BusinessWeek just posted an interesting article regarding Citibank's high interest savings account -- it's paying 4.5%.
The key take away is that you need to open an EX checking account and have one of the following three conditions to avoid fees:
- two transactions a month
- automatic payroll deposit
- a minimum balance of $1500
They're not really competing with the pure savings nature of Emigrant and other on-line players.
Gateway had offered a regular checking account with a low balance and nice interest, it was called their low balance with interest checking account. If you had $500 in it, you would earn 2% interest. Not bad for a regular operating account. They've since backed away from that and dropped the interest precipitously. Same mentality as Citibank. Now you have to put your money in a WON account and need about $2500 balance in order to earn 2% or more interest. Once again, quite disappointing.
I imagine the move will be very unpopular with many customers.
They have the second highest interest rate and the highest non-promotional interest rate, however, they can't initiate EFT fund transfers between two different banks like most of the more mature on-line banks can. This is a very big annoyance. For example. You get a bonus and want to move cash from your local bank A to Umbrella Bank. Now you have to either wire it in for $20-$40 in fees or mail it in and wait for it to be processed. Think of all that lost interest.
Hmm...maybe things have changed. They told me by e-mail they couldn't initiate an EFT transfer, but now I just saw the following text on their website:
Transfers from a Money Market account to another account, or to a third
party financial institution, by preauthorized, automatic, telephone or computer
transfer are limited to six per statement cycle, with no more than three by
check, draft, or similar order to a third party. If the account exceeds six
transfers in a statement cycle, a fee of $10.00 will be imposed per transfer.
I've sent them an e-mail requesting if things have changed. If they have, bye bye emmigrant, hellow umbrella.
Have a wonderful Saturday,
Making Our Way