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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I got an email from FNBODirect today stating:
“Beginning September 29, 2007, FNBO Direct is happy to announce that we are offering one of the highest rates in the nation: 5.05% APY*”
I also received the email from FNBO about 5.05% APY. Sun, Where will you put your money next? Would you keep in FNBO with 5.05% APY or move somewhere else? Your blog entry on this will be appreciated.
It will be interesting to see if the high yield competition by online banks will be a genie out of the bottle like frequent flyer miles have been to airlines.
Igobanking dropped, too. Now they are at 5.17% instead of 5.3%. Still on top.
Igobanking just lowered its rate from 5.3% to 5.17%. i think the 5%’ers are going to be rare, especially if the fed lowers rates again next month.
What’s the monthly out-transfer amount for Igo? I was thinking about opening an account. Not too sure now…
The transfer out limit is $25,000 in a rolling 30 day period. The reason I say it’s low is by comparing to other banks I am using. Also since I do a lot of balance transfers, I sometimes need to make a larger amount of money quickly. $25K don’t seem to be very convenient to me. But the 5.17% rate is pretty good.
man, i want to be in ya’lls shoes needing to transfer more than $25k out at any 30 day period.
It’s becoming a day job just to keep up with all the rate changes.