Your Money_ The Missing Manual - J. D. Roth [67]
Capital One: www.capitalone.com or 1-866-871-7932
Citibank: www.citibank.com or 1-800-374-9700
EverBank: www.everbank.com or 1-888-882-3837
HSBC Direct: www.hsbcdirect.com or 1-888-404-4050
ING Direct: www.ingdirect.com or 1-800-ING-DIRECT
For a more complete list, check out MoneyRates (www.money-rates.com) or BankRate (www.bankrate.com). At Get Rich Slowly, I've compiled a list of online banks that offer high interest rates and good security: http://tinyurl.com/GRSbanks.
It's easy to try an online bank—you're not stuck with the first bank you choose. Sign up for an account at one, give it a spin for a few weeks, and if it doesn't meet your needs, then move on to something else. Take the time to find a bank that works for you.
The Right Bank for You
I opened my first bank account the day I started college. I had two options: a bank that offered free checking and a bank that was handing out Frisbees. I chose the Frisbee, as did many of my classmates. The bank knew college kids couldn't resist free toys.
My new checking account came with a $5 monthly service charge. I didn't think much about it; after all, my parents had always paid a monthly service charge. No big deal, right?
I paid that "no big deal" for more than 15 years, even after the bank upped the charge to $8 a month. I asked them to waive it a couple of times, but they wouldn't. Eventually I wised up and switched to a credit union that didn't charge a monthly fee—but not before I'd paid that first bank about $1,500 for the "privilege" of banking with them. And all because I wanted a "free" Frisbee.
I'm not the only sucker out there. Banks give away all sorts of stuff to bring in new customers: iPods, gift cards—you name it. But as I learned the hard way, you should never choose a bank just because it's giving something away. Instead, pick a bank based on things that matter, like:
Convenience. How convenient is the bank? What are its hours? Where are its branches? How easy is it to find an ATM?
Fees. What sorts of fees does the bank charge? What's its policy on overdrafts? Does it offer free checking? Free online billpay? Free access to canceled checks?
Service. How's the customer service? Ask your friends and family, and check for reviews online.
Internet banking. Is the website easy to use? You may have to hunt around online to get info on this or go into a branch and ask someone to give you a demo.
Rates. What kinds of interest rates does it offer on savings accounts and CDs? (If you'll soon be shopping for a mortgage or other loan, check those rates, too.)
Values. What about the intangibles? For example, many folks are willing to sacrifice a few percentage points or pay extra fees to put their money in a community development bank (Choosing a Bank). Make sure the bank's philosophy matches yours.
And remember: You're not stuck with a bank forever. Shop around. Don't stay with a bank simply because it's the one you've always had if other banks are offering better rates or lower fees. There's no reason to settle for crappy service at a crappy bank.
Tip
If you serve (or have served) in the U.S. military, be sure to check out USAA (www.usaa.com), a sort of financial clearinghouse for veterans. USAA has excellent customer service and offers banking, insurance, and investment products at competitive rates.
After you've figured out what kind of bank would work best for you, there's one other important factor to consider: What kinds of accounts the institution offers. The next few pages explain what to look for.
Finding Accounts That Meet Your Needs
The other half of the banking equation is accounts. Even if you find what seems like the best bank in the world—one with convenient locations, long hours, and a wonderful website—if its account options don't meet your needs, you're better off somewhere else. This section gives you an overview of the most common offerings and explains the pros and cons of each.
Types of Accounts
Picking a bank account is like choosing the