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E-Trade Complete Savings Account Falls to 3.01% APY
E-Trade, whose complete savings account had been sitting at a nice 3.30% APY, is falling to 3.01%.
The bank directly relates the drop to the recent Fed rate cut, which will surely lead to other rate drops.
E-Trade's rate will be dropping at the end of the day, Friday 12/19/08.
If you're looking to jump ship, check out ING Direct at 2.75%, FNBO at 3.25%, WTDirect at 3.06% and HSBC at 3.00%. Dollar Savings Direct is currently king at 4.00%.
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ING Electric Orange Drops to 0.5% APY
ING Direct has dropped the rate of its Electric Orange checking account to a 0.5% APY for balances of less than $50,000.
For accounts with more money, the rate is a bit higher. Here's a full look:
- $0-49,999.99 earns a 0.50% APY
- $50,000.00-$99,999.99 earns a 2.85% APY
- $100,000.00 or more earns a 3.05% APY
I use an Electric Orange account as a secondary checking account, and I've never had a problem with it. It doesn't make sense to use it as a savings account — that's what the Orange savings account is for.
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With Fed Rate Cuts, Prepare for Savings Dips
The news that the Federal Reserve cut a key interest rate to near zero on Tuesday may have pushed the stock market up more than 300 points, but for savers, there's a downside.
Almost consistently, when the Fed has cut rates, savings accounts have dropped in reaction.
Given that it's been a while since the last round of rate cuts, don't be surprised if you get a notification (or not, if you use E-Loan) that your APY is dropping.
While I'm not normally a rate chaser, there are still a number of great APYs available.
Dollar Savings Direct is at 4.00% APY, by far the highest available among the big names.
Other options include ING Direct at 2.75%, FNBO at 3.25%, WTDirect at 3.06% and HSBC at 3.00%.
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The Orange Code: A Look Into ING Direct's Success
Arkadi Kuhlmann, the founder of ING Direct, and business partner Bruce Philp, have recently released a book on their success with the revolutionary online bank.
The book, The Orange Code: How ING Direct Succeeded by Being a Rebel with a Cause, talks about business strategy and "how personal financial empowerment has made everyone a winner."
I haven't had a chance to read it yet, but here's what the reviewers at Amazon are saying:
This book got me thinking about why everyone mimics everyone else in business. Why do all banks act the same way (have branches, credit cards, ATMs, car loans, checking accounts, etc.)? For that matter, why do almost all car dealerships, or department stores, airlines, etc. act in the smae way?
Arkadi Kuhlmann has provided his own answer by trashing some of the sacred practices of established banks and creating a new company that is wildly successful by standing for something in the face of the customer.
Thomas A. Farin "Bank Consultant":
I expected to be told most of what I already knew. Instead I found it full of insight on ING Direct's core principals, its branding strategy, its thought process behind its maverick behavior, management communication and a number of things I hadn't thought about. Those things are core to an outstanding success story.
If you intend to reinvent your business it is a 'must read'. I will be ordering a copy for each of our staff members to prepare those willing to make the committment for a planning retreat in which we intend to reinvent our business. I suggest you do the same.
Have you had a chance to read it yet? I'm going to get a copy and, when I finish, will review it here.
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Why You Shouldn't Refer Too Many ING Direct Customers
Did you know that ING Direct caps the number of referrals you can have — the $10 bonus the bank gives when you refer a new customer — at 25?
This guy found out the hard way.
ING Direct filed a civil suit against Breck Yunits in U.S. District Court last week, claiming the 2007 Duke University graduate used the ING trademark and potential customers’ e-mails to improperly gain close to $10,000 from the bank’s “Refer a Friend” program. …
In the suit, ING alleges Breck Yunits created a Web site with an address and domain name “ingdirect25.com” in May, a move that infringed on the corporate name and trademark, the lawsuit said.
Further, through the Web site, ING alleges Breck Yunits referred 918 new customers – far more than the limit of 25, resulting in a profit of $9,180, far in excess of the $250 limit, per the rules of the promotion, the lawsuit said.
While the suit is technically over the use of ING Direct's name in his site's promotion, Yuntis's brother alleges the bank paid out all of the referral bonuses — and then took them away from his account with no warning.
“They never, ever notified him, never sent a written notice, never told him to stop, never issued a cease and desist,” Conor Yunits said. “In fact, he had been getting phone calls from them all summer long, thanking him for the referrals.”
For a bank with such good customer service and technological foresight, it's surprising to hear that they would be sloppy enough to let any user use more than 25 referrals.
If you're looking to open an account with ING Direct, which I still recommend, you can use this link and feel comfortable that I won't get sued over it.
Massive hat tip: The Sun's Financial Diary
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WTDirect Giving Away Deposit Bonuses Up to $250
If you're thinking about opening up a new online savings account, WTDirect has a new bonus for you.
When you open a new account using this link and fund with an online transfer by December 22, 2008, you can earn up to a $250 bonus (depending on your deposit).
Here are the deposit amounts and the bonuses attached:
Balance | Bonus
$10,000 $50
$20,000 $100
$30,000 $150
$40,000 $200
$50,000 $250WTDirect says they will average the account balance between 1/1/09 and 2/28/09 to determine where you fall, and deposit the bonus in mid-March.
The bank's current APY is 3.06%.
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Instead of Spending, Sock That Cyber Money Away
One of the first things you should do after you get a raise at work or pay off a recurring debt is to continue to live at your existing levels.
Don't take that 'extra' money you now have and start to live larger. Instead, automatically transfer it to a savings account and watch your net worth grow.
Rather than accumulating extra stuff, you're increasing your savings without cutting back on your lifestyle. It's a win-win situation.
Today, on Cyber Monday, do the same thing. Instead of buying something you see online, take the price of the product and transfer that amount to your online savings account.
Spending money isn't bad. But wouldn't you rather spend money on yourself than on having more stuff?
The best gift you can give yourself is financial comfort. Today, make it happen.
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FNBO Direct Named Kiplinger's Best Online Savings Account
Kiplinger's has named FNBO Direct its best online savings account in its annual Best List roundup.
The magazine doesn't go deep into why it suggests FNBO as the best options, but it does offer up this:
Earn 3.5% on your FDIC-insured savings at www.fnbodirect.com. You pay just $1 to open an account with no maintenance fees and no minimum-balance requirements. You can link the account to as many as three others, including FNBO's bill-payment account. Use electronic transfers to move your funds and your ATM card to withdraw cash.
FNBO has shot on the scene in the past 18 months, launching with a 6.00% APY account and promoting a Pay Yourself First contest on YouTube.
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WTDirect Drops Online Savings Rate to 3.06% APY
WTDirect has dropped the rate on their online savings account to 3.06% APY, down from 3.31%.
While that's a pretty significant drop, the rate is still pretty competitive with a number of the other accounts out there.
Most of the online banks have been dropping their rates, with HSBC, FNBO and E-Loan all reducing their APYs in the past month.
ING Direct recently lowered its APY to 2.75%. Dollar Savings Direct has stayed at 4.00% APY. FNBO is currently at 3.25% and HSBC is at 3.00%.
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Why I Closed My E-Loan Online Savings Account
Yesterday, I closed my E-Loan online savings account.
I'd been thinking about doing it for awhile now, but finally made the request and have moved all of my money to ING Direct.
I've been fed up with E-Loan's need for control, lack of customer service, and crappy introductory rates.
Despite being one of the most promising online savings accounts when it first came out, E-Loan couldn't compete on a customer-friendly level with other online banks.
Not telling your customers when the rate changes is cheap.
Not allowing your customers to move their money to more than one bank every 4 months is controlling.
Not letting new savers get the same rates as those with biggers coffers is discouraging.
Even though they offer a lower rate, ING Direct lets you do whatever you want with your money.
Remember: it's your money. Don't let someone else control it.
That's why I closed my E-Loan account.
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