Online savings accounts

yg17

macrumors G5
Original poster
Aug 1, 2004
14,888
2,480
St. Louis, MO
Are these worth it? They do have a higher interest rate than the standard savings account I have at my bank. I have about $10,000 in my savings right now (which I use to pay tuition and rent, so it will eventually go down. Damn expenses :() so I suppose over time, it would net me a small chunk of change. Specifically, I'm looking at the HSBC one (I have a credit card with them and they've served me well, so I figure they're a good place to start).

How is interest paid out on these things anyways. I know the APR is around 5%, which is somehow computed as a percent of your average daily balance, but I couldn't find anywhere on the site that says how often they pay out interest. If I don't see anything for a year, then I don't know if I'll do it. But if I get even a measly 10 bucks each month that can help pay the rent, then I'll be more inclined to sign up.
 

martin1000

macrumors 6502
Apr 16, 2005
263
3
Washington, D.C.
I have an ING online account and I think it is great!

They pay interest out monthly.

With ING, you connect another bank account to the ING account. You can then add money to ING through this other bank account. Or, you can then remove money from the online account and put it back in your other bank account.

Because of the higher interest rates, I would definitely suggest going this route.
 

imac/cheese

macrumors 6502a
Jun 7, 2007
555
1
If I recall correctly, the ones I was looking at paid out monthly.

HSBC has a 5.05% APY which is annual percentage yield. When they quote APY versus APR it usually means they are paying out interest at least monthly. This assumes that the interest you make each month is left in the account and you earn interest on your interest.
 

atszyman

macrumors 68020
Sep 16, 2003
2,442
1
The Dallas 'burbs
If you are going to be doing a lot of transfers into/out of the account you might want to see how Federal Regulation D applies.

I ran into it the hard way and it cost a bit of money. Basically it limits the number of electronic/automatic transfers to/from a savings/shares account to 6 transfers in any calendar month. Accidentally led to a bounced check and some credit card late fees but it could have been worse.
 

jaydub

macrumors 6502a
Jan 12, 2006
797
2
I currently have an online savings account with FNBO, which is the First National Bank of Omaha. They are FDIC insured, and I've currently got a 6% APY.

I signed up a few months back, and it's been pretty easy. I had ING before and the sign-up process was easier than with FNBO, but it was about 2% lower APY. The sign-up process for FNBO was a little more difficult, but the higher APY was worth it.

www.fnbodirect.com
 

r1ch4rd

macrumors 6502a
Aug 5, 2005
980
1
Manchester UK
You've got a decent chunk of change there so you want to get the highest rate you can. At 6% a year you are looking at around $600 year (obviously) so thats about $5 a month (this is probably a bit simplified). It's not a huge amount but it is essentially free money and I wouldn't mind an extra $600 a year.
 

Kwyjibo

macrumors 68040
Nov 5, 2002
3,809
0
You've got a decent chunk of change there so you want to get the highest rate you can. At 6% a year you are looking at around $600 year (obviously) so thats about $5 a month (this is probably a bit simplified). It's not a huge amount but it is essentially free money and I wouldn't mind an extra $600 a year.

perhaps $50 / month?
 

adk

macrumors 68000
Nov 11, 2005
1,937
21
Stuck in the middle with you
HSBC usually pays interest monthly. Usually I get my interest added on the 14th or 15th of the month. Once last just for some reason they paid me interest for only a two week period.

My only gripe is that aside from the ATM card you get, it takes three days to get money into or out of the account.