E*Trade Complete Savings Account now 3.30% APY

For the second time in less than two months, E*Trade Financial decided to make its Complete Savings Account competitive by increasing its interest rate from 3.15% APY to 3.30% APY, starting July 2, 2008. It made a similar rate adjustment in early May.

Though the news in encouraging (increasing rates), the rate is still not as good as the rates from banks I am currently using, such as Capital One and FNBO Direct. Therefore, I don’t think I will make any change on the way I am using those banks now. For better bank deals, check out my interest rates table.

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Check Out These Related Articles:

• E*Trade Raise Rates on Complete Savings Account: Interest Rates Bottomed?
• $25 Bounus When Opening an E-Trade Complete Savings Account
• ING Orange Savings Account $25 Bonus
• FNBO Direct Followed Suit, Up Interest Rate
• Free Trade And Dividend Reinvestment From Zecco

WT Direct Increases Interest Rate to 3.26% APY

WT Direct became the latest online bank to increase the interest rate of its online savings, following similar move early from E-Trade, HSBC Direct, and FNBO Direct.

The increase is 0.10%, from 3.16% to 3.26% APY with a minimum requirement of $1o,000. After 60 days if the minimum balance is below $10,000, then the interest rate is 0.50% APY. I looked at WT Direct a year ago and determined that this isn’t the bank I want, not just because of the high balance requirement, which isn’t a problem now, but more of its two-tier rates. $9,999 at 0.50% APY? No thanks!

If you are looking for good offers, check out my interest rates table. There are many better deals

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Check Out These Related Articles:

• HSBC Dropped Rate for Online Savings Account
• ING Direct Lowered Interest Rates
• HSBC Direct Bumps Up Rate, Temporarily
• FNBO Direct Followed Suit, Up Interest Rate
• 4-Week T-Bill Rate Tumbled

FNBO Direct Followed Suit, Up Interest Rate

After having been cut rates continuously since last September when the Federal Reserve began the current rate reduction campaign, some banks seem to start to reverse course in order to compete for our money even when the Fed is idle.

Since April, E-Trade Financial and HSBC Direct each bumped up the interest rate of their savings account. Today, FNBO Direct followed suit, announcing that it has increased the yield of their online savings account from 3.25% APY to 3.50% APY.

Unfortunately, even with three banks so far decided to increase rates, this didn’t make a trend. In fact, when I checked those banks listed in my interest rate table, I found that quite a few banks kept slashing rates. And what bothers me the most is that my newest bank, Capital One, also dropped their rate from 3.75% APY to 3.50% Right after I posted that I opened a Capital One Online Savings Account, I got this comment from Tom:

Capital One does offer great rates but I find them to be too inconsistent. One week they will have high rates and a month later, they don’t even rank in the top ten. Go figure.

Well, it doesn’t take me long to figure out what “too inconsistent” means in this case. And it also makes me think whether my rate chasing is worth it or not. I have opened one bank account after another, hoping to get the most of my money. In the end, looks like everybody is the same. All the rate chasing is just a waste of time.

To “punish” Captial One for dropping their rate, I will move my money from the new Capital One account to FNBO Direct. See, there’s still one “benefit” of having some many bank accounts: I can move my money around at any time

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Check Out These Related Articles:

• HSBC Dropped Rate for Online Savings Account
• WT Direct Increases Interest Rate to 3.26% APY
• Random News: FNBO Direct’s New BillPay Account and IGoBanking Transfer Limit
• Latest Online Bank Savings & Checking Rates
• Online Bank Savings & Check Interest Rates

HSBC Direct Bumps Up Rate, Temporarily

I almost forgot I still have a HSBC Direct account until I received an email notice this Monday from HSBC regarding the change of their HSBC Direct Online Savings Account rate. The new rate, effective June 2, is 3.50% APY with no minimum balance requirement (well, technically you do have to have at least $1 in your account to earn interests).

While the new rate is much better than their previous rate at 3.05% APY, which is in the lower half of my latest online bank interest rates table, the offer is only good for about two months, till August 15. After the promotional period, the rate will be determined by the market condition at that time, whatever that will be. For sometime, HSBC, like Emigrant Direct and ING Direct, was a leader in online savings offering, but these “old” direct banks all faded away lately. E-Trade Financial also did a rate increase last month, but at a much smaller pace.

When HSBC had their last promotion more than a year ago, I did jump in to take advantage of the 6.0% APY offer, but not this time. I just got my brand new Capital One Online Savings Account with a superior rate. Unless somebody offers a 4.00% APY, I am not going to move my money

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Check Out These Related Articles:

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• HSBC Dropped Rate for Online Savings Account
• HSBC Introduces New Online Payment Account
• WT Direct Increases Interest Rate to 3.26% APY
• HSBC $75 Checking Account Sign on Bonus

Capital One Online Savings Account Opened

I have been considering getting a new online savings account with a better rate for quite a while. The banks I am using right now (IGoBanking and FNBO Direct) are OK, but their rates are not as competitive as they used to be. After looking around and evaluating potential candidates such as Countrywide Bank, Provident Direct, and Capital One, I eventually decided to open an new savings account with Capital One. Though I never had any good impression with Capital One’s credit cards, the 3.75% APY of their Online Savings Account is pretty impressive (check out the latest interest rates). Besides, Capital One recently opened a branch office not far away from where I live. So that’s another plus. Countrywide Bank offers a slightly higher rate (3.80% APY), but that bank faces some uncertainties due to the pending Bank of America purchase. Since I already have my checking account with BoA and our mortgage loan with Countrywide, I don’t want to have another one with them.

Account Opening Process

Opening a Capital One Online Savings Account is quite easy, taking about 10 minutes with information that is required by any financial institution: personal information (no employment information required though), identity verification, and account funding method. For verifying the identity, Capital One asked some questions and

The questions are based on information from an external credit reporting agency. Rest assured that your answers will not affect your credit score in any way.

While, as the above statement says, the answers themselves will not affect my credit score, it isn’t clear whether Capital One conducts hard pull or soft pull. On their disclosure page, they does state that

For your protection, you agree that we may order a consumer credit report on you from a credit reporting agency. Upon your request, we will inform you of whether or not a credit report was requested and, if so, the name and address of each agency that provided this report.

It looks like I have to ask them to find out.

Fund the Account

At the end of the account opening process, I was asked how I want to make the initial funding of the account. I chose to link my BoA checking account to the new account. Before the external link is established, Capital One uses trial deposits to verify the account ownership, and it’s pretty fast. I opened the account last night and tonight the two trail deposits already appeared in my BoA account.

According to Capital One, I can link multiple external accounts to my Capital One account and transfer funds vis ACH between. However, each linked external account needs to be verified (use trial deposits) separately. And since this is a savings account, there’s a 6-withdraw per month limit.

Fund Availability

Like any ACH fund transfer, deposits made by external accounts via ACH take times to show up in Capital One account. It could take up to four days before the fund shows up in the account and another day or two before the fund become available. For example, if the fund transfer is made on Monday, then the money won’t be credited to the Capital One account until Thursday.

During the first 30 days following initial account funding, funds deposited into your account will be held for ten business days (available to you on the eleventh business day) after the day we receive and process the deposit. For accounts opened and funded older than 30 days, funds deposited into your account will be held for five business days (available to you on the sixth business day) after the day we receive and process the deposit. If you change the external account linked to this account, funds deposited into your account will be held for five business days (available to you on the sixth business day) after the day we receive and process the deposit.

Others

This morning I got an email from Capital One, saying that my new “Money Market Account or Certificate of Deposit Account” is now available. But what I opened is an Online Savings Account, not a MMA or CD. So I called them to make sure there’s no mistake or anything because their Money Market Account only pays 3.00% APY. What they told me was that the account I opened was indeed Online Savings Account, which is also a MMA. In addition to the name and rate difference, the MMA also offers ATM card and check-writing ability, but not for the OSA.

To earn the 3.75% APY, the minimum account balance for an OSA is $10,000. In the past, I usually stayed away from accounts that require high minimum balance to earn interest. But since the account balance at IGoBanking is well above this level, the high balance requirement isn’t really a big problem. Even if the balance is below the $10,000 mark, there’s no fees or anything and the money can still earn a 2.75% APY. And there’s no additional costs for lower balance, which is also a big plus.

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Check Out These Related Articles:

• FNBO Direct Followed Suit, Up Interest Rate
• HSBC Direct Bumps Up Rate, Temporarily
• Considering Another Bank Account
• Some Bonus Offers from Citibank, FNBO Direct, and UPromise
• Couldn’t Resist, Opened a FNBO Direct Account

Online Bank Savings & Check Interest Rates

It has been more than four months since I last updated my little interest rates table. During this four-month period, the rate picture of online banks has changed a lot, going down 5% something to mostly in the neighbourhood of 3% APY, as the Fed cut interest rates every time they met. However, the latest reduction of a quarter of a percentage point at the end of last month could be the last one by the Fed in the current round of rate cut. And because of the relatively small cut (only 0.25%), no bank, as far as I know, has followed suit. One bank, E-Trade Financial, even raised the rate on their Complete Savings Account a couple of days ago. So I feel it’s time to take a look at where everybody stands on the rate ladder.

Last update: June 9, 2008

Two clear winners are Provident Direct and Capital One Online Savings at 3.75% APY, both have been covered here before. The banks I am currently using, IGoBanking and FNBO Direct, aren’t far behind. I have been considering getting another account with a better rate for some time, but haven’t made the move before with less than 0.50% difference, it may not worth it. However, I didn’t totally give up the idea. If I do make the move, Capital One will likely to be my choice because Provident Direct has too many restrictions. I want something simple without a lot of limits and fees.

Any other better deal out there?

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Check Out These Related Articles:

• WT Direct Increases Interest Rate to 3.26% APY
• E*Trade Complete Savings Account now 3.30% APY
• E*Trade Raise Rates on Complete Savings Account: Interest Rates Bottomed?
• FNBO Direct Followed Suit, Up Interest Rate
• ING Direct Lowered Interest Rates

E*Trade Raise Rates on Complete Savings Account: Interest Rates Bottomed?

In a sign that interest rates may stop falling and start rising, E*Trade Financial sent me an email this afternoon with a surprising update: Start May 8, they will increase the interest rate of their Complete Savings Account from the current 3.01% APY to 3.15% APY, though the Fed has cut interest rates by another 0.25% point last week.

Another interesting observation is that, in the past every time after the Fed cut rates, banks followed almost immediately to slash interest rates on their savings accounts and my Inbox was flooded with rate update emails. Not this time, though. Actually, I didn’t get any such email from banks since last Wednesday. I guess the banks must have enough cushion after dramatically lowering their rates since last September so they can afford to stay where they are now

I haven’t updated my checking and savings rates table since last December. Since it looks like the Feb will idle when they meet next time in June, maybe it’s time to revise my table.

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Check Out These Related Articles:

• E*Trade Complete Savings Account now 3.30% APY
• FNBO Direct Followed Suit, Up Interest Rate
• ING Direct Lowered Interest Rates
• Online Bank Savings & Check Interest Rates
• $25 Bounus When Opening an E-Trade Complete Savings Account

Looking for High-Yield Savings Account? Provident Direct could be an Answer

Not long ago, you can easily find an online bank that pay above 5% APY for your money. For example, from my last rate update at the end of 2007 (I didn’t update the list since them because banks kept lowering their rates even , you could get a 5.12% APY from UFB Direct or 5.05% from E-Trade. However, things changed a lot after the Fed’s 1.25% rate in January. Even when the Fed didn’t make any move between meetings, banks kept dropping rates to the current level around middle or low 3.00% APY.

Then last week on Fatwallet.com, there was a thread discussing a bank called Provident Direct, which currently pays 4.50% APY and that got my attention as I am still looking for a bank that offers better than the 3.86% APY from IGoBanking.

Provident Direct is the online division of Provident Bank (member of FDIC since 1943) a regional commercial bank that headquarters in Maryland with $6.5 billion in assets. The offers from Provident Direct include both high-yield savings and CDs. The high-yield savings account currently has an interest rate of 4.50% APY with $1 minimum.

According to the discussion on Fatwallet.com, the main concern of this bank is the $5,000/transfer limit on outgoing fund transfers. Though multiple withdrawals can be made in one day, as any other savings accounts, a total of 6 monthly transfers/withdrawals is allowed for this high-yield savings account. This means a total of $30,000 can be transferred out of the account every month. This amount is generally enough, but a little bit low if, for example, you deposit a large amount from 0% APR balance transfer. If the number of withdrawals exceed the monthly limit, the bank can reject the request or impose a fee of $5 per occurance.
Other fees include:

• $5 monthly fee for balance below $300;
• $25 fee for closing the account within 180 days;
• $10 annual inactive account fee for balance less or equal to $50; $20 if balance greater than $50.

Provident Direct supports ACH fund transfer and from what I read so far, there’s no hard credit check for opening a new account.

I may consider using this bank if its rate doesn’t drop too much after the Feb’s expected rate cut tomorrow.

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• HSBC Dropped Rate for Online Savings Account
• Online Bank Savings & Check Interest Rates

RevolutionMoneyExchange Review Plus $25+$5 Bonus

When I wrote about the RevolutionCard back in last September, I didn’t pay much attention to the other product, RevolutionMoneyExchange, from the same company. The reason for me not feel excited by the new product was 1) I didn’t use a lot person-to-person fund transfer and 2) I already have a Paypal account which is much more popular than RevolutionMoneyExchange and it’s market leading position is unlikely to be threatened by the newcomer.

Early last week, I received an email from RevolutionMoneyExchange, inviting me to join their program with a $25 sign-up bonus. The incentive was there when I first knew the product half a year ago, so I decided to give it a try and take the free money

How it works

If you use Paypal, then RevolutionMoneyExchange (RME) isn’t of much difference in the way it works. Basically, it allows account holders to send and receive money (money exchange) fast and securely. So to use the service, the parties have to have RME accounts. Like Paypal which serves as a tool for merchants to make and receive payments, RME also claims that it provides tools for online sellers. However, I didn’t notice any such function from my account. I feel that RME’s primary function is to exchange money between members and most of its services, such as send and receive money are free of charge (fee schedule).

Account opening process

Opening a MoneyExchange account is easy, taking only a couple of minutes to complete.

While most information required during the sign-up process is standard, I did hesitate a little bit when I was asked to provide my social security number. According to the website, the reason for asking SSN and DoB is

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask for other identifying documents.

I don’t remember whether I was asked for such information when signing up with Paypal, but it’s required with RME. If you feel uncomfortable giving away your personal information to a website that you are not familiar with, you can always stop here and cancel the process.

Interface

RME’s main interface is quite straightforward, without many fancy features, which I think is appropriate to perform the simple function of sending and receiving money. All the three major functions, send, add, and get money, are centered in the account overview page with huge buttons to provide easy access.

In order to send or withdraw money, the RME account must be connected a bank account. RME supports ACH transfer and the connected external bank account needs to be verified before any deposit or withdrawal can be made. The easies account ownership verification is online verification: RME makes to small deposits (in cents) to the linked bank account and after the deposits are made, account owner needs to enter the deposit amount in the RME account. The trail deposits showed up in my bank account the next day after I signed up and the verification was completed immediately after I correctly entered the amounts from the two trail deposits.

Send money

Just like sending money in Paypal, money is also sent between MoneyExchange members via email in RME. I tested the Send Money function by sending the bonus to myself. Before the request can be processed, I have to enter a security PIN that was established when I opened the account. That’s a feature that Paypal doesn’t have.

An email notification was sent to me after I submitted my request. In order to receive the fund, however, the recipient also has to have a RME account. What if the person doesn’t have an account? Then there’s no way for him/her to get the money and if the money is not claimed within 30 days, the request will be canceled.

If I want to withdraw fund from my own account, I can do it using ACH to send the money right to my own bank account. According to RME, that process can take 2-3 business days, which is quite normal. If I want to have a check mailed to me instead, then it will cost me $2.50.

Anything revolutionary?

Not really, from my limited experience with RME. It functions similar to Paypal, but isn’t as comprehensive. In fact, I failed to notice any unique feature that makes the new product stands out. While RME claims that it provides cost-efficient ways to online business owners to do business on the internet, no details of how business owners will be charged for using their service is currently available on their website. Given all of these, I wonder how it will compete against Paypal.

$25+5 signup bonus 

RME is currently running a promotion  which offers $25 signup bonus. In addition,  it also has a referral program which gives $10 for every new account opened through the referral program. If you are interested in getting an account and want to get $5 more signup bonus, send me an email using the contact form to request a referral link. I’d happy to refer you and split with you the $10 RME pays me

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• Make Hundreds of Dollars by Referring People
• Referral

Savings on Autopilot: Increasing the Auto-Transfer Amount

I have been automatically transferring a certain amount of money from our checking account to savings account on payday for quite a while. At first, $300 was moved every two weeks from our checking account at Bank of America to savings account at Emigrant Direct as part of our “pay ourselves first” strategy in order to save a little more without any intervention from us. With the scheduled transfer, we make sure that saving is always ahead of spending.

Later on when I switched from Emigrant Direct to FNBO Direct, I increased the bi-weekly auto-transfer amount from $300 to $400 last July. The increased limit had no noticeable impact on our spending for the past half year and we almost made no withdraw from savings account to meet our daily needs.

Last night, after reviewing interest rates of our two main banks, FNBO Direct and IGoBanking, I decided it’s time to make IGoBanking our default savings account because IGoBanking’s interest rate of 3.90% APY is slightly better than FNBO’s 3.85%. At the same time, I also re-directed the auto-transfer from FNBO to IGoBnaking. Since I had to delete the scheduled transfer at FNBO and create a new one at IGoBanking, an idea occurred to me as I was entering the transfer amount: “Why not transfer $500 every two weeks instead?”

Yes, why not? Having to create a new schedule is an excellent opportunity to increase the auto-transfer amount because the autopilot strategy means “set and forget” and I indeed always set and forget. So I entered $500.

Will it make a difference this time? I don’t know. If it does, we can always go back to what has worked for us. If it doesn’t, then we just save $200 more every month without having to make any hard choice

*Photo from aeronorthwest.com

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• Weekend Linkage - November 11, 2007
• E*Trade Complete Savings Account now 3.30% APY
• Citi Removes Caps on Balance Transfer Fees

Are You Using Direct Deposit?

I am and I can’t think of any reason why not using it as long as I have a bank account. It’s safe (I don’t have to worry about losing the check) and it’s fast (there’s no delay for the money to show up in my account). However, it appears that not everybody is using the convenient service. As a matter of fact, nearly one third of Americans don’t use it, according a survey sponsored by Treasury Department’s Go Direct:

Americans say direct deposit tops both ATM cards and checkbooks as their most important tool for managing personal finances. Yet approximately one in three Americans still do not use direct deposit, including nearly 10.5 million Social Security recipients, despite the widespread opinion that direct deposit is reliable and safe.

So why one out of three respondents doesn’t use direct deposit? It’s not because they don’t have bank accounts. It’s because their employers just don’t offer it! Well, I am glad my employers provided direct deposit to make my life easier.

While direct deposit, as the survey indicated, is one of the most favorable tools, there are far many people don’t like the idea of banking online. For me, I don’t think I can live without online banking now. It’s my tool for paying bills and transferring funds and save me both money and time. I can’t image what it would look like if I have to go back to the old days when everything was done with paper checks. Then, the idea of online banking isn’t so popular. According to the same survey, only 32% think online banking is a very important financial tool. This somehow is understandable, given the degree people worry about the safety of their identities.

How important do you think online banking is?

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• Hurry! ING Direct $50 Bonus for New Account Before 09/30/07 [Expired]
• Considering Another Bank Account

Latest Online Bank Savings & Checking Rates

After the latest rate cut by the Federal Reserve early this month, we are seeing many banks followed suit in the past by lowering the interest rates of the online savings accounts. As of today, UFB Direct offers the highest savings rate at 5.22% APY among banks I tracked.

I have thought about getting a new online bank account to replace IGoBanking and AmTrust was target after the first two rounds of rate reduction. However, now I am having a second thought on whether it is worthy it. As shown in the above table, the difference between AmTrust and FNBO Direct, currently my primary online bank which holds its rate steady since November, is only 0.06%. It’s too small a difference to go through the trouble of getting another account. Of course, it’s unclear whether FNBO can keep its rate at current level, especially when there’s a high possibility of another rate cut at the Fed’s next meeting. It’s probably better to wait until things are little clearer to decide what to do next. No doubt about it’s getting tough now to chase rate when the it keeps falling.

UFB Direct’s 5.12% APY looks good. Too bad they don’t even offer ACH. I wonder who else nowadays is still asking you to mail in a check to make a deposit.

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• Random News: Tax Rebate Check, $900 Gold, and Falling Interest Rates
• $25 ING Direct Bonus Reference Code and More [Ongoing]

Random News: FNBO Direct’s New BillPay Account and IGoBanking Transfer Limit

FNBO Direct recently introduces a new savings tool, FNBO Direct BillPay Account, which is more like an interest checking account (except no check-writing ability). The product currently is only available to existing Savings account members and it pays 3.50% APY. Other features of the new account include:

• No minimum balance required and no fee;
• FDIC insurance;
• Interest compounded and credited monthly;
• BillPay payment limits between $5 and $10,000.

I have moved all my deposit from IGoBanking to FNBO Direct after IGoBanking lowered its rate to 5.00% APY, less then FNBO’s 5.05%. I also canceled the bi-weekly transfer of $300 from my checking account at Bank of America to IGoBanking and redirected the recurring transfer to FNBO Direct instead.

I am planning to get ride of IGoBanking and currently searching for a replacement. One of my targets is AmTrust Direct, which currently pays 5.26% APY for its e-Savings account. The rate is quite appealing and the account supports ACH transfer (UFB Direct, which is another possibility, doesn’t support ACH). Now I only need to decide whether I want to go through the process.

Last night when I logged into my IGoBanking account, I noticed that the bank has increased the account transfer out limit in a rolling 30-day period to $50,000. It used to be $25,000, which is one that I complained most about.

Too bad I am leaving.

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• IGoBanking Account Fully Functional
• Some Bonus Offers from Citibank, FNBO Direct, and UPromise
• More on UFB, GMAC, AmTrust, and IGoBanking

Update: 4-Week T-bill Rates and Savings & Checking Accounts

While I don’t use 4-week T-bills as a short-term saving vehicle any more, I still keep an eye on the rate changes, though I don’t expect the rate to become competitive any time soon after the sharp drop in September, especially after two consecutive rate cuts.

The latest 4-week T-bill rate is at 4.008% APR. That’s equivalent to a 4.36% APY for New Jersey residents, putting it slightly above ING Direct after the bank lowered its rate again immediately after last week’s rate cut.

Speaking of rate reduction, an array of online banks have followed suit to lower their interest rates in the past week. The following is a updated table of what the online banks are offering right now, sorted by the savings APY (restrictions on some banks’ products can be found in my previous post). (Last updated 11/30/2007)

Now that IGoBanking falls behind in the rate game, I am thinking maybe it’s time to move on. AmTrust and UFB do look attractive with 5.30+% APY (hope they can keep the rates). I considered these two banks before when I was looking for a better bank than Emigrant Direct and HSBC, but eventually chose IGoBanking. Maybe I need to pick it up again. Of course, if I get another account, I will need to close IGoBanking or FNBO Direct or both so the number of accounts I own won’t keep going up.

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• 2006 4-Week T-Bill Rates

Are You a Rate Chaser?

Though I have multiple online savings accounts and often move money around to get the best deal, I don’t consider myself a real rate chaser. Rate chasers, according to the definition in a NY Times article, are savers

who hunt for the best interest rates at banks and credit unions and quickly move their cash from one account to another.

I want to get the most out of my money, but I didn’t go after each and every bank that pays the highest rate. I only open an account when the promotion rate is significantly higher and the promotion period is meaningfully long. In addition, in order to make a profit, I will need a substantial amount of money at hand to play the game. These are the reasons I opened an account at FNBO Direct early this year when they offered a 6.00% APY promotional rate for six months. With nearly $100,000 deposit, all borrowed from credit cards with 0% APR offers, I was able to collect about $500 a month in interests. At the end of September when the promotion ended, I have earned more than $1,600 from FNBO alone. What could be better than making money from money borrowed for free? Right now, I have my money at IGoBanking which pays 5.17% APY (check out the complete list of online bank offers). Though there are CDs out there with higher rates, I like the flexibility of an online savings account.

The reason for rate chasing is of course for preserving and growing the money. While in the long term the stock market is the place to be, a high-yield savings account is a sure way to grow your hard earned money in the short term, whether it’s for a house downpayment, purchasing a new car, or a vacation. And it turns out that rate chasers’ return isn’t bad at all compared to the total return of the stock market measured by the S&P 500 index.

The NYT article, Rate Chasers Are Online and Moving Cash Quickly, has this part as a rate chaser’s logic for chasing the rates:

“The millionaires have stocks and bonds, and they’re chasing with their safety money,” said Nick Ferris, a 24-year-old software engineer from Rockville, Md., who readily acknowledges that he is one of the more aggressive rate chasers, having borrowed money at 0 percent introductory rates from six credit cards. “We poorer people who don’t want to go bankrupt if the stock market crashes are more inclined to go rate chasing with all of our money because all of it is our safety money.”

Are you a rate chaser?

Featured information

Keep up to date on mutual funds and other types of major investments. There’s no sense in making investments if you don’t keep up to date on your personal finance! Learn more about how your money is working for you.

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• Update on T-Bill Taxable Equivalent Yield

ING Orange Savings Account $25 Bonus

If you still want an ING account, you can get a $25 bonus if you open an account before the end of the year.

There’s an ING Orange Savings Account ad in the November issue of Kiplinger’s Personal Finance magazine with a reference code for $25 bonus. I have posted similar giveaway a couple of times in the past and the codes were all taken shortly after the entries were published. If you can use the account and the $25 bonus, just leave a comment with a valid email address and I will email you the code.

Currently, ING’s Orange Savings Account is paying 4.30% APY. Not a great rate, but not the lowest either (check out the complete list of online savings accounts).

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Online Savings and Interest Checking Accounts: Where are the Good Deals?

Several months ago, I had a post comparing savings and interest checking accounts that offered by online banks. After last month’s rate reduction by the Federal Reserve, we have seen many online banks lowered their interest rates in the past couple of weeks. The following is an updated list of online bank offers.

While all the banks have cut their rates (UFB Direct seems to be one exception), HSBC went the furthest by slashing their savings account rate 0.55%, from 5.05% APY to 4.50%. In addition, some banks also impose other restrictions on interest rates and fees which are listed in the following.

• E-Trade Max-Rate Checking Account 0.50% APY for balance less than $5,000.
• Ever Bank Money Market Account and Interest Checking Account 3-month promotion rate 6.01% APY.
  • Money Market Account $4.95 monthly fee for balance less than $1,500.
  • Interest Checking Account $4.95 monthly fee for balance less than $1,500.
• ING Direct Electric Orange Checking Account 4.90% APY for balance between $50,000.00-$99,999
• Bank of Internet Freedom Checking $4 monthly fee for balance below $1,000.
• Presidential Bank Premier Savings Account 3.00% APY for balance more than $35,000, Checking Plus Checking Account 2.50% APY for balance more than $2,5000 and $5 monthly fee for balance less than $1,000.
• Salem Five Direct eOne Account 4.80% APY for balance $10,000-$24,999 and $4.90% APY for $25,000-$99,999.
• WT Direct Savings Account 0.60% APY for balance less than $10,000.
• Flagstar Bank Money Market Account promotional rate 5.10% APY; Express Checking Account 1.50% APY for balance more than $100,000.
• GMAC Bank Money Market Account 4.90% APY for balance more than $500; $7.5 monthly fee for balance less than $500 without direct deposit.
• UFB Direct Interest Premier Checking Account 1.00% APY for balance more than $500.
• Discover Bank Money Market Account 5.15% APY for balance more than $50,000.
• Umbrella Bank Saving Account 4.93% APY for balance more than $75,000; 5.35% introductory APY for 90 days.
• Citibank
  Ultimate Savings Account must be opened together with other packages, including Citibank EZ Checking, Citibank Account, Citibank Everything Counts Account, or Citigold Account.

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• ING Direct Lowered Interest Rates

HSBC Dropped Rate for Online Savings Account

HSBC Direct, another popular online bank that offers high yield savings accounts, has just lowered its interest rate to 4.50% from 5.05% APY following last week’s Fed rate cut. The 55 basis points reduction is by large the largest among major online banks. Last week, ING Direct reduced interest rate for its Orange Savings account by 0.20% to 4.30% APY. HSBC’s change put them essentially at the same level as ING Direct. Meanwhile, WT Direct also lowered its rate from 5.26% to 5.15% APY.

I have an account with HSBC with a small amount of money in the past. In the past, I have used the account mainly for T-bill purchase. Since it’s not my primary savings account, the change won’t affect me that much. Two other online banks that I am currently using, FNBO Direct and IGoBanking, still hold their rates. However, change at FNBO could come soon when their promotion period ends this Friday.

Update: Just received an email (and thanks Dean for informing me about the change) from FNBO Direct about their rate changes. Effective September 29th, the rate for their savings account will be 5.05% APY. Not too bad compared to HSBC and ING.

IGoBanking followed the trend and reduced their interest rate to 5.17% APY from 5.30% (thanks Tim). But it’s still the highest among the online banks I am using. The only thing that I don’t like about IGoBanking is the low monthly out transfer limit.

Emigrant Direct today reduced the interest rate of their American Dream Savings Account to 4.75% APY from 5.05%.

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ING Direct Lowered Interest Rates

Got an email from ING Direct this morning with their new interest rates less than 24 hours after the Fed cut its benchmark interest rate. The ING Orange Savings account used to pay 4.50% APY. The new rate, effective September 19, 2007, is 4.30% APY. Meanwhile, yields for their Electric Orange checking accounts are also lowered:

• $0-49,999.99 earns a 3.50% APY
• $50,000.00-$99,999.99 earns a 4.90% APY
• $100,000.00 or more earns a 5.00% APY

It probably won’t be long before we see other online banks drop their savings rates to reflect the changes. When rates were going up, it could take banks weeks or even months before they made the change, if at all. Apparently, they won’t waste much time to reduce the rates.

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Check Out These Related Articles:

• HSBC Dropped Rate for Online Savings Account
• WT Direct Increases Interest Rate to 3.26% APY
• FNBO Direct Followed Suit, Up Interest Rate
• E*Trade Complete Savings Account now 3.30% APY
• Online Savings and Interest Checking Accounts: Where are the Good Deals?

Another $25 Bonus for Opening an ING Direct Oragne Savings Account

There’s another $25 bonus in the October issue of Kiplinger’s Personal Finance for opening an ING Direct Orange Savings account before November 30, 2007.

ING Direct is a leading online bank which offers high-yield savings account (4.50% APY) and interest bearing checking account (4.00% APY). If you are not familiar with ING Direct, here’s a story from Time magazine early this year. If you want to see how ING’s rates compare with other online banks, I have a post that reviews banks currently offer savings and interest checking accounts.

If you can use the reference code and the $25 bonus, leave a comment at this post with your email address so I can send the reference code to you. The bonus is only available for new accounts with a new Customer as primary owner. And one household can only earn one bonus.

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• $25 Bonus for Opening an ING Direct Oragne Savings Account
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• Citibank Ultimate Money Account $50 Bonus and ING Direct $25 Bonus

Bank of America Raised ATM Fees for Non-Customers

If you are not a Bank of America customer, but used their ATMs to get cash recently, you probably have already noticed that you paid more in fees now than before because BoA has raised fees it charges non-customers for using its ATMs from $2 to $3, the highest such fee among major banks.

According to a Reuters news, the bank started charging higher ATM fee on July 31 and within a month, it has imposed the change on most of its ATMs nationwide. However, depending on where you use their ATMs most often, the change may not affect you that much. The Reuters news says for about 6,300 ATMs located at “off-site” locations such as malls, airports and universities, the charge remains at $2.

A Bankrate.com study last year found out that the average ATM fee charged by banks to non-customers has steadily increased in the past three years. In 2006, the average ATM fee rose to $1.60. The change at BoA is unlikely to stop at just one bank and BoA’s rivals may soon follow suite to raise their surcharges if the change brings more profits to BoA.

I am a BoA customer and I only get cash at BoA machines. Since I use credit cards to pay almost all purchases, I was never in a situation that I had to get money from other bank’s ATMs. If you use a lot of ATMs, one option could be getting an account with a bank that reimburses fees charged by other banks for using their ATMs. Actually, there are many online banks do reimburse such surcharges, though some limit it to only 2 or 3 withdrawals.

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