modified 3/22/11)
By MoneyBlueBook

Review Of E*Trade Bank High Interest Savings and Checking Accounts

When most people think of ETrade, the popular online discount brokerage firm with the cutesy talking baby commercials probably comes to mind. Since 2000, E-Trade has been well known for its slew of strange, but memorably funny TV commercials, starting with its series of odd-ball Superbowl monkey commercials in 1999 and 2000. Who can forget the grand daddy of them all - the one with a monkey dancing a jig on an upside down bucket for a quarter of a minute with two old fellas on rocking chairs clapping away to some goofy Latin beat - followed by the message "Well we just wasted 2 million bucks. What are you doing with your money?" While the message might have been a bit lost in the commercial's zaniness, it certainly was good for future brand name recognition.

Since its days as a leader in the do-it-yourself stock investing movement, E-Trade has grown and developed itself into a full service financial holding company with a wide array of banking and trading related services. Eager to shed and change its old image as merely a low cost discount broker, the company has���� jumped into the online banking business. Hoping to change the public's perception, E-Trade has heavily promoted its rapidly growing online savings and checking products in an attempt to leverage its established reputation as one of the best brokers into a similar position in the online banking market. Despite the presence of formidable competing online banks like ING Direct, HSBC Direct, and FNBO Direct, E-Trade seems to have thrived and undergone quite a transformation. Today, it's not only one of the most popular discount brokers in the market, it's also one of the best online bank options in terms of interest rate and website features.

The Combined E-Trade Savings Bank and Discount Broker Company Offers One-Stop Shopping For All Of Your Banking and Trading Needs

Today, not only can E-Trade customers buy, sell, and trade stocks, options, and mutual funds via its highly sophisticated electronic trading website, ETrade customers can also take advantage of a wealth of lending and bank deposit products like high interest checking, high yield savings accounts, certificate of deposits (CD's), and even E-Trade branded reward credit cards. Because of its strong beginnings and expertise in the brokerage business (voted by SmartMoney as 2008's best discount broker and a top 10 winner according to Barron's 2008 online broker survey), E-Trade has also been able to successfully integrate its online broker and banking business together into a fairly seamless one stop full service financial platform for its customers - an important feature that is lacking and not always available with other online banks.

After much development, Etrade's current banking centerpiece is comprised of two primary high interest bearing banking products:

ETrade Bank Offers High Interest Rates, and Fast Electronic Fund Transfers Between Banks, Brokers, and External Accounts

One of the combined E-Trade company's most attractive key features is its consistently high interest rate offers. While the company does have a few banking and brokerage branches scattered throughout numerous states in the United States, E-Trade has always been primarily an online institution. Because of its website presence and ability to maintain substantially lower overhead costs compared to most traditional banks with regular branches, E-Trade has been able to pass on the cost savings to its customers in the way of consistently high annual percentage yields (APY) on its line up of checking deposits and savings accounts.

E-Trade Bank's other strong feature is its well known ability to offer fast transfers. ETrade currently features on its online website the Free Quick Transfer service, an improved way for customers to make one click electronic fund transfers from one linked account to another without having to go through numerous pages of clicks. Electronic transfers between Etrade bank and Etrade broker accounts are instantaneous (a great advantage for those that use Etrade for both banking and stock trading). Banking customers also have the ability to link up all of their online financial accounts with their E-Trade platform, and transfer money around quickly as needed via ACH transfers at a comparatively rapid speed.

Opening and Funding An E-Trade Banking Account Is Quick and Easy, and Involves Only A Harmless Soft Credit Check

ETrade Bank offers a quick account opening process with minimal paperwork. Other than the nice welcome package you'll receive via snail mail after getting your accounts approved, everything is done online. After clicking through the online application for your desired checking or savings account option, you'll be required to verify your identity through a soft credit pull that is performed on your credit report. Fear not, the credit check is a soft inquiry for ID purposes and has no negative effect on your FICO credit score.

1) E-Trade Max Rate Complete Savings Account

After taking a look the interest rate offers promoted by other banks, I do not doubt E-Trade's marketing claim that the APY interest rates of its Complete Savings Account has consistently stayed more than 8 times the national average APY for savings accounts. Its interest rate levels have indeed consistently remained one of the best deals out there for those seeking the best rate of return for their conservative assets. It is also interesting to note that the E-Trade Complete Savings Account has no account fees, no maintenance charges, and no minimum balance requirement to earn interest. The initial deposit requirement is only $1, something I think most of us can easily afford. All savings (and checking) deposits are also fully FDIC insured, up to the current federal coverage limit of $250,000.

2) E-Trade Max Rate Checking Account

As E-trade aptly puts it, the online bank's Max Rate Checking Account is checking on steroids - due to its overabundance of account benefits. You can apply for the standard checking option, but if you want the most bang for your checking buck, you should select the Max Rate Checking offer when applying. Not only does its checking account offer a notable interest rate on checking deposits (something almost unheard of among most traditional brick and mortar banks like Bank of America or Citibank), its Max Rate Checking APY is more than 10 times the national average according to Etrade sources.

Its checking account perks include no ATM fees at any machine, at any bank, or anywhere nationwide, via (get this) unlimited ATM fee refunds. Max Rate Checking customers also receive unlimited check writing privileges, online check deposit images (so you don't have to fumble with canceled paper checks), payment alerts, and free online bill pay reporting services. Free quick one click electronic transfers among verified and linked external financial accounts are offered as well.

While all checking deposits will earn the standard interest rate regardless of how much you have deposited, to receive the highest interest rate level requires a minimum balance of $5,000. A minimum checking balance of $5,000 is required to bypass the monthly $15 fee, but there are many ways to have this minimum balance requirement waived. By signing up for direct deposit of at least $200 a month, linking up your ETrade discount broker account with your bank accounts to maintain at least a totalof $50,000, or executing at least 30 stock trades per quarter, you can avoid the hassles of checking account minimums (which is how I personally have my monthly fee automatically waived every month with E-Trade).

Extra Information and Resource:

  • ETrade ABA/Routing Number for direct deposits and ACH transfers: 256072691

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9 Responses to “Review Of E*Trade Bank High Interest Savings and Checking Accounts” 

  1. Junior says:

    Had absolutely no idea E*trade was so diverse. Thanks for the heads up.

  2. Chrissie says:

    I like Etrade Bank so far...they have provided me decent service with a beautiful online banking and trading interface. I especially like using these one stop shopping all in one banks/brokers. I hate spreading my accounts over the place and like their integrated nature. E-Trade has a pretty great 100 trade commission free promotional offer going on right now with their IRA accounts. Thought you'd like the heads up

  3. Desman says:

    Currently, I have an Ing Direct account (CDs and Savings), Scottrade (Stocks), Citi (Credit Card) and Chase (Checking and Savings). Now that I opened an ETrade account last month, I plan on canceling all other accounts because ETrade can do it all. Their credit card has the same no annual fee and rewards as my Citi credit card, the CD rates are comparable to ING Direct, commission is similar to Scottrade (plus I get 100 free) and the interest rates on the savings and checking accounts blow Chase out of the water. I'm happy to be able to logon to one website to keep track of all my financial information.

  4. Raymond says:

    Amen to that Desman,

    I love the convenience that all-in-one broker/banks like Etrade can offer. Being able to pull up a single online account and access your credit cards, bank checking, bank savings, CD deposits, and brokerage investments from a single source is a huge, huge plus in my book. The most aggressive of interest rate chasers will probably prefer to run multiple financial accounts to go after the best rate offers available, but the majority of us will probably be content with the convenience that one stop shopping provides.

  5. Pilm says:

    I've had E-Trade for several years now and agree they have a good setup for their brokerage and bank platforms. And for awhile their bank rates were quite competitive with high yield online banks, but that has changed now, so their rates are among the poorest around. But on the positive side, they allow me to transfer money to and from any of my other linked online accounts for free (I have almost a dozen links). And when I'm ready to toss money into the market, transfers from my E-trade bank to brokerage account are instant, so I can invest funds in the market from my bank account in a matter of minutes. They also have a good bond investment section. The one thing they do not have is after hour trading, which on occasion would be nice.

  6. steve says:

    I'm happy you've had good experiences, but I have been frustrated by excessive eTrade fees and I finally closed my account. Guess what - I was charged an additional $10 to get a check! A wire transfer would have been more. Does any other brokerage charge you to close your account?

    If you are an active trader, eTrade may be fine. If you prefer to make and hold investments, watch out for all the hidden eTrade fees. They'll add up to more than $100 a year.

  7. LAX says:

    I have had eTrade for years and really like the ability to use it as my central cash portal. Being able to transfer funds to/from all my other bank accounts is convenient since I do occasionally chase a promotional interest rate. As someone mentioned above, they used to be competitive with internet banks for checking & savings rates, but not anymore.

    Also, someone above incorrectly stated they don't offer after-hours trading - in fact, they do. A supplemental on-line application is required that approves immediately and provides access to after-hours trading.

  8. Tiffani says:

    I'm getting really competitive rates with a product called easyGROW Checking at First Bank & Trust. You can go to easyGROWchecking.com for the info (including the current interest rate); but to summarize, it is a free high-yield account that also offers ATM fee refunds when I meet the three qualifications: using my debit card at least ten times, receiving e-Statements, and having a least one direct deposit or automatic payment each cycle. I do all of those things anyway, so it's been really easy for me to qualify…and they send me an email each month to let me know if I met the qualifications. I have to admit, I love not having to worry about whether or not an ATM is on my network, and the interest is already starting to add up. It only takes $100 deposit to open the account, and there is no minimum balance.

  9. Lourdes Geronimo says:

    I just opened a discount broker acct with ya last night (Acct# 63650464)

    I am waiting for the approval of my app. When approved, can you transfer

    my personal info to allow me to open a MAXRate Checking account w/ ya;

    and can I use the same User ID & password ? or, Do I have to set up a

    different one.....Thank you for your help !

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