the air

As you may remember, I recently opened an online savings bank account with ING Direct. The biggest advantage of having an online savings account is the high APY. Unlike traditional banks, most online banks offer upwards of 4% APY - compared to a measly 0.5% APY at brick-and-mortar banks.

So how do they do it?

Unlike brick-and-mortar banks, most online banks that offer high-interest rates do not have any physical stores to deal with. You, as a customer, do all your transactions via the web and if need-be, you can call customer service. However, Washington Mutual does offer online savings accounts linked with a traditional checking account. I do know that you can approach a brick-and-mortar WaMu bank to deal with your online account, but I don’t know if there are any extra charges. Since there is extremely little overhead, the feasibility of an online savings bank increases.

All Systems Go

One of the reasons why I signed up with ING Direct was for their speedy system. Although ING Direct does not offer as high an interest rate as iGoBanking - iGoBanking offers 5.30% APY whereas ING Direct offers 4.5% APY - they offer exceptional customer service. I just opened my account this past Monday afternoon and just today, my account is all set to go. I opened it with $50 but I won’t have access to any of those funds for another six business days since ING Direct requires a 10 day holding period for the initial deposit and five business days for all subsequent deposits. Time to start saving!

No Comments » | Random Post