Online Savings Accounts?

[WL2000]

I have been wanting to pull the trigger on a Discover savings account to up the APY over 2%, not to mention the bonus. Does anyone have any good or bad experience with them? Or any suggestions for a better online bank?

Thanks!

 

[CalDisneyMomof2]

I have been wanting to pull the trigger on a Discover savings account to up the APY over 2%, not to mention the bonus. Does anyone have any good or bad experience with them? Or any suggestions for a better online bank?

Thanks!

Just opened one up a couple weeks ago. Everything went smoothly once they verified my identity (we recently moved so our address was different than the one on file and our I.D.). A couple days after the money was deposited the $200 bonus showed up in our account. We also opened one up with Capital One also with the bonus but have yet to see it show up. To be honest, I wasn't expecting to see the Discover bonus yet.

I also considered HSBC but they wanted automatic deposits and I just didn't want to do that.

We sold our house and hope to buy again in 18-24 months. I chose the savings accounts over CDs because I wasn't sure exactly when we'll be buying again.

 

[MinnieWebster]

Discover is a good one, it's pretty competitive and relatively quick to transfer money to outside accounts. Synchrony Bank has pretty good rates as well, but takes a little longer for transfers. DH says HSBC savings is good.

 

[WL2000]

Just opened one up a couple weeks ago. Everything went smoothly once they verified my identity (we recently moved so our address was different than the one on file and our I.D.). A couple days after the money was deposited the $200 bonus showed up in our account. We also opened one up with Capital One also with the bonus but have yet to see it show up. To be honest, I wasn't expecting to see the Discover bonus yet.

I also considered HSBC but they wanted automatic deposits and I just didn't want to do that.

We sold our house and hope to buy again in 18-24 months. I chose the savings accounts over CDs because I wasn't sure exactly when we'll be buying again.

We have the same issue. I don't to tie up the money because we have been looking for land to build on. But, I would like to be earning a bit more on what we have. I only bank online with our local bank, but the thought of putting our money somewhere and not having a physical branch is scary to me.

 

[MickeyMouseCD524]

I have Marcus and I LOVE it! I keep most of my savings and emergency money there. They're pretty accessible for an issues and the lack of a physical branch has yet to be a problem. I still have a savings account with Chase that has about $1000 in it in the rare event I'll need to pull that much out in cash immediately but transfers between the banks are quick and easy and the compounding interest on the 2.25% rate has been the BEST!

 

[MomToOne]

I actually get a slightly better rate with the Vanguard Prime Money Market fund - APY has been running in the 2.4% range lately vs. Discover's 2.1%. Transfers to/from my bank account is a breeze and done online with just a few clicks, although they take a few days to complete.

If you have an investment account anywhere, you may want to investigate this route. While the difference in APY doesn't seem big, if you plan to leave the money there for a while and let the interest compound, you could make more due to the higher interest rate than you get from the bonus. The extra interest at Vanguard on just the minimum deposit needed to earn the Discover bonus would exceed the bonus amount in right around 2 years. And if we are talking about significantly larger sums than the minimum (which is sounds like you could be), then Vanguard will exceed the bonus in interest even faster. Be sure to run the numbers to make sure you aren't shorting yourself in the long run!

 

[tvguy]

My kids have them. Interest is better. Trade off is when you need money NOW, you are sunk. My daughter bought a car and found out she needed cash or check for the down payment. I had to write a check for her, and in 2 days the transfer to my account went through.

 

[platamama]

I love Discover banking. I opened up savings accounts there a couple years ago (when they were offering bonus signups), and opened a checking account with them last year. I can transfer funds instantly from the saving account to the checking account, and have a debit card for the checking account. It's easy to link any external banking accounts with Discover also, but transfers take the usual 2-3 business days. I have a local bank account for just-in-case money too.

Ally Bank is also very good for savings accounts.

 

[pk1959]

I have had an account with Discover for quite a while and had zero problems. It seems like money transferred into Discover gets there a bit quicker than money transferred from Discover gets into my credit union account for some reason, but only by about two days. Maybe my credit union has something to do with the delay, but it really hasn't been a problem that is a deal breaker.

Opened an account with Citi to get their 2.36% savings rate and it turned out to be a total nightmare. Customer service there was the worst I have encountered at any bank I have dealt with. Ended up closing the account within two weeks because they just couldn't get it together and I was tired of calling trying to get it resolved and talking to customer service reps that I could barely understand.

 

[JasonMouse]

As a vacation fund sure why not, ask your existing bank if they have a promo. Most banks have the 2% Savings rate, so you can shop around. Some may even have increased their checking rate. 2% is pretty low though and it's taxed. It's better to put money into funds, especially for long term savings, i.e. you won't need it for non-emergencies.

 

[Nick6300]

We've had the discover mmkt/hy savings for years and like it. Sure there are other prominent banks like Amex, CapOne, Marcus and Synchrony that are in the 2.10 to 2.25% range, but Synchrony, for instance, pays you interest each month from your open date, not at the end of each month - easier to remember, you get that 1st partial month. Discover seems to be a day quicker on settled transfers at 2-3 bus. days vs. the typical 3-5, and it's annoying when holds take 5 days. We've also tried some of the higher rate ones like CIT and always keep our Discover open. They have free checking with free checks and little bonuses for ea. debit use. We don't have to call often, but you always speak to someone in the U.S. It's easy to call and open a CD over the phone if you don't feel like going through the online steps. Ally has good reviews for service and about a notch below Marcus and Synchrony for savings and CD rates, but we haven't tried them. We went with Synchrony for our newest CDs and savings accts and CapOne 360 for their bonus promo and 2% rate while waiting for the bonus.

Purely on a rate basis, there are several you can google top mmkt bank accts and there are some that are over 2.4%, like the Redneck bank (yes, really. And their slogan is "Where Bankin's Funner"), few at 2.5%, one at 2.51%. But I tend to avoid an online bank that isn't as prominent/well established. https://redneck.bank/

 

[boscoast]

I just opened a Citizens Access savings account (which I had previously never heard of) with a 2.35% interest rate and think it's great so far - they are online only, but a brand within Citizens Bank. I actually like that they're online only because it makes it hard to get money without putting more time and thought into whether I should really withdraw. You do need $5000 in the account to access that interest rate, but I am working two full time jobs right now so I wanted to take advantage of that and force myself to save...

 

[WL2000]

As a vacation fund sure why not, ask your existing bank if they have a promo. Most banks have the 2% Savings rate, so you can shop around. Some may even have increased their checking rate. 2% is pretty low though and it's taxed. It's better to put money into funds, especially for long term savings, i.e. you won't need it for non-emergencies.

I am looking for some where to park our emergency savings that will be easy to access

 

[WL2000]

I actually get a slightly better rate with the Vanguard Prime Money Market fund - APY has been running in the 2.4% range lately vs. Discover's 2.1%. Transfers to/from my bank account is a breeze and done online with just a few clicks, although they take a few days to complete.

If you have an investment account anywhere, you may want to investigate this route. While the difference in APY doesn't seem big, if you plan to leave the money there for a while and let the interest compound, you could make more due to the higher interest rate than you get from the bonus. The extra interest at Vanguard on just the minimum deposit needed to earn the Discover bonus would exceed the bonus amount in right around 2 years. And if we are talking about significantly larger sums than the minimum (which is sounds like you could be), then Vanguard will exceed the bonus in interest even faster. Be sure to run the numbers to make sure you aren't shorting yourself in the long run!

Thanks, I never thought of that . We use Fidelity. Maybe I’ll se what they have.

 

[WL2000]

Thanks so much to everyone that responded ! I couldn’t seem to find anybody in my non-digital world that used online banks. It made me a little nervous . Feeling a bit better about it now.
Thanks again!

 

[Nick6300]

Thanks, I never thought of that . We use Fidelity. Maybe I’ll se what they have.

We have vanguard prime in one of our 401k offerings. Maybe MomtoOne can speak to if you need investments with Vanguard or can you just open a prime mkt account only with Vanguard? I know that a broker like Merrill won't let you buy into Vanguard Prime, only their common Vanguard mutual funds and ETFs... I had checked.

 

[WL2000]

We've had the discover mmkt/hy savings for years and like it. Sure there are other prominent banks like Amex, CapOne, Marcus and Synchrony that are in the 2.10 to 2.25% range, but Synchrony, for instance, pays you interest each month from your open date, not at the end of each month - easier to remember, you get that 1st partial month. Discover seems to be a day quicker on settled transfers at 2-3 bus. days vs. the typical 3-5, and it's annoying when holds take 5 days. We've also tried some of the higher rate ones like CIT and always keep our Discover open. They have free checking with free checks and little bonuses for ea. debit use. We don't have to call often, but you always speak to someone in the U.S. It's easy to call and open a CD over the phone if you don't feel like going through the online steps. Ally has good reviews for service and about a notch below Marcus and Synchrony for savings and CD rates, but we haven't tried them. We went with Synchrony for our newest CDs and savings accts and CapOne 360 for their bonus promo and 2% rate while waiting for the bonus.

Purely on a rate basis, there are several you can google top mmkt bank accts and there are some that are over 2.4%, like the Redneck bank (yes, really. And their slogan is "Where Bankin's Funner"), few at 2.5%, one at 2.51%. But I tend to avoid an online bank that isn't as prominent/well established. https://redneck.bank/

Ok, so I had to go to that website. I am not sure there are even have words for that! Maybe just, WOW! lol

 

[MomToOne]

We have vanguard prime in one of our 401k offerings. Maybe MomtoOne can speak to if you need investments with Vanguard or can you just open a prime mkt account only with Vanguard? I know that a broker like Merrill won't let you buy into Vanguard Prime, only their common Vanguard mutual funds and ETFs... I had checked.

I don't know if you can buy the Vanguard Prime Fund if you invest via another company, but I would imagine most of them would have something similar. I just checked Schwab, and they have one but the return isn't as good so might not beat out Discover - but they don't give the APY so you'll have to do that math to decide. (Be sure you are always comparing all APYs or all dividend/interest rates - don't mix and match because you'll be misled. APY assumes you reinvest your dividends/interest through the year.)

If you can't find anything you like at your existing brokerage, you can always open a Vanguard investment account, and buy their Prime Fund that way. It is a mutual fund, so you are officially "investing" with them even if you hold just that one fund. As long as you agree to electronic delivery of all documents, it should be fee free. Minimum investment in the Prime Fund is $3k. But as always, read the fine print yourself before you do anything

But in the interest of full disclosure, if you think you have a significant likelihood of passing away in the near future, don't put any money in Vanguard. Settling my parent's accounts with them when they passed away was an absolute nightmare - I can't even begin to describe the ordeal they put me through personally (and I was already a customer with not huge but not small holdings either there!). Discover wasn't great, made us jump through some hoops that were kind of stupid, but at least they got the job done after a short delay. Sorry to be morbid, but I just thought I'd put the warning out there! As long as you stick to the Vanguard website to do things, they are fine, so I still use them despite the problems I had. But the minute you have to deal with a real person, it seems to always go downhill....

 

[BridgetBordeaux]

Just like our other investments, we are diversified with our online savings account.
We have Discover bank, Amex savings acct, CapOne360.
This is in addition to our "regular" accounts.

The online banks are easy to deal with and often have great rates on savings accounts and/or CDs.
Each is linked to our "main" account so we can move money around as needed.

 

[Nick6300]

I don't know if you can buy the Vanguard Prime Fund if you invest via another company, but I would imagine most of them would have something similar. I just checked Schwab, and they have one but the return isn't as good so might not beat out Discover - but they don't give the APY so you'll have to do that math to decide. (Be sure you are always comparing all APYs or all dividend/interest rates - don't mix and match because you'll be misled. APY assumes you reinvest your dividends/interest through the year.)

If you can't find anything you like at your existing brokerage, you can always open a Vanguard investment account, and buy their Prime Fund that way. It is a mutual fund, so you are officially "investing" with them even if you hold just that one fund. As long as you agree to electronic delivery of all documents, it should be fee free. Minimum investment in the Prime Fund is $3k. But as always, read the fine print yourself before you do anything

But in the interest of full disclosure, if you think you have a significant likelihood of passing away in the near future, don't put any money in Vanguard. Settling my parent's accounts with them when they passed away was an absolute nightmare - I can't even begin to describe the ordeal they put me through personally (and I was already a customer with not huge but not small holdings either there!). Discover wasn't great, made us jump through some hoops that were kind of stupid, but at least they got the job done after a short delay. Sorry to be morbid, but I just thought I'd put the warning out there! As long as you stick to the Vanguard website to do things, they are fine, so I still use them despite the problems I had. But the minute you have to deal with a real person, it seems to always go downhill....

Thank you. It sounds like you have to open with vanguard directly to get the prime. Like I mentioned, one of us have it in our 401k so that’s how I knew about it and looked for it at Merrill. I like the Prime acct. better than current T bills which are mostly in the 2.3% range, except I think they’re state tax deductible on earnings.