High Yield Checking Account Interest Rates Hold Up Better Than Savings

High yield savings account interest rates took a hit again this week (Feb 16) with a majority of the major players again reducing returns. However, high yield checking account returns have held up better. Bankdeals.blogspot.com reports this week that there are still plenty of good returns to be found with high yield checking accounts. Below is a list of places that you can still get a good deal from Bankdeals. The site also has a ton of information about the highest CD, savings, credit union yields, and bank account bonuses for the rate chasers out there.

• 6.01% Reward Checking at Air Academy FCU
• 6.01% Reward Checking Account at Charter Bank
• 5.51% Reward Checking Account at Provident Credit Union
• 5.09% Reward Checking Account at Consumers Credit Union
• 5.01% Reward Checking Account at State Bank of Toledo
• 5.01% Reward Checking Account at Connexus Credit Union
• 4.44% Reward Checking at First Arkansas Bank & Trust
• 4.00% Reward Checking Account at First National Bank

PS: Before you jump to a new account for what could be a teaser rate it's a good idea to crunch the numbers with a rate chaser calculator to see how long it will take for that new rate to pay off.

Schwab Offers High Yield Checking Account

Schwab has thrown its hat into the high interest checking ring recently. For those of you with Schwab brokerage accounts their "Schwab Bank High Yield Investor Checking" may be a convenient addition to your portfolio. A quick look at the account's stats show the following:

Rate: 4% variable APY.
Min: No account minimum.
Fees: No service charges or fees.
ATM: Unlimited ATM fee reimbursement.
FDIC: FDIC insurance up to $100,000.

I think it looks like the high-yield checking is a solid offering from Schwab. For starters, it beats the Electric Orange account from ING in terms of interest rates and features. Additionally, the Schwab money market is paying 4.32% (7-day avg as of 1-20-08), which means that if you give up .32% interest you can gain FDIC insurance and no minimum. A checking account isn't a great place to stash money in terms of investment opportunities, but if you have short term cash or carry a larger than average checking account balance it might be a good thing to look into.

Does a high yield checking account have a place in your portfolio, do you use a money market account with check writing, or just a plain old checking account?

Image: liewcf @ Flickr

Poll This Week: Which Online Broker is Best?

After reading a few articles recently reviewing which online brokers are best at Forbes and Smart Money, I wanted to know what everyone else out there thought. This week I'm polling everyone out there about which online brokerage they think is the best. I added all of the companies that I could think of off hand to the list. If you come up with another you think I should add, leave me a comment and I'll get it up there ... please choose which one you think is the best.

Links
Image - Flickr Hugovk (creative commons)

Review: E*Trade Complete Savings Account

Now that I have been using E*Trade's Complete Savings Account for a couple months the time has come to give a little review of the service.

For a little background, E*Trade introduced the Complete Savings Account in the not-so-distant past and it operates VERY similar to the other online savings account providers out there like HSBCDirect, INGDirect, or Emigrant. The account offers a 5.05% APY compounded monthly and can be linked to outside bank accounts or any account you may already have with E*Trade. I have had, or currently have, accounts with HSBC and ING so I will compare them to E*Trade as I go in this post.

Opening an Account

It took about two weeks for me to open an account. I filled out the online form and about a week or week and a half later had the registration forms. You sign the form and mail it back to the bank within 7 days and you are all set. Not as sleek and fast as ING, but a lot better than HSBC.

The Interface

(click the picture to enlarge)

E*Trade's Complete Savings Account has a nice clean interface. Things are easy to find and it is painless to add linked accounts. Those of you who have or have had E*Trade accounts in the past (regardless of how unhappy you were with customer service) will likely enjoy it.

Transferring Funds

(click to enlarge)

This is where the E*Trade Savings Account really shines. The company has chosen not to nickel and dime people by putting a hold on transferring money. While companies that hold transfers don't really cost you anything in real terms, the are profiting off the float on your money that could be going to you. The transfers I have made are done within 1 business day! Zero days of lost interest. ING is usually pretty good around 2 business days, and HSBC is pretty terrible taking substantially longer.

It's also really easy to add linked accounts. I should be with any service, but you can instantly validate accounts with E*Trade if you are willing to divulge your online user name and password for the account.

The Rate

E*Trade is paying 5.05% APY which isn't terrible, but there are plenty of other players in the mix now. ELOAN is consistently above 5% (5.25% right now) and many of the traditional banks like WaMu are offering similar services with competitive rates. The company has been offering a $25 sign-up bonus which as far as I can tell is still effective. Check out my former post on the bonus and try some of those codes to see if you can still snag the $25. UPDATE *I found a link to the bonus and it is now at the end of this post*

Fees

None, just keep at least $1 in the account.

Overall

I have had some bad experiences with E*Trade as a brokerage which I will write about some other time. However, I'm happy to say my experience with E*Trade's Savings Account has been good so positive. Of course I haven't had to use the customer service for much which has been the brokerage's main downfall.

Pros:

• No minimum, $1 to open, no fees, sign-up bonus of $25, FDIC insured.
  
• No hard credit pull to open the account.
  
• 5.05% APY is good but not the best.
• Blows competition away when it comes to transferring funds in an out of the account.
• Links to other E*Trade accounts if you choose
• If you have $5,000 or more in deposits you can get a checking account with ATM card as well.
  

Cons:

• Variable rate (but it is with any of the online savings accounts so far as I can tell).
• You can get a better rate other places if you look around, especially if you have more money to park in one of these accounts.
• When dealing with E*Trade brokerage I have run into some of the worst customer service experiences I have had anywhere. I'm not sure if they share customer service departments, but keep this in mind. With HSBC I have had decent customer service and INGDirect has some of the best I have ever had when I have contacted them.
• You might be able to get a comparable rate at a local banking branch where you already do business, especially if you have a significant amount to invest.

Link: E*Trade Complete Savings w/ $25

CitiBank Direct Ultimate Savings Bonus

I just saw an Adsense advertisement that CitiBank is currently offering a $50 bonus to people opening up a CitiBank Direct Ultimate Savings Account. While the rate isn't that stellar at 4.65% APY, the $50 bonus is pretty nice. Might be worth it to open an account with $1 to get the bonus. You can always close the account later or transfer the bonus out and leave the $1 seed money there.

The bonus is credited within 90 days. I couldn't find anything that says you need to keep the account open "x" number of months. I haven't used CitiBank's online banking service so I can't tell you how the interface or transaction speed is.

Direct link to the promotion page here.

E*Trade Free $25 Savings Sign-up Bonus

E*Trade has a promotion running for their new high yield online savings account. If you open account and fund it with $1 (the account minimum) they will give you a $25 bonus. Not too bad of a deal considering you only have to chip in $1.

The account pays 5.05% which puts in a good position to compete with what the other top online savings accounts are paying out right now. The biggest benefits (aside from the free cash) is that the transfers are really fast in and out. I have complained ad-nauseum about the lag time for HSBC and have been happy so far with the responsiveness of E*Trade's online account. As with all reliable online savings accounts this one is FDIC insured up to 100,000 too.

Link
E*Trade $25 Savings Bonus Promotion

Choosing an Online Broker

The Motley Fool has a decent article describing the best places to invest if you have an extra $20, $100, or $1,000 lying around. I think the article is good because it gets people thinking about investing incrementally. It's easy to invest if you already have gobs of money in your pocket. It's much harder when you are starting with a pair of Hamiltons in your wallet.

The article operates under the assumption you have paid off all your high interest debt from credit cards and other not-so-favorable investments.

• If you have $20: The Fool says to consider investing in a DRP (a plan some large companies have allowing employees to purchase stock). That is good advice, but for those of us not working at a fortune 1000 company where else could that $20 be put to work? Regular visitors to the site know I'm a big fan of high yield online savings accounts. They won't make you rich, but are flexible, a good value, and generally have no minimums.
  
  
• If you have $100: The Fool says to consider investing in an index fund. The rub on this type of investment is that you may have that investment chewed up by broker fees. If you get charged $10 to buy the fund, then another $10 a year until your account meets the brokerage minimum, you will have to make more than 11% per year (on the $90 invested after commission) just to stay even. Again I think $100 is better spent in a high yield savings unless you already have a brokerage account up and running. In that case the index fund can start to make more sense.
  
  
• If you have $1,000: Here you have more options. The Fool says a good option is a discount brokerage account charging less in commission than 2% of portfolio value. I think another excellent option is a Roth IRA account. There are plenty of fund families that are no load and if you couple that Roth investment with additional funds each year until retirement you will have a nice little next egg when you turn 65.

Check out the article here for the full scoop