Since their inception in 1994 when Stanford Federal Credit Union began offering their members online interest banking services, online banks have generally been able to offer customers better savings rates and efficiency. Due to reduced overhead expenses, online banks have been able to pass their savings on to customers in the form of better interest rates. Today, because of the increasing number of FDIC insured online banks, they must differentiate themselves further – competing on interest rates, functionality and online features. And since savings rates (certificate of deposit, money market, etc) are all offering record low interest rates, we’d like to go over our top 5 online banking institutions that not only offer rates above the current national average but also have some fairly cool and handy features to boot!
BankVibe.com’s top 5 online banks:
1) Sallie Mae’s Online Savings Account – Since Sallie Mae came out with their savings products this year, they have consistently been listed at the top of the charts for interest rates. In fact, their online savings rate has been number one for the last two months! Want more than a great rate? This product also comes with NO fees, NO minimum balance required and daily compounded interest.
2) Discover Bank High Yield Savings Accounts – Claiming to earn you 5x the national rate average, Discover Bank’s online savings account offers a very clean user interface, 24/7 live support and fast and free online money transfers. They also offer the second best interest rate behind Sallie Mae.
3) Smary Pig’s Online Savings Account – Smarty Pig’s online account is one of the first we’ve seen with social networking features. Although it can be used as a standard online savings account it was originally designed to help you save for specific “big purchase items” such as college tuition, a new or used car, or a vacation in which your facebook/myspace friends could help you save for by contributing. They also offer highly competitive interest rates to their customers.
4) EverBank’s Online Savings Account – EverBank offers customers some of the top rates available and also throws in a bonus interest rate for the first 6 months your account is open. This bonus rate changes regularly but always hovers far above the current national average. This account comes with a minimum balance of $1,500 and you are allowed 6 withdrawals per month.
5) Ally Bank’s Online Savings Account – You may have heard of Ally Bank even before they had that name. Ally Bank is the former GMAC (the banking branch of General Motors). Since GMAC collapsed, they attempted to re-brand themselves with a new name. Today, Ally Bank frequently offers top rates, however, lately they have slipped in BankVibe.com’s charts, however they still offer a very easy to use banking interface and their accounts come with no minimum balances and no monthly fees.
A few years back MSN’s money central disclosed their 10 top online banking institutions (shown below or linked to here) and highlighted the desirable features each offered. However, many of these institutions either collapsed in the 2008 bank collapse or have been defeated by some of the new comers.
|Top 10 e-banks (MSN MONEY)|
|Rank/site||Score||Transfer funds to other banks||Receive bills online||Low-balance e-mail alert||Receive Web-only statements||Stop payment on a check|