Online Banking Roundup: WT Direct vs. HSBC, ING, and Emigrant

Written by Nickel - 28 Comments

I recently ran across a new online bank known as WT Direct. They’re apparently affiliated with Wilmington Trust FSB, and they’re offering 5.26% APY. There’s no minimum deposit required, and this rate is good on any balance for 60 days, after which you have to maintain a balance of $10,000 to get the high rate – otherwise it drops to 0.6%. Yikes! If you slip up and dip below the $10k threshold, you’ll certainly pay the price. On top of this, they have a less than stellar Bankrate Safe & Sound rating…

While their homepage trumpets a four star rating in 2006, WT Direct currently scores a single star on the Bankrate star rating. In case you’re not familiar with this metric, it reflects institutional solvency. The rankings top out at five stars (Superior), and they were rated as “Sound” a year ago, but… Their one star rating means that they’re currently considered to be amongst the “Lowest Rated” banks. At least they’re FDIC insured… You might need it!

So what about the other options out there?

My personal favorite is HSBC Direct. HSBC offers a competitive rate with no fees and no minimum balance, and a pretty good online interface. This is where we keep the vast majority of our liquid savings.

Next up, ING Direct. ING lags behind a bit in terms of interest rates, but has no fees and no minimum balance. They also have a slick online interface, and they really shine when it comes to creating sub-accounts for tracking your money. We used to use ING fairly heavily, but ultimately switched to HSBC for the substantially higher rates. We still have an account there, however, and use the sub-account feature to manage our kids’ bank accounts.

Finally, I would be remiss if I didn’t mention Emigrant Direct. Like HSBC and ING, Emigrant has with no fees and no minimum balance. While their online interface is serviceable, it’s nothing to write home about. Moreover, they lost my trust a little over a year ago when they shut down their web site over a weekend for a planned upgrade and then struggled for a week or two to get back online. As far as I’m concerned, locking people out from accessing their funds (even if it’s unintentional) is the cardinal sin of banking, so they’ve lost our business and we likely won’t be going back. That being said, I do have to admit that I’ve left $10 on deposit there to keep the account open just in case we have a change of heart.

I know there are other options out there, but in this case I’m really only focusing on the new kid on the block as well as those online savings banks with which I have firsthand experience.

So just to summarize:

HSBC Direct – Two thumbs up. Great rate, solid interface.
ING Direct – Less competitive rate, but great for managing multiple subaccounts.
Emigrant Direct – Great rate, serviceable website, but shaky performance in the past.
WT Direct – Excellent rate, high minimum, poor Bankrate.com ratings.

Published on August 31st, 2007 - 28 Comments
Filed under: Banking, Online
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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Comments (scroll down to add your own):

  1. I would highly recommend Presidential Bank.
    http://www.presidential.com/

    Their online CHECKING account is currently yielding 4.50% APY (up to $25,000). It requires $1500 to open, and has a $1000 minimum balance. Their website is a little dated, but their online bill-pay service is fantastic.

    They also offer an online SAVINGS account that is currently yielding 5.25% APY (up to $35,000). It requires a $5,000 initial deposit.

    I don’t use the savings account, since I use Vanguard’s Prime Money Market account for my emergency fund. But, I do LOVE the checking account, and have been using it now for about 3 years with no complaints.

    Thad

    Comment by Thad — Aug 31st 2007 @ 8:23 am

  2. I am thinking of switching banks from the local credit union to an online bank. Fidelity is my current leader. My retirement savings are with Fidelity, and there are a lot of services available after a certain threshold of assets held there. I’m changing jobs here shortly, so I figure now is a good time since I’ve got to fill out all those direct deposit forms anyway. Fidelity just created a new checking/savings account type that seems pretty good. Is there a detailed comparison of the leading banks out there somewhere?

    Comment by razmaspaz — Aug 31st 2007 @ 8:33 am

  3. I am in the same boat with Emigrant; $10 to keep the account open, otherwise ignored. Every quarter or so I download my statements.

    I used to use HSBC for the 5.05% (and their 6% on new money promotion was great!) but while their site is serviceable I am not a huge fan. I haven’t tried ING yet because of the lower interest rate.

    Right now, I am using a local brick & mortar bank for my savings. I get 5.25% savings, although the checking is 0%. However, I get same-day transfers between my savings and checking, which when combined with a better interest rate beats out HSBC by a mile.

    The online access is also serviceable, if not stellar.

    Comment by Blaine Moore — Aug 31st 2007 @ 8:55 am

  4. @razmaspaz:

    I did a similar search for a new online bank after my current bank’s rating dropped to a 1 star rating at Bankrate.com. I used google and found a number of lists that ranked banks. Most of them put Wells Fargo, Citibank, and B of A in the top positions.

    One other “little” online only bank that pops up consistently and gets a 4 star rating from Bankrate is Everbank. EB has a yield pledge to keep its offerings in the top 5% of national survey yields. I am currently in the process of opening an account with EB (6% introductory yield on both checking and money market accounts…).

    Comment by MITBeta — Aug 31st 2007 @ 8:59 am

  5. WT Direct is 4 stars today per bankrate.com

    Comment by ira — Aug 31st 2007 @ 9:41 am

  6. ira: I’m not sure where you’re seeing that… Go to Bankrate Safe & Sound ratings page and look it up. They don’t list WT Direct, but they do list Wilmington Trust FSB (the parent company). As of right now, it has one star. Perhaps you’re looking at something other than the Safe & Sound Rating?

    Comment by nickel — Aug 31st 2007 @ 10:21 am

  7. Thanks for the good info! I’ve been using ING Direct primarily because of the initial signup bonus and the sub-account functionality. I’m looking at diversifying some of the money I have there into some accounts that yield a better interest rate. I’m going to checkout WT Direct today.

    Comment by Eric — Aug 31st 2007 @ 10:26 am

  8. A quick question for you. I’ve got three boys, and right now, their money is in a custodial account at the credit union earning 1.0%.

    I was under the impression that ING required a checking account or something to open an account – I couldn’t figure out how to get the kid’s money in there.

    If you’ve got some good ways to sock their birthday & Christmas money away (we have 529s for college), I would love to hear it.

    Comment by Richard — Aug 31st 2007 @ 11:59 am

  9. Another good online savings bank is http://www.amtrustdirect.com – they currently pay 5.31 percent, $1 to open an account, and they mail statements each month. I have been with them almost a year and I really like them. I also have accounts with Ing ( interest is not competitive so I don’t have much there anymore but I do like their website) and hsbc and emigrant. I don’t know why AmTrustDirect isn’t discussed more often. I can’t remember where I first heard about them but I have been very satisfied.

    Comment by Kim — Aug 31st 2007 @ 1:17 pm

  10. Richard: This is actually a good topic for a post. In the mean time, I’ll just say that we have an account in our name linked to our checking. We then created subaccounts. When our kids need money deposited, we take the money ourselves (or deposit it in our account) and then pull it out of our checking and into the correct subaccount at ING.

    Comment by nickel — Aug 31st 2007 @ 1:39 pm

  11. The best on-line banking I have found is Countrywide Bank. A giant bank, they pay 5.50% on $10,000 and up. Monthly statement, 3 transactions per month, same day transfer.

    Comment by Robert J. Morris — Aug 31st 2007 @ 7:32 pm

  12. I am still using FNBO direct 6% promotional rate – transferred most of my HSBC direct money there as well as everything saved since they started the promotion and one matured CD. I also opened Citibank online savings with $50 when they had free $100 promotion – still waiting for my free $100.

    Will check out interest in all online banks once FNBO direct promotion ends.

    Comment by kitty — Aug 31st 2007 @ 10:18 pm

  13. Right now Citi is offering a $50 bonus if you sign up for their “Ultimate Savings Acct”. It has a 4.75% APR and no fees. It made me put my ING Direct account on the back burner.

    Comment by ross — Aug 31st 2007 @ 11:04 pm

  14. I used to really manage this part of my savings and would jump to the bank that has the highest interest.

    Nowadays, I keep it in my etrade savings account that has 5.05%. I figure that I should spend the amount of time to think of how to earn more money than use that time to try to earn more interest because it would help me more.

    Am I wrong?

    Comment by MoneyNing — Sep 1st 2007 @ 3:08 pm

  15. I only signed up for the Citi savings acct for the free $50. Same reason I signed up for ING’s acct with the free $25. I checked out the AmTrust account and they advertise 5.31% APY, so I may take my free money and put it there finally. It’s FDIC insured, and no fees.

    Comment by ross — Sep 1st 2007 @ 3:15 pm

  16. No.11, Mr. Morris is right. I checked out Countrywide and they have 5.5 APR. No fees and FDIC

    Comment by Buster — Sep 1st 2007 @ 4:04 pm

  17. I use ING for my cd ladder. The cd rates are competitive and I really like their interface. The rest of my savings is in HSBC

    Comment by Norm — Sep 2nd 2007 @ 8:54 am

  18. I’m with Igobanking

    Comment by Tim — Sep 2nd 2007 @ 4:10 pm

  19. i just opened my first online account with ing but i need to find out the best way to do a 529?

    Comment by correy — Sep 3rd 2007 @ 9:31 pm

  20. Nickel, RE: your comment on 10) Richard

    When you deposit $ in your ING account in your name linked to your checking w/kids’ subaccounts, who gets taxed for interest on those accounts, you or your kids???

    Comment by Ra'anan — Sep 4th 2007 @ 5:55 am

  21. Ra’anan: When you do this using subaccounts, the interest income is taxed as if it’s yours. It is possible, however, to create an account in the name of your child and then link it to your main ING account. In fact, you are required (I think) to link such accounts if the main account holder is under age 18. When I last did this, the ING signup process walked me through it.

    Comment by nickel — Sep 4th 2007 @ 7:17 am

  22. I don’t know why it is brought up more:

    http://www.gmacbank.com

    I have been using them for over a year and they are great. Great customer service as well as %5.30 APY. I don’t even bother looking for the best interest rate anymore. Fast ACH, debit card, checks.

    Comment by Rev — Sep 4th 2007 @ 12:17 pm

  23. GMAC’s rate tooke a big hit this week down to 4.9%APY. Question: I have a online checking account with Everbank and was wondering if I would be elgible to get the 6% introductory rate if I opened a money market account with them?

    Comment by Dean — Sep 22nd 2007 @ 11:19 pm

  24. Nevermind doesn’t look like I’m eligible. And ira, WT Direct was rated 4 stars a year ago but now is only 1 star.

    Comment by Dean — Sep 22nd 2007 @ 11:40 pm

  25. I love my ING Direct account. It doesn’t have the highest APY but you won’t get better customer service anywhere else. Also, their online interface is just easy and awesome.

    Comment by Zach — Jan 4th 2008 @ 7:16 pm

  26. Have been with Amtrust for about 16 months, and have had NO issues at all with them. As posted earlier, only $1 to open and keep earning interest on their accounts. Even with recent rate cuts, I am still getting 4.5% APY on my MMA, and my fiance has just opened a new E-savings (5.11% APY for 90 days, then currently will go to 4.6% APY). Not knocking other options, but haven’t found a solid reason yet why we would go elsewhere for these types of accounts.

    Comment by Brad — Jan 29th 2008 @ 6:20 pm

  27. Well, I realize your post is a little old, but it’s starting to look like the high interest savings era is slowly dwindling away. My rate is now at 3.80% with HSBC as of 1/29/08. I posted a copy of the email they sent me on my blog post. On the plus side, I noticed my paypal account says it’s still paying 4.29%.

    Comment by Tim — Jan 30th 2008 @ 10:11 pm

  28. I’ve been with WT for 9 months now, although the rate has dropped substantially, who’s hasn’t. I was under the impression when I checked them out they were rated higher, but I’m willing to sacrifice that aspect since their service has been so stellar. When you call customer serivce you actually talk to a representative, without the playing the “numbers” game. After I spent a month trying to contact a HSCB CS rep to close an account (they would not allow you to do it online), I won’t even consider them.

    Comment by Louis — May 12th 2008 @ 7:55 am

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