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
- 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”¦