The second high yield savings account I opened was with OnBank. They offer a Money Market Savings account as well as “high” interest CD’s. Their rates were once competitive but have since fallen below 1%, the Money Market Account runs .75% and they are offering 1.95% for 60 month CD’s as of 04/05/2009.
About the Bank
OnBank is a division of the Manufacturers and Traders Trust Company, founded in 1856 and headquartered in Buffalo, New York. They have been FDIC Insured since July 1, 1934 (FDIC Cert 588). If you have deposits with M&T Bank those balances would be added to your OnBank balance as far as FDIC insurance is concerned.
Sign Up
Sign up was on par with other online savings accounts. It was easier than iGoBanking’s sign up process, however, not as easy as the process for ING. They require you to validate information from your credit report, as well as do the standard bank account verification and then you are in. One oddity was they require you to include a number in your username. I don’t know what that is intended to prevent.
The Interface
I really like their interface, it is clean and easy to follow, with left side navigation allowing you to view account activity, statements, download account activity, manage categories, and create reports. Additionally they provide quick access to external transfers. Some of the features are more related to checking accounts than a savings account so you probably wouldn’t need them.
Transfers
OnBank has a $50,000 per transaction limit on transfers, and you cannot perform more than 6 debits from the account per month, no more than 3 of those can be via ACH from another instituition. I have had no problems linking my other online savings accounts to this account and have actually used it as a mid point in a transfer or two so I didn’t have to wait to verify deposits.
Conclusions
OnBank flew under the radar for the most part when they opened and did not get a lot of publicity when their rates were competitive. Now that the bottom has fallen out of their rates I have pulled out as you can tell from the balance in the screen shot. If their rates come back up I may consider moving my funds back, they offer a solid interface and the easiest account linking I have found.
Recently I have begun the search for a new Online Savings account. Previously I had funds with both OnBank and iGoBanking. While my iGoBanking rate has remained competitive my OnBank rate went from a 3.6% to a 1.2%. That to me is an unacceptable change in interest income. I go about looking for a high yield savings account in pretty much the same way as everyone else, I start out at BankRate looking for both the Safe and Sound rating as well as the interest rate and minimum balance requirements, then look into reviews and other information on the interwebs about the institution.
Well my search has led me to two possibilities, ING Direct with 2.2% APY, and no minimum balance VS. Dollar Savings Direct with 3.20% APY and a $1000.00 minimum balance. I am going to be investing more than $1000 so I am not concerned with the minimum balance so much. Most people would look at this and say it is a no brainer, that is a one percent difference in the APY. There are definitely mitigating factors here that muddy the waters and make the decision not so clear.
Let start with branding/perception and usability. Just about everyone has heard of INGDirect, I personally know people who have accounts with them and have loved it. This in itself goes a long way, when you have a personal relationship with someone and they make a recommendation that means infinitely more to you than a review on a Blog of some guy you have never met. Add to it the fact you can easily create subaccounts in INGDirect allowing you track for specific savings goals and that 1% difference starts to fade away into the back of your mind.
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When I was first putting effort into managing my finances I was reading all these things about online banks. Most people were with ING & HSBC but the rates weren’t as good as I really wanted. After much research I found iGoBanking, at the time their rates were at the top of list and at 1.85% APY (as of 04/05/2009) are still extremely competitive.
About the Bank
iGoBanking is the online banking arm of Flushing Savings Bank, a brick and mortar bank headquartered in Lake Success, New York. Flushing Savings Bank was originally organized in 1929 and is currently a division of Flushing Financial Corporation (NSDQ: FFIC). They have been FDIC Insured since July 1, 1943 (FDIC Cert 16049).
Sign Up
It has been a while since I signed up but it was simple and all on line, I was able to fund directly out of another account and only had to fund with $1. There were some issues regarding discrepancies in my wife’s name and public record so I had to deal with their customer service department, all of which was very easy and they were very helpful. Once you are all setup you can login and be presented with your summary page:
