Making an online bank your primary bank
I’ve been banking with E*Trade Bank for almost 4 years now. I really can’t remember how I got along without them. People (especially older people) ask me how I use a bank that has no brick and mortar branches and no ATMs. The reality is it works out quite well.
How do you deposit money?
Two ways: ACH transfers and by mail. I primarily use ACH transfers and E*Trade excels at this. You can push money into and pull money from virtually any account with an ACH compatible routing and account number. They seem to allow unlimited number of links and you don’t have to send them a check like other institutions like ING or EmigrantDirect. To deposit money by mail, simply stuff you checks into an envelope and stick on a provided address sticker and postage. 4-5 days later your funds are available in your account. In the past they provided postage paid envelopes but last time I called them for more they said they were discontinued, $0.41 is still less than the gas it costs to drive to the bank, unless you can walk to your bank.
How do you take money out?
Again ACH is great to get money to other accounts. To get cash go to any ATM. Don’t worry about fees because E*Trade will reimburse you immediately for any fees paid to the ATM. No more worrying about the $5 ATM fee on the cruise ship, in the casino, or in the local pub. No more worrying about stopping to get cash on your way out for the night as the machine at your destination is just as good as any. This is by far the feature I like most about this account. I even used the ATM card to get cash in Europe and received the best exchange rate of the entire trip and I couldn’t find any fee that was charged.
How are the interest rates?
Best in the business as far as I am concerned. Their high yield savings is currently 3.45% and a leader among online banks. They beat brick and mortar banks by a large margin. They don’t seem to have “loss leader” teaser CD’s like the brick and mortars but their CD rates beat non-promotional rates any day. An added bonus is that you don’t need to actually go to the bank to cash in a CD before it auto-renews, simply call them. Every brick and mortar that I have dealt with requires you to actually go to the bank to cash in your CD.
The one and only problem with the account?
There is no way to deposit cash. Honestly I never deposit cash anyway but for this reason only I have a checking account with Citizens Bank to fill the hole. I chose Citizens because they have supermarket branches that are open evenings and weekends unlike virtually every other bank, so it offers nearly the same convenience as E*Trade but at the expense of not earning interest on checking and not having a competitive high yield savings account.
