Leaving My Bank – Comparing Online Bank Accounts.

Elisa Cundiff is the guest blogger today, she is the Outreach Coordinator at Thrive, a free online budgeting tool.

Every morning I review all my financial accounts on Thrive, but last Thursday, I noticed something strange: a “$3 non-Citi atm fee”. This was an additional $3 that my bank was penalizing me with for not using a Citi-bank machine. This means that I’m paying upwards of $6 every time I withdraw money from an ATM, because I live in a town where there are no Citi-bank ATMs.

I called Citibank and threatened to switch banks unless they dropped the fee in the future. The refused, and now I’m stuck with finding another bank. But since I’m at it, I’d like to find a really good one! At least one that meets my needs right now, so that I’m not in the same place a month down the road, with another poor customer service rep at a new institution. So, I’m off to find the best bank.

For me, the best online bank must fulfill the following requirements:

  • It must offer free online bill pay
  • Must not charge me for ATM withdrawals
  • It must support online transfers between internal and external accounts
  • Low fees
  • Good interest rates
  • Must be linkable by Thrive (a personal financial advice software program that I both work for and use)

For this exercise, I’m going to rate tree different online banks; E*Trade, Charles Schwab, and ING Direct, by giving them a point for each of the above criteria that they meet.


  • Supports online transfers ““ 1 point
  • Has online bill pay ““ 1 point
  • Has low fee options ““ 0.5 points
  • Linked to Thrive ““ 1 point
  • .05% interest rate ““ 1 point

Charles Schwab

  • Does not charge for ATM withdrawals, and will even reimburse the ATM fees your hit with by the bank you withdraw from ““ 2 points
  • Supports online transfers ““ 1 point
  • Has online bill pay equivalent (called Checkfree) ““ 1 point
  • Has many low or no fee options ““ 1 point
  • Linked to Thrive ““ 1 point
  • .25% interest rate ““ 1 point

ING Direct

  • No fees ““ 1 point
  • Supports bill pay ““ 1 point
  • Supports online transfers ““ 1 point
  • Does not link to Thrive (yet) ““ 0 points
  • 1.30% variable interest rate ““ 1 point

How did everyone rank up? According to my ranking scheme based on what I’m looking for in a bank right each bank scored the following:

E*Trade: 4.5
Charles Schwab: 6
Ing Direct: 4

So, Charles Schwab it is! The great thing about switching to Charles Schwab is that it will save me about $144 this year in ATM fees ($6 twice a month for 12 months), and I’ll have a slightly higher rate of return on my savings. Now, if that isn’t the perfect motivation to go ahead and fill out this mountain of Scwab paperwork I just printed out”¦

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Comments (11)

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  1. PK says:

    Umm, Thrive supports ING Direct already.

  2. Have you considered EverBank? I’ve been a customer for a few years now and it seems to meet all of your criteria — perhaps exceed them in some cases. I can’t figure out whether it supports Thrive or not, but it does support MINT, so maybe that helps?

    EverBank has a YieldPledge guarantee which means that you’ll earn near the best rates on all of your deposit accounts.

    Good luck with the decision…

  3. Bank Rates says:

    I really like the Schwab accounts. I have a ING Direct account that I like for the interest rates, but the banking features with Schwab seem much more robust.

  4. Bill says:

    E-trade refunds ATM fees and supports online transfers too.

  5. Tyler says:

    You weren’t able to get cash back on your Citi debit/ATM card when making a routine purchase (i.e. groceries, household items, etc.)? Would seem the logical step to avoid a $6 fee.

  6. Kira says:

    Way to go! I dumped Citi this year too (raised the APR on my credit card to 17%) and they took billions from TARP which they will not be repaying, (atleast not all of it, thanks to their recent bankruptcy).
    If you’re eligible, I highly reccomend USAA (have to be military or a decendant to have access) but they are the BEST online bank ever. Free bill pay, free checks for life, ATM fees everywhere get refunded, and I can deposit checks by scanning them in.
    Oh, and you always get to talk to someone in the US. If you can get them, you won’t be sorry.

  7. Craig says:

    I have yet to convert to an online bank even though so many praise them highly. I have been sticking to my money market accounts.

  8. I love Charles Schwab Bank. I have an investment account, checking account and credit card with them.

    The checking account is supposed to be “high interest” but it pays less than 1% so that is my only problem with the account.

    The credit card is awesome because it pays 2% on everything with no cap. The money is automatically deposited into my investment account each month.

  9. I think you wouldn’t be raising the bar too high if you changed it to “no fees” instead of low fees.

    I hate fees.

    With a passion.

  10. Elisa says:

    @PK – you’re right, they do. They didn’t for a long time and they’re still battling with how they want to handle their end of the security, to make sure their users feel comfortable, which means they go through many switches and they don’t always work. But yes, they technically to work with Thrive right now. I really should have elaborated on that.

    @MITBeta – I have heard good things about EverBank! I will look into them, thanks for the recommendation. And I checked, and you were right, Everbank is also Thrive friendly.

    @Bill – Thanks for noting that E*Trade also refunds ATM fees and supports online transfers. I wish that I hadn’t missed that. That would have definitely changed my scoring process!

    @Tyler – Great suggestion for getting “cash back” with the debit card from normal grocery purposes. This would work for most people, I happen to pay my office rent in cash, which means I’d either have to ask for cash back in moderate amounts for the entire month, or I’d have to find a really, really nice grocery clerk.

    @Kira – Thanks for the USAA recommendation! Unfortunately, I don’t qualify, but I have heard great things about their service.

    @David – That’s a good point. I hate fees too. We share a strong passion.

    Everyone! Thank you so much for your suggestions, comments, corrections and support!

    I’m really looking forward to a better banking experience and I appreciate all of your thoughts!

  11. By the way, if you’re at all concerned about making deposits to EverBank, I just used their new check scan service today. You put the check you want to deposit on the scanner and go to the Everbank website. It scans the check and the money is in your account in a very short period of time. Very cool.