Internet Only Banks?

  1. At the barbers I was reading some financial advice in one of the magazines he had there and they are recommending internet banks for savings accounts because they offer higher interest rates. My brick and mortar bank offers 1% on my savings account.

    I don't have a lot of money but decided to put $2000.00 in an internet only bank. I choose ING because they manage my 403B through work and did a little research and they came recommended. I also read that HSBdirect is trustworthy. They are offering 4.5% interest. It's completely electronic, I can in an instant transfer the money to my checking account and visa versa.

    Anyone have any experience with internet only banks. At first I was a little wary, but on the surface it seems like a good investment compared to my credit union.

    I would love to have 3 months salary in the bank, but that's a pipe dream with this money trap of a house I'm living single in. But I can dream can't I?
  2. 32 Comments

  3. by   clemmm78
    I use ING for both savings and a line of credit. My friend used ING for a mortgage. I've never had any problems and I find their customer service to be A1. This is in Canada though, so I'm not sure how that translates to the US.
  4. by   sunnyjohn
    I use HSBC. I got 5.15% earlier this year.

    It is where I am stashing tha savings I will be using next year to pay for nursing school. So far everything has gone smoothly. I have an ATM card and can get money quickly at any ATM if I need it.

    The interest rate has really helped my potential tuition money grow faster!
  5. by   UM Review RN
    I have a question:

    Is your money insured through FDIC when using this type of bank?
  6. by   Katnip
    I have a friend who is a VP at a major national bank.

    She actually likes internet banks and has been thinking about doing a start up internet bank. Except she's going through a divorce and has put that on the back burner. The process is not really any different than a bricks and mortar bank except the face time.

    But like Angie said, make sure that your internet bank has all the same insurance and certifications and other one does. Your money will be as safe as it is in a traditional bank.

    My friend believes ING is a good solid bank to choose. Except I keep pronouncing it Eeeng.
  7. by   JaxiaKiley
    I've been thinking about this, too. Thanks for starting this thread, Tweety!
  8. by   babynurselsa
    My oldest dd started a WAMU account. She actually works in banking. She says she is getting nearly 5% on her savings also. I have been thinking about doing the same just as a side savings account.
  9. by   adrienurse
    I don't know why, but I have an irrational fear of bank tellers. I prefer to do it online anyway.
  10. by   sunnyjohn
    Quote from Angie O'Plasty, RN
    I have a question:

    Is your money insured through FDIC when using this type of bank?

    My HSBC online account is FDIC insured.
  11. by   JeanettePNP
    I have an ING account that offers 4.75 interest. I'd love to put more money in there but my priority at the moment is to pay off all my credit cards--then I can start thinking about putting more into savings.
  12. by   cariad
    we have had money in a uk internet bank for several years, its associated to an everyday high street bank as they call them in the uk. the interest rates that they pay on the savings are higher because they dont maintain buildings and employ lots of tellers.
  13. by   Tweety
    Quote from Angie O'Plasty, RN
    I have a question:

    Is your money insured through FDIC when using this type of bank?

    Yes it is. From their website: Earn 4.50% Annual Percentage Yield on an FDIC-insured savings account with no fees, required minimums or service charges… no matter how much you have on deposit.Products & Rates General Page

    I think they charge a fee after the 6th withdrawal in a years time, but with such a small amount I probably won't be doing that. Plus they have automatic transfers if you want, so I'm putting in $100.00/month automatically. Hopefully I'll keep my grubby paws off of it.
  14. by   live4today
    hi tweety! thanks for the link to ing! once i'm back to work, i'm going to be banking money earned a whole lot smarter....savings, stocks, and wise spending indeed.