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Thread: Online bank accounts

  1. #1
    Senior Member
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    Online bank accounts

    Based on Kib's reply to my previous post, I'm inquiring about online bank accounts. There are some pretty impressive interest rates, but what's the catch? Are they safe? How do you deal with no brick and mortar buildings.

  2. #2
    Senior Member
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    FDIC and NCUA deposit insurance is in effect within stated limits.

    If there is a "catch" I would say it is that the online bank which is "competitive" on deposit yields today may cease to be in future. Savings rates are subject to change... not always change for the better.

    For Example EverBank (now TIAA Bank)
    8/10/09 3.01% APY
    3/12/12 0,76%
    11/19/18 2.15%
    12/9/19 1.1%
    1/16/20 1.75% (latest)

    This is not intended as a criticism of TIAA Bank, or any other deposit-taking institution. They can and do change the APY on savings.

  3. #3
    Senior Member kib's Avatar
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    I would say the catch is that they're very particular about you meeting the terms. Looked at it from their side, it's understandable that they make things complicated; the more likely the mistake, the less interest they pay. There are a couple of things that are standard for these accounts.

    Addressing dado's point, there is something called Kasasa. I don't know quite how it works, but it's like you apply at a bank, say Transaction Alliance Bank, and the terms they offer are through Kasasa. I have had good luck with Kasasa accounts not losing their shining interest rate, but it is true, you never know.

    1. they want a direct deposit of some amount. They're expecting it to be your paycheck or other recurring payment, but usually any transfer from another bank will do as long as it meets the $ criteria and happens once a month or more. (Unless they also have an account minimum, you can transfer it right out again if you want to, they're just looking for an ACH credit).

    2. They want a certain number of transactions using your debit card. If you're even one transaction short or you miss the cut off date, no interest for you. Sometimes those debit transactions have to be a minimum amount.

    3. They usually want you to use e-statements, not paper statements.

    4. They may want you to log into your account at least once a month.

    Sometimes there is a small catch like if you're not in the Idaho potato harvester's union, you have to make a $5 contribution to the Cornhuskers Lotion fund. And some of them are just not nationally available at all.

    I have one that pays 5.09%, but that one is almost not worth it, because in order to get that rate, you have to use their visa card and spend a certain amount. I find myself worried I'm not spending enough, and that's ridiculous.

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