On line savings account?

Question

I've been reading abount on-line savings accounts. They get great rates, but I'm trying to find the hidden fees and costs. Has anyone had any experience, good or bad, with them??

Answer 1

Exactly like Jay said, there is no catch. The better rate is because they don't have to pay for a bank branch to service you (branches cost in the millions of dollars to build), they don't have to pay an employee to sign you up (money is transferred electronically from your funding location to their account), and they don't pay anyone to do transactions on the account, you do all that yourself.

All that money they save, they can afford to pay the higher rate than the bank. Banks pay better rates on CD's because they can lock your money in for the period of time you sign up for, which helps them to offset their costs.

Answer 2

I personally have an account with paypal... I can still access the money with their debit card but here's an article you may want to read.

http://www.usnews.com/usnews/biztech/articles/060522/22checklist_retirement.htm

Here's what you need to know to open an online savings account:

Look for the FDIC logo. If putting your cash in a virtual bank account makes you squeamish, keep in mind that up to $100,000 is protected in a bank insured by the Federal Deposit Insurance Corp.

Hunt for high yields online. The highest yields recently ranged from 3.6 percent to 4.75 percent. Interest should be compounded daily and credited monthly. You can shop for yields at Bankrate.com.

Plan for some inconvenience. Online bank services are not swift. The biggest drawback for many consumers is the transaction lag time. At EmigrantDirect, the online branch of New York's Emigrant Savings Bank, initial deposits cannot be withdrawn for 10 business days. Future deposits may be withdrawn after five business days. Funds transferred in or out of the account usually take two to four business days to clear.

Moreover, there's no check writing, access to an ATM, or hand-holding from a teller. So make sure that it's easy to get your questions answered online or with a toll-free call.

Check for higher-yield accounts at your bank. Still reluctant to make a move? See what's available at your existing bank. Citibank now offers an insured e-Savings account with a yield of 4.75 percent to customers who already have a checking account with the bank. That's compared with the anemic 0.7 percent APY doled out by its day-to-day savings account. No minimum balances, free transactions, no-brainer.

Answer 3

Online bank accounts are like regular bank accounts. Find one with a reputable company, with good returns on the investment. Be sure to check out the bank's stability and how it deals with its online customer accounts.

Answer 4

I'm considering an HSBC online savings account they keep advertising on tv at a 5.05 apy. The question I keep asking myself, 5.05 vs .5 % at my regular bank. What is the catch there has to be one?

Answer 5

I can't get by "Bear Naked"'s avatar... gosh it's hot, lol!

I don't trust anything I can't put my finger on! Especially when it comes to MY money. Paypal is pretty big so I would consider that but i'd rather go to a bank with FDIC!

Answer 6

Comparing Savings Accounts
By: John Mussi

This web site has loads of information!!! Plus you can compare company offers too!!!

Answer 7

I have had very good experience with ING Direct. No fees, easy to use, good interest rates. FDIC insured. ingdirect.com

Answer 8

Because they don't have brick-and-mortar locations they have fewer expenses, so they can afford to pay higher dividends. No trick; they're the real deal.

Answer 9

I have had nothing but good luck with pay pal.....4.95%