Online Bank - Savings and Money Market Accounts (funds, paying, rates)

[BamaDave]

I constantly see ads for savings and money market accounts from online banks with interest rates at 2%-plus. Are these introductory rates only? I currently have a money market with BBVA earning 1.75% interest, but that's an introductory rate. It's very convenient, since we do all of our other banking with them (checking and an HELOC) and don't have dramatically high balances or anything. But if these accounts with 2+% interest rates are not just introductory, then it would probably be worth it to move my money. I plan to at least try to negotiate with BBVA once the introductory period ends.

[Petunia 100]

The rates aren't introductory, but they do bounce around. However, they are consistently relatively high.

I've been using online banks for savings for about 16 years now. Never any problems.

[rjm1cc]

Be sure the funds are insured by the gov and do a little research with google on the institution. In general you will get a better deal with an online account and the rates will change but I don't think they are introductory.

If you have a local bank you can probably set up cash transfers between the accounts so you can get your money in a couple of days if you need it.

You can usually deposit checks into your online account with a smart phone.

[BamaDave]

Okay, thank you! I already use mobile banking with BBVA and rarely go into a branch anymore, but I do like the convenience of having all of my accounts in one spot.

[Moonlady]

I have an American Express online savings account currently paying 2.1%. Iy's an easy transaction to move money to my credit union checking or savings - usually takes overnight. Considering the CU pays a whopping .35% over $25K (.20 under), I'll take the 24 hour lag in favor of the higher interest.

[HB2HSV]

Originally Posted by Moonlady

I have an American Express online savings account currently paying 2.1%. Iy's an easy transaction to move money to my credit union checking or savings - usually takes overnight. Considering the CU pays a whopping .35% over $25K (.20 under), I'll take the 24 hour lag in favor of the higher interest.

We did the same with Capital One. They have online money market account paying at 2.3% and one-year CD paying at 2.7% interest. Just think for years I have my money in bank savings account yielding 0.1%

[man4857]

Originally Posted by BamaDave

I constantly see ads for savings and money market accounts from online banks with interest rates at 2%-plus. Are these introductory rates only? I currently have a money market with BBVA earning 1.75% interest, but that's an introductory rate. It's very convenient, since we do all of our other banking with them (checking and an HELOC) and don't have dramatically high balances or anything. But if these accounts with 2+% interest rates are not just introductory, then it would probably be worth it to move my money. I plan to at least try to negotiate with BBVA once the introductory period ends.

Not just online banks, many credit unions offer similar % returns on savings accounts and CD's. I bank with Alliant and they're great and offers a 2.1% return on savings.

[oneasterisk]

Originally Posted by BamaDave

I constantly see ads for savings and money market accounts from online banks with interest rates at 2%-plus. Are these introductory rates only? I currently have a money market with BBVA earning 1.75% interest, but that's an introductory rate. It's very convenient, since we do all of our other banking with them (checking and an HELOC) and don't have dramatically high balances or anything. But if these accounts with 2+% interest rates are not just introductory, then it would probably be worth it to move my money. I plan to at least try to negotiate with BBVA once the introductory period ends.

The rates can be introductory, but depends on the bank. I have an online savings account with Ally and really like it. I convinced my Mom to do the same. She had been banking with Suntrust for years. I told her she should try Ally since her bank was only giving her .01% interest. One month with ally was several times her annual interest she got from Suntrust. I helped her setup automatic transfers to her Ally account.

[moneymkt]

Originally Posted by Moonlady

I have an American Express online savings account currently paying 2.1%. Iy's an easy transaction to move money to my credit union checking or savings - usually takes overnight. Considering the CU pays a whopping .35% over $25K (.20 under), I'll take the 24 hour lag in favor of the higher interest.

As of 8/22 it's paying 1.9%

[JonathanLB]

I’m thinking of putting most of my cash into Wealthfront. Their $1 million FDIC insurance through partner banks is very appealing and 2.32% is about as good as I can apparently get. I’d be willing to consider CDs but I had trouble not laughing when a guy at Wells Fargo told me they have a special 2.1% 7-month CD for “new money” coming into the bank. Uhh, I don’t need to do anything special for 2.1%, get real, Wealthfront is well ahead of that without any special condition or locking money up for 7 months. If that’s what brick and mortar banks can offer, they can’t really expect me to keep more than 50 grand or so spending cash in there for the convenience of easy access and ATMs or whatever and enough to avoid fees but not enough to be angry about the low rates.