Best overall Internet Bank?

[jjflyman]

With dozens of Internet Banks out there now, It seems like they all have good points and bad points, some have the best savings interest rate, some have the best rates on a certain length CD, others on different length CD's. Currently I have accounts at Ally and Synchrony. I am happy with both, but neither one has the top rates. I was curious on what Internet banks others are using and are happy with.

 

[JustCurious]

I use Charles Schwab Bank and I have nothing but good things to say about them. Great website, great mobile app, great 24/7 U.S. based customer service, great products. I especially love their online customer service chat feature that is available 24/7, I like being able to type a question on my computer and give the rep time to think about an answer and type a response without having to call and talk to someone and wait on hold.

As a bonus, even though they only have one physical bank location (I think it is in Nevada), they have lots of brokerage locations where you can go and talk to someone face to face if you need to, although it is unlikely that you ever will. The brokerage offices are not banks, they don't give out or take cash, but they can otherwise handle most Schwab bank related needs. I dumped my local brick and mortar credit union and I haven't looked back.

 

[braumeister]

There is no one bank that fits everyone for every need, so you'll have to pick and choose the features you want.

I use six different banks for different reasons. It doesn't cost me any more to have things spread around that way, and if one of them went south I could still do what I needed.

 

[Luck_Club]

Pinching pennies... for nothing

OK so I've recently opened a brokerage cash management account through fidelity. This was after reading a book called IIRC "safe Money". The book advised to dump your brick and mortar bank for a brokerage checking, which would pay a higher rate on the float.

Did a bunch of research, and decided to KISS so went with a fidelity account. Fast forward. The clearing position is 0.19% not the SPAXX rate of 1.2%. So every deposit requires a manual move to the higher account. Then a move back to pay a bill or make a transfer.

So basically assuming you have about a $10,000 average monthly balance. You will be doing a ton of work to make that extra $100. Is it really worth it?

On the positive side it made it easier to put extra cash to work in T-Bills. However, I don't think it will work for my everyday banking.

 

[JustCurious]

OK so I've recently opened a brokerage cash management account through fidelity.

Note that a cash management account is not the same as a bank checking account. A cash management account is provided by a brokerage, whereas a bank checking account is provided by a bank or a credit union. Schwab bank is a separate entity from the Schwab brokerage. They are related, and they do work together, but they are different entities. One is a bank, and the other is a brokerage.

 

[Done]

I've been happy with Alliant Credit Union for two years. Anyone can join with an online $10 donation to Foster Care to Success.

Savings currently pays 1.45%. 1-day electronic transfers.
Checking pays 0.65% as long as you have one monthly direct deposit. No minimum balance.
Free overdraft protection from savings to checking so you can mostly be earning the savings rate.
Visa debit card with ATM fee refunds, up to $20/mo.
Visa Signature card pays 3% cashback with no fee the first year, then 2.5% cashback with $59 annual fee thereafter. No FTF.
24/7 phone support.

Their website feels dated, but it's functional. Phone app is pretty good. Branches are only in the Chicago area, so it's effectively an online credit union.

 

[brucethebroker]

With dozens of Internet Banks out there now, It seems like they all have good points and bad points, some have the best savings interest rate, some have the best rates on a certain length CD, others on different length CD's. Currently I have accounts at Ally and Synchrony. I am happy with both, but neither one has the top rates. I was curious on what Internet banks others are using and are happy with.

+1.
The thing about Ally and Synchrony is that they both usually seem to be on the high end of the savings rates-not using bait and switch.

Do any of you know of internet banks with similar track records? Or any to avoid?

 

[braumeister]

+1.
The thing about Ally and Synchrony is that they both usually seem to be on the high end of the savings rates-not using bait and switch.

Do any of you know of internet banks with similar track records? Or any to avoid?

I've been very happy with an online savings account at Discover Bank for many years now.

If you travel, my debit card from Schwab Bank lets me get local currency from an ATM at no cost.

And for convenience, I use a true chip & pin card from First Tech that defaults to pin instead of signature, just like cards issued in Europe.

 

[Dtail]

I use Ally Bank. Although not the top of the savings rates, they are competitive with an easy to use web site and efficient customer service.

 

[OldShooter]

There is no one bank that fits everyone for every need, so you'll have to pick and choose the features you want.

I use six different banks for different reasons. It doesn't cost me any more to have things spread around that way, and if one of them went south I could still do what I needed.

+1 on the first sentence. I use the Schwab bank. As a bank. For a checking account backed with a reserve line of credit. I use their debit card which has no FTFs and which rebates all ATM fees including non-US ATMs. I can't imagine why I would want to have a savings account as I keep my cash-type assets in my investment accounts. On the rare occasions where I want to buy a CD, I buy it from the Schwab bond desk. So I don't worry about what Schwab pays on savings or CDs as I don't need either service.

For the very rare occasion where I need larger amounts of physical cash, I keep an almost-idle Wells account to which I transfer from Schwab, then go to a local branch to get the cash. Typically this is twice a year for $1 or $2K for an international trip, but I could do that with a few days of ATM withdrawals, too.

To the second sentence, though, I am totally amazed. @braumeister, what causes you to deal with so many banks?

 

[braumeister]

To the second sentence, though, I am totally amazed. @braumeister, what causes you to deal with so many banks?

Inertia?

Schwab for the debit card like many here. Foreign currency from ATMs at no cost.

First Tech for the true chip & pin credit card -- it gives such convenience when traveling.

Chase for a local B&M -- just like you do with your Wells account. Also handy if I need a notary.

PenFed for their CDs and just because I've been a member there forever.

USAA because I've also been a member there forever and it has always been my main checking account.

Discover for the online savings account -- a handy place to store cash and currently 1.55% so not a bad option.

And oh yeah, I forgot about the Fidelity cash mgt account. Love their 2% back credit card.

I know I should probably drop a couple of these but I really don't mind dealing with them all.

 

[audreyh1]

I have accounts at 3 internet bank high yield savings accounts, Charles Schwab bank checking (for travel), and 3 credit unions where I opened accounts online to buy CDs. And also a cash management (checking) account at Fidelity Brokerage in addition to my traditional Bank of America checking account.

This proliferation did not exist before 2010 and then when the temporary FDIC insurance on money market accounts expired. Actually looks like Jan 2013 was when I first opened an internet high yield savings account. By then money market funds at brokerages - yields had gone to zero, and CDs started to yield better than bonds, so I started branching out opportunistically.

 

[OldShooter]

Inertia? ... I know I should probably drop a couple of these but I really don't mind dealing with them all.

Well, we're retired. We have time and we need good hobbies!

 

[MandM]

OK so I've recently opened a brokerage cash management account through fidelity. This was after reading a book called IIRC "safe Money". The book advised to dump your brick and mortar bank for a brokerage checking, which would pay a higher rate on the float.

Did a bunch of research, and decided to KISS so went with a fidelity account. Fast forward. The clearing position is 0.19% not the SPAXX rate of 1.2%. So every deposit requires a manual move to the higher account. Then a move back to pay a bill or make a transfer.

So basically assuming you have about a $10,000 average monthly balance. You will be doing a ton of work to make that extra $100. Is it really worth it?

On the positive side it made it easier to put extra cash to work in T-Bills. However, I don't think it will work for my everyday banking.

Hi Luck Club, I also have started using Fidelity brokerage cash management since I retired last summer as my main banking. You can change your core account from the standard low rate that is setup to a new core account with higher rate. Under the Positions section click on the symbol and when it expands you have the option to "Change Core Position". I am using FZFXX FIDELITY TREASURY MONEY MARKET FUND at 1.24% current yield and it works just like the core account.


I also have the 2% Fidelity credit card that Braumeister mentions and it adds to this core account automatically everytime it hits 5000 pts.

 

[Luck_Club]

Inertia?

Schwab for the debit card like many here. Foreign currency from ATMs at no cost.

This was my initial thoughts on the fidelity account, only to find out after reading the disclosures that it had a foreign currency fee.

Does Schwab really convert to foreign currency no fee and at market exchange rates?

GOOD PROBLEM TO HAVE. Money spread out in a bunch of different places.

 

[OldShooter]

... Does Schwab really convert to foreign currency no fee and at market exchange rates? ...

It's been my understanding that it is Visa or MC that does the conversion at wholesale market rates, then they charge the card issuer a (roughly) 1% fee, which the issuer either eats or marks up and passes it to the card holder as the FTF.

 

[Luck_Club]

Hi Luck Club, I also have started using Fidelity brokerage cash management since I retired last summer as my main banking. You can change your core account from the standard low rate that is setup to a new core account with higher rate. Under the Positions section click on the symbol and when it expands you have the option to "Change Core Position". I am using FZFXX FIDELITY TREASURY MONEY MARKET FUND at 1.24% current yield and it works just like the core account.


I also have the 2% Fidelity credit card that Braumeister mentions and it adds to this core account automatically everytime it hits 5000 pts.

Thanks just called Fidelity. I opened the account backwards. I guess if I had opened a brokerage account, and then added the Cash Management Feature, I could have had it automatically pull from a brokerage at set levels, so it kept the account topped off so to speak.

The only core available the way I opened it is the FDIC account. However, I can move money into the FZFXX or even FZDXX which is yielding 1.62% or SPRXX @ 1.51%. But it is a manual transfer in both directions.

Given the schwab account has the international ATM, that looks like the path I should pursue, along with a BOA or Wellsfargo account for COLD HARD CASH. Not a big fan of ATM 20's.

The 2% is another tough decision. I've always had a 1% cash back card, and I use the card's annual report to keep expenses straight for taxes. I have to be very careful on switching since I already spend 40+ hours compiling the numbers for taxes, not having an annual report that can be imported into excel would be murder.

Always amazed at what I can learn from this site. Truly a gift that keeps on giving.

 

[OldShooter]

... Given the schwab account has the international ATM, that looks like the path I should pursue, along with a BOA or Wellsfargo account for COLD HARD CASH. Not a big fan of ATM 20's. ...

A couple of comments:

First, for international travel DW and I each carry a debit card for ATMs and a credit card, 4 separate issuers. Things are getting better every year, but we have had cases where one of the debit cards didn't work or only worked on a specific bank's ATMs. Hard to find ones, of course. I have also had issuers' fraud software block a card when we're traveling, even when I had contacted them ahead of time with an itinerary. Hence, two different debit cards and two different credit cards. Also, using credit cards at ATMs is apparently a cash advance and you get clipped interest from day zero. I have never tested this but I have read it.

Re hard cash, yes. We just got back from Myanmar and only new and like-new US $100 bills were acceptable for some payments. Lots of counterfeits out in the world, particularly overseas. So not only did I have to get the bills from the Wells teller line, I had to inspect each one. So the ATM's $20s aren't always an option, particularly for 3rd world country travel.

 

[Scuba]

Hi Luck Club, I also have started using Fidelity brokerage cash management since I retired last summer as my main banking. You can change your core account from the standard low rate that is setup to a new core account with higher rate. Under the Positions section click on the symbol and when it expands you have the option to "Change Core Position". I am using FZFXX FIDELITY TREASURY MONEY MARKET FUND at 1.24% current yield and it works just like the core account.


I also have the 2% Fidelity credit card that Braumeister mentions and it adds to this core account automatically everytime it hits 5000 pts.

Thanks for this tip, I will check this out tomorrow.

 

[Done]

The Fidelity Gold Visa check card does charge 1% FTF for debit purchases, but NO FTF for ATM withdrawals. They also refund any ATM fees. This has been my personal experience for years and it was recently confirmed again on FlyerTalk. https://www.flyertalk.com/forum/cre...real-world-experience-10-printerfriendly.html
They need to clear this up in the terms and market this better.

Fidelity Visa Signature charges 1% FTF but gives 2% cashback. I’m in the process of switching to the Alliant card I mentioned above that has no FTF and 3% (later 2.5%) cashback. I have a message in to Alliant to see if their debit card charges a FTF at the ATM.

 

[pb4uski]

....The 2% is another tough decision. I've always had a 1% cash back card, and I use the card's annual report to keep expenses straight for taxes. I have to be very careful on switching since I already spend 40+ hours compiling the numbers for taxes, not having an annual report that can be imported into excel would be murder. ...

40+ hours... wow!

I use Quicken and have my credit card defined as a Quicken account and periodically import transactions and categorize them so I have what I need for tax purposes.... since many of my credit card vendor transactions are repeated, Quicken remembers the categorization after I have done it once (but I can override the categorization if it is inappropriate)... then withint Quicken each category is mapped to a relevant tax line and at the end of the year I just run a report for the needed tax info. Much less than 40 hours.

Or worst case, just import cc transactions to an Excel workbook, tag those needed for taxes and then run a pivot table report.

 

[pb4uski]

I've been very happy with an online savings account at Discover Bank for many years now.

If you travel, my debit card from Schwab Bank lets me get local currency from an ATM at no cost. ...

+1 we have had Discover Bank for years and are happy with them... they seem to do a good job keeping their rates competitive... each time I start to think about looking around they seem to increase thier rates to be competitive again.

Our local bank ATM card is part of the Allpoint network which has no cost ATMs where we travel.

While many of our friends who snowbird have felt a need to set up a local bank account here in Florida, between mobile banking and the Allpoint network, we have had no need to do so.

 

[JustCurious]

Given the schwab account has the international ATM, that looks like the path I should pursue, along with a BOA or Wellsfargo account for COLD HARD CASH. Not a big fan of ATM 20's.

I use Schwab Bank exclusively and I am also am not a big fan of being limited by ATM 20's, and since I do not have any other bank accounts, which means I have no local bank account, here is how I deal with getting cash...

I learned that I can get a cash advance from the Schwab debit visa card (NOT a credit card) by going inside a local bank of which I am not a customer and using a teller, as opposed to going to the ATM. The benefit to getting cash this way is 1) you avoid the ATM transaction limit (which is usually $400 - $500 depending on the ATM), and 2) you can get whatever combination of denomination bills you want, whereas most ATMs only give you $20 bills, and 3) you do not have to pay an ATM fee. To be clear, this is NOT a credit card cash advance, this is a debit card cash advance, the money is withdrawn directly from your checking account and there are no interest charges. I was not aware that a debit card cash advance was an option until it was explained to me by a very helpful Schwab customer service rep. I should also note, based on my research, that most U.S. banks do offer debit card cash advances, but a few don't, including Citibank and Suntrust (again, based on my research, not based on personal experience). I can only say from my personal experience that there is a Chase branch close to me that does provide the service.

Regarding the cash advance fee, the local bank from which you draw money is still charging a fee through the visa cash advance system (although it is a debit card cash advance, it uses the visa cash advance system), and that fee is being paid by Schwab to the bank as a fee for using them to advance cash to you, but the difference is you as the customer do not see the fee and do not pay the fee, it is being paid behind the scenes between Schwab and the local bank. This is different from the situation where you use the ATM and you do have to pay a fee (usually $3) and then you get an entry on your statement for $303.00 when you withdrwaw $300 from an ATM, and then at the end of the month you get a $3 credit from Schwab for the fee. The benefit to using the card as a cash advance is for spreadsheet nerds like me, when you get a cash advance, you only see a $300 transaction on your statement and it is much cleaner from a bookkeeping perspective and there is no need to account for the $3 with another transaction to balance out your records.

Here is another tip: Some banks are now deploying newer more advanced ATMs that have higher cash limits, and allow the selection of different denominations of bills, not just $20s. For example, I recently went to a local Chase branch that has a newer free standing ATM inside the lobby next to the teller windows as well as an ATM outside built in to the wall of the building. A teller inside the bank explained that the cash limit for the outside ATM was $500 whereas the cash limit for the newer machine inside the lobby was $3,000. (I speculate that the cash limit was higher for the ATM inside the lobby because it was in a more secure location only accessible during normal lobby operating hours so there is a lower risk of theft or vandalism, and they want to encourage people to use the ATM instead of the tellers for more transactions, and it was clearly a newer machine with more features) I was able to use the inside ATM to withdraw cash over $500 and get different denominations, the only denomination that I wanted that it did not have was $50s, but I was able to go to the teller window after withdrawing my cash and exchanging some of the $20s for $50s.

 

[Car-Guy]

Another vote for Schwab here. I use it as a backup to my local brick and motor bank but I have no complaints with their services and wouldn't hesitate to use them exclusively if I ever dump my local bank. I had Ally a few years ago too but never used them very much. Their (Ally) customer services was good but so is Schwabs! Free (reimbursed) ATM's is a nice value add which I ofetn use. Some ATM's fee's I've used are as high as $5 per transaction. So a few ATM's transactions a month can add up. Free is good!

 

[Luck_Club]

40+ hours... wow!

That's just to prepare it for hand off to the accountant.
900 lines of credit card transactions, 3-4 checking accounts, misc bill pay records etc have to be reviewed. Then I need to allocate the purchases to rentals, business expenses, and personal.

It ain't easy being a boy named sue!