Make your money work for you. . . online

By Mir
August 22, 2006

You know you should be saving money, right? Everyone realizes that, although how much and where and all of that are separate issues. What you might not realize is that online savings banks are a smart choice for savvy consumers, both in terms of ease-of-use and interest rates.

I happen to use ING Direct. (No, I am not affiliated with them in any way. Just a happy customer.) There are other online options, of course, though I’ve been very happy with ING. Let me count the ways….

  • They gave me free money. I opened my account when they were running a special where new accounts were credited $100. I don’t think they’re running that same promotion right now, but they might do it (or something else good) at some point again.
  • Linking up to my local bank accounts was secure and easy. I transfer money between accounts without any problems.
  • The interest rate is much higher than what my local bank offers. Orange Savings accounts (at ING) are currently offering 4.35% APY. I forget what the rate was when I opened the account, but it goes up all the time. I get an email that says “Congratulations! Your rate just went up!” and I feel all warm and fuzzy, each time it happens. [And yes—I’m not going to give up local banking entirely, because there are good and reasonable reasons to be able to walk into your local branch and deal with a human, but for a savings account? This is fine.]
  • I get email alerts about other deals, like hot CD rates. It never occurs to me to check CD rates at the bank. But if I get an email telling me that rates are high on a 9-month CD, chances are good that I can find a little bit of money to throw that way.
  • Out of sight, out of mind. I don’t touch the money in that account, and part of the reason it’s easy not to dip into it is because I don’t see it all that often. I’m mucking around in and balancing my other accounts each and every month. I check into my ING account every few months (usually when I get a rate increase email) and just pat myself on the back and feel relieved to know that if I had some dire emergency, I’d have some money I could access.

Take a look at the online savings bank options. Do your research, and make sure they’re FDIC insured, and then start thinking about how you can save a bit more than you’re currently socking away. Even $5 or $10 each month adds up.

And I’ll tell you a secret. As addictive as shopping can be? Saving money can be even more addictive. Crazy, huh? I swear it’s true.


  1. I love online-only banking! Thanks to my husband’s stepdad, we have USAA, the military banking/insurance/everything-you-could-need group. They give me these envelopes for mailing in deposits that I can take to a UPS store and send *for free* overnight delivery. They give me back the money that ATMs suck off the top of my withdrawals. They give me a percentage back if I use my debit card as a credit card. When I had a fraudulent charge on my card, they immediately credited my account while they went to hunt down the perpetrator.

    If you still crave walking into a branch in your home town, probably the best “brick and mortar” banking option you can find is a credit union. It seems like you are much more of a human to credit unions than at most national bank brands. They also tend to have really good rates and deals for their members, too.

  2. I have been looking for a way to save some of the marketing money I make, what I good idea!

  3. Thanks for the reminder that every little bit counts. I haven’t been saving, because right now we’re not able to plunk 10 or 15% of our paycheck into savings, but we do a little each month.

  4. We’ve been with ING for over a year and it’s great! I have my own account that I’m using to save for my new laptop. 4.35% >>>>>>>> 1% at my Credit Union.

  5. I\’ve got a similar account with EmigrantDirect. At 5.15%, what\\\’s not to love?

  6. As someone who is largely clueless regarding these things, I thank you very very much!!!

  7. You may want to wonder around (not affiliated with them in any way and you need to add www. to the front to get the URL). It provides rates of return for various banking instruments either nationwide or for your state.

  8. ING is great. I even love the privacy notices and other regulatory information they’re required to send me (which doesn’t mean I read them, mind you). One of those eye-glazing pamphlets said something like, “A little light bedtime reading” on its cover.

  9. I love Emigrant Direct, too. I did get in on a deal at ING last November where they credited us $50 for each account we opened — including the kids! So we netted $250 in free money from them. I would have stayed with them as an online back but I already had accounts set up at Emigrant and didn’t want to switch them. The beset part about these online banks is that you can open several and automatically transfer money into them each payday. I’ve got one for home repairs, one for my homeschool budget, one for my car savings, and one for my clothing budget. Then I can just transfer the money into my checking account when I need to use it. Excellent system!

  10. A banking tip for the Canadians in the audience (except QC, sadly) — PC Financial is an awesome option for a bank: no fees (for cheques, interact, or anything), and a high-interest savings account that functions much like an ING account. They’re friendly and convenient and did I mention no fees? Truly wonderful. Also, I haven’t had any problems in my 3+ years with them…

    (I don’t work there I swear!)

  11. PayPal is paying 5.04% on its Money Market Fund right now, and you probably already have an account with them.

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