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Lazy Online Banking

May 4, 2007

This week’s reader question comes from Binary Dollar. He is covering the question of what to look for in an online bank account. My contribution wasn’t as thorough as some of the other answers because I setup our online bank account more on a whim than as a result of exhaustive research.

ING Direct
We keep our emergency fund in an ING Direct account. I wasn’t very scientific about the way I chose to go with ING over the other alternatives. A friend at work had a coupon that gave a $50 bonus for opening an account with ING Direct. I was sick of the 2% interest we were getting in our money market several years ago so I opened an account with ING Direct and moved the money over there.

Status Quo for Now
It seems to me that the biggest differentiator between different online savings accounts is the interest rate they offer. I considered moving the money from ING Direct several times to different accounts but the small rate difference wasn’t worth the time and hassle in my opinion. Our finances are pretty much automated as far as direct deposit, online bill pay, and automatic investments so I don’t like to mess with it unless I stand to save or make a good sum of money. For now I’m happy with ING Direct but I am going to look into 4-week T-bills and tax exempt money market funds that Sun and SVB suggest.

Ben

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Ben
Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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Written by Ben Edwards · Filed Under Personal Finance, Saving 

Comments

3 Responses to Lazy Online Banking

  • Jay
    May 9, 2007 at 2:07 pm

    Hi,

    I wish I can share my recent research and study on Online Performance of Banking and Financial Services

    Thanks

    Jay

  • Ben
    May 5, 2007 at 4:48 pm

    One of my friends as work has his mortgage through ING, he takes care of his own property taxes and homeowner’s insurance so he doesn’t have money languishing away in an escrow account all year.

  • The Happy Rock
    May 5, 2007 at 7:44 am

    I have the same story. I set up ING direct years ago, because of the free 50$. Needless to say, they have done their best to keep me there. I know there rates aren’t the best anymore, but frankly their service and reputation is what keeps me there. I know that they aren’t going anywhere. They don’t feel like they need to offer a cutting edge rate anymore, but I think that could keep them out of trouble in the future. We even have our mortgage through them now, and it is was a wonderfully easy process.

    Our finance process relies heavily on ING. We have probably a dozen accounts were we transfer money in and out monthly for property taxes, auto insurance, etc. Unless the other products can offer similar reputation, and significant advantages, I will probably stick around a while.

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