Uncommon Cents

I was an early adopter of Internet banking; in fact, I used Netbank for a long time. Sadly, late last year, Netbank was closed down by the FDIC; however, all was not lost–ING Direct became my FDIC designated Netbank replacement. In the meantime, I also ended up picking up three different money market accounts (each for different reasons) during the last couple of years as well. I’ll give those a quick run through for you. Remember, these are just my personal experiences; your needs, expectations, and opinions could vary considerably from mine. I am excluding any financial institutions I’m dealing with that have branches here (such as Pentagon Federal Credit Union) but I am not including my credit card companies even if they don’t have a local presence so I can focus on savings and checking account options.

Some of the things that I really liked about Netbank were that you could use regular paper checks–I tend to use these still! Mostly to pay people rather than organizations, although one of my credit card accounts doesn’t really have a great way for me to pay them online. Well, actually, they did, which was one of the other things I liked about Netbank–their online bill pay, which was free as long as it was used (I think) about once every three months. They also had postage paid deposit envelopes so I could mail deposits to them (for awhile they also had deposits that could be dropped off at UPS Stores). There were things I wasn’t all that hot about as well: they had a Visa backed debit card that I used once ever and their no fee ATM access on island was pretty limited (however, one of them accepted deposits).

So now that they’re gone, what are the online banks I’m dealing with now and how do I like them?

ING Direct is the bank that took over for Netbank, so I have them by default. I have their Orange Savings account, which is what my Netbank checking morphed into. I thought that relatively strange; a savings account replacing a checking account. I also have their Electric Orange checking account, which I opened with a promotional offer ($25) with the Netbank closure, and I can pay bills from there, or even have paper checks sent, although they are sent by them rather than me putting them in the mail or hand delivering it to someone. ING Direct is not awful or anything; they have communicated with me pretty well, although I have had some issues. One of the things I dislike is their Web site–why can’t I enter the numbers for my PIN using the keyboard rather than a mouse or trackpad?–and I have yet to use their online bill pay. I also have had to call for customer service a few times and they have limited hours then which aren’t the best for me (but I live very far west). That said, they pay a very competitive interest rate and seem to have lots of services available. The difficulty I have right now is they clearly don’t want me using paper checks–which I still like to use.

I learned about Virtual Bank through one of my favorite personal finance bloggers, Tricia over at Blogging Away Debt. I signed up for their eMoney Market account because she offered an affiliate link where I got a $20 bonus on a $100 deposit. The interest rate overall is in the lower range of these online banks, so I haven’t really kept a lot there, but $20 is $20 and I’ll take that on a $100 minimum. No fees, online only statements, and online transfers from other accounts are pretty typical of this type of account. I haven’t been able to figure out how to send them a check for deposit, but I haven’t tried hard either. This is a money market savings account, not a checking account–the truth is, if they didn’t offer the $20 bonus, I’d likely not have touched them at all; not that they’re awful, but there’s nothing here aside from the bonus that’s better than the others.

Capital One Direct has a money market account with check writing. This is almost a hybrid account between an online and brick and mortar bank. I found out about them due to their being listed in a Costco coupon book. I can use real checks with this money market account (although I think there’s a limit of six a month), and they provide the checks free too! They also provide self addressed postage paid envelopes for deposits, online transfers from other accounts, and a very nice interest rate. I use this for my “regular expense” account, meaning I put a set amount in there every month to use for my regular fixed expenses like motor vehicle insurance, term life insurance, and motor vehicle registration.

Of my online accounts, iGoBanking’s money market account is the one that currently has the highest yield, so it’s where my emergency fund lies. Like Virtual Bank, they like online transfers over mailed in deposits and online statements over mailed out statements. Their interest rate is the highest that I currently have on any of my accounts, so this is where my emergency fund sits, aside from $1000 in a local brick and mortar bank.

So which would be my choice? It’s hard to say. Even though toward the end the interest they were paying was pathetic, I liked Netbank for their paper checks and bill pay. Currently, since I still have a local checking account (and due to the necessities of cash as well as having somewhere to get fast access to it, I probably always will, especially since my Mom is a bank retiree) so that’s not a huge deal. If I could get unlimited check writing from Capital One Direct, I may go that way, but the way things stand, all of these online banks have plusses and minuses. What is clear is that there are lots of options for just about any need with online banks.

Trackback URI | Comments RSS