Best Interest Rate Banks

This little public service reminder is for all the folks who have an account at HSBC Direct. HSBC Direct’s rate of 3.50% APY is set to expire on September 15th, 2008. We don’t know yet what the new rate will be but the expiration date is a mere week away. The last time they extended the rate, they announced it at least a week ahead of the expiration date, so it stands to reason that the rate may slip from that 3.50% APY number.

While no high yield interest rate on any savings account is set in stone, they aren’t CDs, the other banks with high rates include Washington Mutual with a savings & checking combo offering 3.75% APY and FNBO Direct’s savings account offering 3.50% APY.

Need a little trivia pick me up on this Labor Day shortened week? Check out these 50 Fun Facts About Banks!

One of the first things you do when you open a new online bank account is to establish an external transfer link between your new account and an existing account. When I opened my FNBO Direct account, I immediately linked it to my daily checking account so that I could pull some money in and get that hot 3.50% APY. For most, the process stops there. If you ever need money to go into FNBO Direct or to go back to the checking account, you can simply log into FNBO and initiate the transfer.

99.999% of the time, that’s perfectly fine. But for that 0.001%, if the FNBO website is down, you will have no access to those funds via the Internet. If you can’t log in, you can’t transfer your funds. You could always call and initiate the fund transfer that way, but oftentimes the site itself is down and you’ll have to scrounge up the number some other way. You’ll also have to get your account number somehow too.

Here’s a better way, establish the link from the other side as well. So if you have a link between FNBO Direct and ING Direct but it’s only created on the FNBO Direct side, just create it again on the ING Direct side if you can. ING Direct is picky about their links but other banks won’t be, so establish a link out that way you can still get access if you need it.

99.999% of the time, the sites will be fine. But you never know when a little hiccup can put you in a bad spot.

ATM fees are insidious. You’re stuck in a bad spot, you need some cash, and the only thing separating you between much needed money and you are two ATM fees. When you use an out-of-system ATM, one that isn’t linked to your account by either the network or the bank, you will often pay two ATM fees. The first is a fee to the ATM owner and the second is a fee to your bank to initiate the transfer. The ATM machine only notifies you about their end of the fee, so that $3 or $4 is just part of the story. When you check your balance, you’ll often see that your bank has charged you its own fee.

Here are some tips on how to avoid these fees (outside of the obvious of not using the ATM in the first place).

No ATM Fee

Some banks will not charge a fee if you use an ATM that isn’t there. The downside of this is that you only avoid one side of the ATM fee, your bank’s side. You are still on the hook for the ATM side. Some banks will refund you all the fees, including the ATM fee, so try to find a bank that offers that and you’ll be in the clear.

Use A Huge Bank

By huge I mean a bank with a wide geographic presence, such as a Bank of America, as your primary checking account. By having a large coverage area, you’re often near a bank ATM and so you avoid those pesky fees. Simply link up that checking account with a high yield savings account of your choice and you can earn high interest rates but still retain the flexibility of wide ATM access.

Less than two weeks after their last rate increase, ING Direct has updated and increased their CD rates once again, with their 12-month Certificate of Deposit going from 3.70% APY to 4.00% APY: