For the last 6.5 years, I have been a very happy customer of ING Direct. I have been keeping my emergency fund, my taxes account, and our “buy a home” savings accounts there and have never had any problems with them…well, except for their interest rate. There was a time in the past when they were paying more than anyone else, but in this economy and these times, their rate has been steadily dropping every few months. It is now down to a paltry 1.50% – and they no longer have the highest interest rate. And while their rate is higher than if you kept your money in a “regular” savings account at your local bank branch, I seem to get a notice from them quite often about it going lower. So now I have been on the lookout for an online savings account that pays more than 1.5%, and I only found two that were higher – HSBC Direct and Ally Bank, who pay 1.55% and 1.85% respectively. While HSBC’s rates are better than ING’s, Ally’s is even better – leading me to think it might be time to switch banks. But first, I needed to compare the banks…
ING DIRECT ORANGE SAVINGS ACCOUNT
They have been my bank of choice for a very long time, as they have for many, many other people. It is easy to set up an account, transfer money between my checking and savings, and track my earnings whenever I feel like it. There are no fees or account minimums, and they are FDIC insured up to $250,000 per depositor. However…their interest rate is currently only 1.50%, which while higher than the .10% my Bofa savings account offers, it is not the best rate on the market today. However, their customer service has been great and I have never had a problem with them. Want to stick with tried and true? Then you can go ahead and apply for an ING account :
HSBC Direct Online Savings
HSBC might also be a contender for most-popular online bank, as I know many people who have accounts there. They too have no minimum balance requirements and no monthly fees, and they pay slightly more interest than ING does – 1.55%. I am not sure I would move my money just for a .05% rate increase, but if you are just starting out, at least HSBC’s rate is higher than ING’s. Apply for an HSBC Bank account :
ALLY HIGH-YIELD SAVINGS ACCOUNT
Ally Bank is the new face of the old GMAC, but don’t worry – they are FDIC insured up to $250,000 per depositor as well. You can open one of their accounts with $0, they have no minimum balance or account fees (like the others), but there is one big difference – their interest rate is just about a full half-percentage point above ING or HSBC, at 1.85%. Apply for an Ally Bank account :
So, what have I learned? I have learned that all three banks are virtually identical as far as I can tell, except for one thing – their interest rates. My standard bearer, ING, is no longer king of the hill – the new Ally Bank now is. Now I have to make a decision – do I leave all my money at my bank or move it all to Ally? What do you guys think? Anyone have experience with Ally? I guess I keep hoping my bank will wake up and smell the roses about other rates, but it hasn’t happened yet. What are your thoughts on this?