# Online savings accounts?



## zuren (Feb 13, 2015)

This appears to be the closest thing we have to a "financial forum", so I'll float this out here. We may need a financial section of this site that isn't focused on retirement.

What is everyone's appetite/acceptance of online banks? I'm not talking online access to your local bank account, I'm talking a bank that (for me) has no local presence. I would have to link a local account to the online account, then transfer money electronically.

My wife and I are rounding the corner on paying off a small loan and I just accepted a new job with a bump in pay. Very shortly we will have a decent increase in cash flow, so I'm reconsidering our local savings account for our emergency fund. We have never been overly impressed with the bank where the money sits now, and all of our local banks have terrible interest rates for their savings accounts, money market accounts, and CDs (0.05-0.15% for anything that I find attractive). I started poking around at Bankrate.com and it would be pretty easy to get an account that pays closer to 2.00%; we are currently getting 0.10%.

My overall plan would be to keep at least 2 months expenses at home in the safe, then put the rest into one of these higher yielding accounts to help it grow. Just wondering if a diversified plan like this would be wise.

Thanks!


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## gerold (Jul 18, 2011)

zuren said:


> This appears to be the closest thing we have to a "financial forum", so I'll float this out here. We may need a financial section of this site that isn't focused on retirement.
> 
> What is everyone's appetite/acceptance of online banks? I'm not talking online access to your local bank account, I'm talking a bank that (for me) has no local presence. I would have to link a local account to the online account, then transfer money electronically.
> 
> ...


I really prefer local bank. I have two accounts at two local banks. They take out each month for my elec. , net, bill etc. All the people there are local and I know all of them. I visit the banks once a month to do business. Easy to get business done with my local banks. I don't care that much about the rates they pay. I have stocks with Lloyds very good at making me money on my stocks. They charge a small percent on the profits I make on the stocks. If the stock doesn't make money they don't charge anything on that transaction.


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## catsboy (May 14, 2015)

I am also an advocate for local banking and knowing them personally. I don't keep a large amount in any savings account so I don't really worry about the rate they are paying. If I want to make money with my money there are much better ways then a savings account. For me its just a place to hold some rainy day money.


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## emdeengee (Apr 20, 2010)

We keep some emergency funds at home but not this is just for emergencies as there is always the danger of theft. Another alternative if you don't want to put it all in bank accounts is to rent a savings deposit box. You get no interest but it is secure, fire proof and with relatively easy access. And in Canada the cost is deductible on your income tax.

We have found that the interest offered on savings accounts by the big banks in Canada is a joke. Credit Unions offer much more and members actually have a say. Canada also has bank account protection through Canadian Deposit Insurance Corporation which applies to each account up to $100,000 but Credit Unions have protection up to and beyond $200,000 for each account.


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## MoonRiver (Sep 2, 2007)

I do all my banking with an online bank. The only problem I haven't figured out yet is how to deposit cash. I'm sure there's a way. Checks are easy. If they are under some dollar amount, you just use the phone app and take a picture of front and back of check. Over a certain amount, you have to mail it in.

I use my credit card to get cash if needed. At places like Walmart you just buy something, pay with your credit card, and get extra cash. I haven't had a local bank account for several years. I probably write less than 5 checks a year as I use online bill pay for everything.

Another nice thing about online banks is their service department is geared toward online customers. Kind of like Amazon vs local department store. At Amazon you get quick service for most problems - at local store you never know what the service will be like that day.


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## HermitJohn (May 10, 2002)

I changed banks several times without withdrawing a penny when banks went merger happy. Every couple years some bigger bank would buy out the one I banked at. Now they are fee happy. All kinds of nitpicky gotcha rules to generate ever more fees. I went to online only bank called Ally Bank. I have had zero problems and zero fees. They belong to one independent chain of ATMs but they will reimburse you on fees charged at any ATM, used to upto $20 a month, think now that they belong to chain of ATMs, its down to like $10 a month. The only downside is you cant deposit cash money and they are super picky about accepting money order deposits.


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## Bearfootfarm (Jul 13, 2006)

I see no reason to deposit cash unless you have some huge amount.
Just spend it instead of using credit or debit cards.
Keep some on hand for emergencies.


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## crehberg (Mar 16, 2008)

Zuren, I don't see anything wrong with it. So long as it is FDIC insured...it's probably just as safe 500 miles away as 5!


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## Hiro (Feb 14, 2016)

I've been using Discover Online Bank for many years and have been quite satisfied with it. Our regular bank is a local credit union, but the backup is Discover Bank.


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## Fishindude (May 19, 2015)

I'm not a fan of online banks either. I want a brick and mortar bank in my hometown where I can go in and talk to a human.
Also like the fact that I personally know the people that work in my bank.


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## mnn2501 (Apr 2, 2008)

When we moved from Florida to Texas, there were no branches of our bank in Texas. We both had/have direct deposit and used ATM's for our cash needs. The few times we got a check we mailed it in (before the take a picture app came out). We lived like that for 10 years until merger madness happened and our account was moved once again and now we have locals again.

I'm fine with 100% online -- I've only been inside a branch once in the last 20 years. Due to mergers I've had accounts with 3 different banks during that time. I still like the first one the best though.


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## Meinecke (Jun 30, 2017)

We have our eggs in online nests...and def get more dough out of it than our branch is even considering


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## newfieannie (Dec 24, 2006)

my friend had a portion of his money at Achieva out in alberta or something like that. all online but I had no idea how to do that so when he passed I had everything transferred to my bank. like Em said the banks are a joke!. I wish I hadn't done it.I'm not making half as much as he was. I mentioned the credit union to my financial planner last time I was in but she did say it wasn't a good idea. I do have the automatic banking and my checking account. that's a good thing for me but I'm sure I'm losing out on the bulk of my money. ~Georgia


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## mnn2501 (Apr 2, 2008)

newfieannie said:


> I mentioned the credit union to my financial planner last time I was in but she did say it wasn't a good idea.


Why did she say that? Credit Unions are insured just like regular banks are.


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## Tnff319 (May 28, 2012)

mnn2501 said:


> Why did she say that? Credit Unions are insured just like regular banks are.


Probably wants to put that money in something that's generates a fee for her.

For those opposed to online banks, what's your reasoning?


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## Esteban29304 (Apr 29, 2003)

Local banking ;

Pro ; I like local banks because I do some cash business, they are convenient, & friendly.

Con; I don't like local banks because they pay such low interest . If you keep a tidy sum in the bank, ask the manager for a better rate. They may increase it

Online banking;

Pro; I like online banks for convenience of depositing checks, checking balances , & paying higher interest rates .

Con; I don't like online banks because I have to call or e mail, if I need to talk to someone, have a problem , or a question. I had rather do that face to face. 

If you do the math, the differences in interest rates , while it seems substantial , does not accumulate to much money, unless you have a sizeable balance in an account. 

What do I do ? This is NOT suggested for everyone due to their different situations. I am single , no debt, need very little money for living expenses, medical care, or emergencies. Therefore, I do not keep a large " slush " fund with a local, OR online bank . Once my savings get above a certain amount, it is transferred to an investment account which can earn some REAL interest. Yes, it is a gamble without any guaranteed rate. This has done very well for me for the last 20 years . If I need some money quickly, a quick phone call & my investment account can transfer the money to my bank , usually the same day. .


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## MoonRiver (Sep 2, 2007)

Here's an update on how I deposited cash to an online bank. I had to call the bank 3 times before I got instructions that made sense.

Get a money order (which looks like a check). I got mine at post office. The max for 1 money order is $1000, so if sending more than that, you just get as many money orders as needed.

Then you fill it in like a check. In my case, I made it out to myself and put my acct # in the memo field. Then I endorsed it on the back, wrote for deposit only, and wrote my account # again. I included a deposit slip even though the bank hadn't said I needed to. Then mailed it to the bank.

It cost me under $5 for money orders. It's dependent on how much cash you are sending.


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## weaselfire (Feb 7, 2018)

Online banks are one of those things I just don't need. I don't have enough in an account to worry about interest rates and, if I did, the car would find out and some major part would fail. I also don't order pizza from an app, pay for stuff with my cell phone or order curb side delivery at a drive through.

If you find a reason for online banking, go ahead and use it. You have my permission to use your money however it works for you. Or even order your pizza from an Amazon listening post.

Jeff


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## HermitJohn (May 10, 2002)

weaselfire said:


> Online banks are one of those things I just don't need. I don't have enough in an account to worry about interest rates and, if I did, the car would find out and some major part would fail. I also don't order pizza from an app, pay for stuff with my cell phone or order curb side delivery at a drive through.
> 
> If you find a reason for online banking, go ahead and use it. You have my permission to use your money however it works for you. Or even order your pizza from an Amazon listening post.
> 
> Jeff


And you have my permission to use a local bank and either have a huge running balance or pay a monthly service fee, plus lot other fees. Only reason I went to online only bank is they didnt try to nickel and dime me to death. But each to their own.

No bank is paying serious interest on cd's let alone passbook or checking. Usually tiny fraction of one percent on those and generally not much above 1% on cd. They can borrow all they want from Fed for free so they dont need to compete for chicken feed deposits of individual savers.


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## Alice In TX/MO (May 10, 2002)

I bank with two VERY small hometown banks. No fees. 

Ever.


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## HermitJohn (May 10, 2002)

Alice In TX/MO said:


> I bank with two VERY small hometown banks. No fees.
> 
> Ever.


Or large balance required? If no minimum balance and no fees, then maybe your bank should open branches here. Here any small bank doing well gets taken over. And they have to pay for that takeover somehow, apparently not through loans, but fees on existing customers. 

I did find one local bank offering a senior citizen checking (monthly service fees for everybody else) with no minimum balance and no service fee, their online website sucked (yes most local banks have a website). And you guessed it, year later they were bought out and no more free senior checking. I got tired of the merger mania and the fee happy buisiness models. The online bank, no minimum balance, no fees, and thats for everybody not just seniors.


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## Alice In TX/MO (May 10, 2002)

Yeah. None of that.

One main bank. One branch in nest town which is ten miles away.

The other bank is ten miles away, in the other direction, in the town of 488 people. I think they have five branches now.

Both personal and business accounts.

No fees.


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## Hiro (Feb 14, 2016)

HermitJohn said:


> And you have my permission to use a local bank and either have a huge running balance or pay a monthly service fee, plus lot other fees. Only reason I went to online only bank is they didnt try to nickel and dime me to death. But each to their own.
> 
> No bank is paying serious interest on cd's let alone passbook or checking. Usually tiny fraction of one percent on those and generally not much above 1% on cd. They can borrow all they want from Fed for free so they dont need to compete for chicken feed deposits of individual savers.


Ohh, borrowing from the Fed isn't how they make money these days. They put their excess reserves at the Fed and the Fed pays them for doing so. Check into those apples.....


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## Esteban29304 (Apr 29, 2003)

My hometown bank is independently owned & there are no fees, either . Free checks to seniors/vets as well. Last year, they imposed a $5 monthly fee on savings accounts that had less than $5000 in them. There was such an uproar , that they dropped that & refunded the money.


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## Lookin4GoodLife (Oct 14, 2013)

Like HermitJohn, I use Ally. I use a local bank for deposits and stuff, but I then transfer most of it to Ally. Only had a couple problems over the probably 10 years I've been with them and they were resolved very quickly.


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## 4tu (Jul 24, 2018)

I find local banks are no longer what they used to be, years ago I spent time in other places and if I needed money I could just call my branch manager president or vice president, and have money transferred to anywhere in the world to any bank. The local bank I never know the people, I used to know all the counter people by name now they move them around and it's like they don't want to know you. back when they knew my voice and if I needed a balance or to shift money to another account would not be a problem.

With all the information technology we have less useful information and no real interpersonal activity or relationships. I love the youtube videos where people are so intent on their phone they walk into objects I wish they would walk into traffic more often. I watch a man on the feeder almost roll his truck off the embankment between the freeway I was on, and him on the hill actually jumped the curb threw up some dirt and he grabbed the wheel corrected it and went right back to texting. the complete ignorance of the human race Leeds me to the only observation possible, the end is near.

Agenda 21 wants to eliminate 6 put of 7 people on the planet, problem is that is done indiscriminately almost by accident let's say, when we have plenty of good reasons to take them out of the gene pool now otherwise by default the better equipped more useful and intelligent would be taken out as well . Instead of putting hi color barrier tape around a hole put in a spiked plate, instead of safety meetings a pamphlet. I am reminded how dumb people are when I go into a public restroom --- employees must wash their hands -- well how do they know -- the management doesn't I look at the hands of my server if their nails are not clean and they look unkempt I leave.

Ally bank is excellent and they have phone help lines at all hours when I need them.


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## HermitJohn (May 10, 2002)

Long ago I needed a signature guarantee to make withdrawl from a mutual fund. Dont see this much anymore, but it was intended more to keep people from making frequent withdrawls than it was for any kind of security. My bank was state chartered so couldnt do it. I went to one down street expecting to pay a fee. Instead I got personal attention from manager and no charge. Seriously I considered moving my account there. I had never gotten that kind of personal service. But you guessed it, got taken over by one of the national fee happy mega banks that could care less, they dont have to, they are too big to fail.


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## oldtruckbbq (Aug 8, 2016)

I've had an account with Schwab for several years now. I don't pay a monthly service fee, and they reimburse any ATM fees I'm charged when using my debit card. I have it linked to the bank account where our paychecks are deposited so I can transfer money back and forth as needed.

We have had a checking and savings account at a regular bank since 1996. When we moved from Texas to OK in 2007 my wife checked to see if we could save on monthly fees by switching to a different type account or different bank. Our bank doesn't offer our type of account anymore, and doesn't have anything with a fee that low. Our savings account has no fee with a $400 balance. When we moved to MO, the closest branch is over 5 hours away. Not a big deal unless we need a big chunk of cash for something or have a chunk of cash to deposit. We are able to deposit checks at both banks using their phone apps. Those times we have had cash to deal with, we just kept track of it and used it for purchases we normally would have made with the debit card.

Remote banking has worked ok for us for several years now. Many people that I work with don't even like the idea of direct deposit instead of a paper check that the deposit themselves and won't use a phone app at all. Depends on your comfort level. Seems like banks are all pushing higher fees and less personalized service anyway.


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