WTDirect Savings

Link to Promotional Offer

Earning the bonus is simple – for each $10,000 that you deposit, WTDirect will give you a $100 bonus, up to the total bonus of $500. You need to open and fund the account by June 15 and maintain the initial deposit(s) for three months in order to fulfill the requirements.

The fine print:

This offer is available to new WTDirect clients only. Primary account holder must NOT have held a WTDirect account in the past 12 months. WTDirect account must be opened and funded via electronic (ACH) transfer received by 6/15/10. Bonus is based upon the lowest daily balance during the promotional period of 6/15/10 – 9/15/10. Bonuses will be paid approximately 2 weeks after the end of the promotional period to clients whose accounts are open and in good standing. Wilmington Trust employees and their family members are not eligible. WTDirect reserves the right to cancel or modify this promotion at any time without notice.

That last line is troublesome, and in the past WTDirect cancelled a similar promotion after only a few days. So, if you’re interested in taking advantage of this offer, do it quickly. I opened an account this morning, though I will have to settle for a lower-tier bonus since I don’t have that much cash lying around.

Keep in mind that the bonus is on top of the existing savings rate, which is currently 1.16%. If you deposit $50k and earn the full bonus, this works out to just over a 5% savings rate over a three-month period. Not bad! Their application implies that they do not do a hard credit inquiry.

I’m not sure if I’ll keep my account open after the bonus is fulfilled, but I definitely enjoy offers like this!

If you want to close your account online, all you have to do is log in and look for the BankMail option. Send them a secure message with the following information:

1. That you want to close the account (naturally).
2. Your reason for closing (I cited that the interest rate was too low and that I could get better rates elsewhere).
3. How you want them to disburse your remaining balance to you, if any (such as a cashier’s check or wire transfer).

In my case, I ended up closing both a savings and a checking account, and I transferred my entire balance out via ACH before I submitted the closing requests. I did not receive any confirmation message, but when I logged into HSBC the next day, I saw this:

The “Account Unavailable” notice was enough to tell me that HSBC was out of my life. To be clear, I had no qualms with my HSBC accounts, other than the ubiquitous interest rate sucking issue that currently plagues most other banks. Shedding unused accounts is increasing the simplicity of my financial life, and that’s music to my ears.

Many of them I opened for some promotional reason, such as a high teaser rate. When the rate languished, so did my interest in the account. This happened for me at FNBO, HSBC, E*Trade, Washington Mutual (now Chase), and a few others. When my interest in the account waned, I usually just siphoned my balance elsewhere, save perhaps a dollar to keep the account open. Such is the life of a rate chaser.

My thought at the time was that it was better to keep the newly abandoned savings account open, just in case the bank in question decided to offer higher rates at a later point. If this were to happen, I could easily transfer some money back without going through any account opening process. It seemed, I thought, a convenience to keep these husks of accounts. Perhaps they would be useful later?

Maybe so, and I’ve written about this topic before, but I’m giving up on them and starting a spree of account closings. My reasons are threefold: First, savings interest rates have suffered more drastically and for a longer period than I thought they would. Even now, in 2010, it’s difficult to imagine rates rising anytime soon. Most people are lucky if they earn more than 1% in a savings account at present. Some of the popular money market mutual funds, such as the Vanguard Prime Money Market Fund, are paying a miserly 0.01%. That’s one one-hundredth of a percent! Pitiful. I’m tired of waiting for Godot.

Secondly, I confess that I’ve become angered and embittered by the actions of the too-big-to-fail banks. Watching them get rescued from their own greed and stupidity, and getting wrenched back from the brink of outright destruction by the hands of the taxpayers was bad enough. Watching them then raise fees, jack up credit card interest rates, foreclose on an untold number of homes, and fight tooth-and-nail against any financial regulation that could help prevent history from repeating itself was beyond all rational comprehension. There should be taxpayer outrage in this country, and to be clear, there is some. However, I believe it has largely manifested itself in the wrong way and in the wrong direction. There has been a backlash against big government, when in fact it should be against big financial corporations. I believe strongly in the power of individuals voting with their wallets, and that brings me to point three.

Thirdly, I discovered Alliant Credit Union back in 2009. Their savings account has held steadily at 2% for eight months now, and their regular checking account pays 1.75%, which is an excellent rate for a non-rewards-based checking account. Anyone can join with a membership in their local PTA, which was a one-time $6 fee in my former state of residence. Since joining, I have moved my primary checking and savings accounts to Alliant, as well as my tiny health savings account (HSA). I’m happy with Alliant so far, and since I’m the primary money manager in my household, my wife is comforted knowing that the bulk of our savings is stashed in a single location instead of being spread across ten accounts. Morbid as it sounds, if I were to meet an untimely demise, having our funds in a single location is preferable to her going on a wild goose chase.

Based on point two above, the appeal of smaller local banks and credit unions has grown on me. I love the idea of simplification as well – the thought of purging myself from all those empty account husks feels like a type of spring cleaning to me. It’s refreshing.

From this point forward, I choose not to keep my savings at a too-big-to-fail bank, and I’m going to begin a spree of account closings to simplify my financial life. I’ll still keep liquid accounts at two or three places, but the bulk of my savings will be with a local bank or credit union. Any accounts that I keep with a megabank will be entirely unprofitable for them. For example, I’ll keep a checking account that I opened (for a $75 bonus) with Bank of America, but I’ll keep it just for the ability to occasionally deposit a check while on the road, and then immediately siphon all the money elsewhere.

Maybe my plan is drastic or unreasonable, but gosh, it feels right from both an organizational and a moral perspective.

I opened an account with FNBO Direct back when they were paying a glorious 6% on their online savings account. Those days have long past, and once their rate started plummeting, I siphoned out all but a single penny. Yesterday, it dawned on me that I have not touched that account since mid-2008. I wondered about my lone penny and whether or not FNBO had claimed it and closed my account for inactivity.

Nope. My penny was still there, lonely as ever. I decided to go ahead and close the account.

Fortunately, FNBO Direct makes it simple to close an account online. Once you have logged in, look for the Contact Us link (currently near the bottom left of your account).

On the page that loads, you should then see a link for Account Closing Request. Follow that link, and then you will have to complete a short questionnaire that includes an address verification, your reason for closing the account, and how you would like FNBO to disburse any remaining funds to you.

They didn’t have a field in which I could manually tell them to keep my blasted penny. Ridiculous as it may be, I opted for a cashier’s check. Believe me, I’m going to chuckle pretty hard when I see a cashier’s check for $0.01.

Here’s a screenshot of the closing questionnaire:

For the record, I chose Interest Rate as my primary reason for closing. If enough people do that, maybe the plight of the savers will be clear.

That’s all there is to it, and I appreciate how easy FNBO makes it to close an account.

It now has better integration with the rest of the site. Plus, it’s hosted by Google Docs, meaning that making updates is as simple as editing a spreadsheet (no more deciphering of wiki syntax). There’s a ton of collaborative abilities built in, too, so if anyone wants to help keep it updated, just contact me. I’ll give you full editing access.

Add this Wiki to your Blog

Feel free to add this same savings Wiki to your site/blog. Here’s the code:

<iframe width='650' height='800' frameborder='0' src='https://docs.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0AuofEz2vOteOdDdlT3ZLZzNnN3NONzVreFRDX3VDY1E&single=true&gid=0&output=html&widget=true'></iframe>


Just add that code to a new page or post on your blog to share this Wiki with your readers. Hint: be sure to switch to the HTML view if you use WordPress.

Enjoy!

Of course, there’s more than one way to evaluate the worthiness of a bank. Specifically, features, rates, and customer service are the main factors up for consideration.

Customer service aside, let’s talk about features and rates. I’ve been maintaining the Savings Rate Wiki for many months now, and in that time I’ve been able to observe nationally available bank accounts on an almost-daily basis. Most of the available accounts are similar in nature, with the main difference being just slight fluctuations in APY rates.

During my observation time, I’ve come to the conclusion that ONE of the nationally available savings/money market accounts is FAR inferior to all the others. It offers the worst of all worlds: terrible requirements, high fees, and consistently low rates.

Of course, I’m talking about… Bank Mutual Direct!

Why is Bank Mutual Direct so awful? Consider this:

Terrible Requirements

Most online savings accounts and money markets only require a small opening deposit. Actually, one spare dollar will allow you to open most of the accounts listed in the rate wiki. Sure, the Capital One High-Yield Savings account requires a $10,000 minimum, but they also offer two additional accounts with a $1 opening minimum. No big deal.

E-Loan is “high-roller” with a $5,000 required minimum, but it pales in comparison to Bank Mutual Direct.

Are you ready for this? Bank Mutual Direct requires a staggering $25,000 opening minimum deposit. And what does that chunk of cash get you? Not much.

High Fees

To add insult to injury, if you drop below that whopping 25k minimum requirement, Bank Mutual Direct slaps you in the face with a fee to the tune of $125 a month! One-hundred-twenty-five bucks for falling below the magical 25k line? Wow. Just wow.

If you happen to fall below that limit, Bank Mutual Direct will suck away far more in fees than they give you in interest. You’d be better off just stuffing the money under your mattress.

Low Rates

Since Bank Mutual Direct has such as hefty opening minimum deposit and charges such hefty fees, surely they must back it up by paying a hefty interest rate, right? RIGHT?

WRONG. Their current savings rate is a miserly 0.75% APY. Furthermore, since I created the rate wiki, they have consistently placed at or near the very bottom of the rate chart. In other words, they’re not competitive, and I’d be surprised if they ever have been. As of this writing, only two banks place lower in the rate wiki.

Consider this: if you have $24,999 in your Bank Mutual Direct account, you would earn about $15 a month in interest at the current rate. That sucks, right? It doesn’t suck badly enough, according to Bank Mutual Direct, who will then proceed to siphon off $125 from your account to their coffers, just for the privilege of offering you… nothing.

As if stiff requirements, outrageous fees, and pitiful interest rates weren’t bad enough, perhaps their greatest insult to potential customers is the image on the front page of their site, which reads: If you’re looking for the best rate, you’ve come to the right place.

I have taken the liberty to correct their blatant lie in the above image. Bank Mutual Direct is comprised of liars at best, and outright criminals at worst.

It makes me wonder: does anyone even have this account? If so, what do they offer that makes you stay with them? Complimentary back rubs? Personal chef service? Free yearly tickets to Tahiti?

I regret to report that E*Trade just lowered the rate on their Complete Savings account to a miserly 1.20% APY. This is disappointing to me because I have the bulk of my emergency fund there. While their savings rate was never at the top of the rate chart (I do think fondly on the pre-crash days when they offered 5.05%), it’s like they’re not even trying to compete anymore. The Complete Savings Account is now almost at the very bottom of the rate Wiki. Even ING Direct has a higher rate! What a joke.

Suffice to say, it’s time to move my emergency fund elsewhere. Where to now? It’s a tough question because rates have been falling practically everyday.

For now, I’m heading to Alliant Credit Union. I just joined as part of my local PTA, and the current rate of 2.75% is respectable. Hey, it’s more than twice what E*Trade is now offering.

Hopefully I didn’t just jynx that rate.

I’ll miss the lightning-fast transfers that E*Trade offers, but it just doesn’t seem as important now that interest rates are so low.

Zero percent at Flagstar

Zero percent! Wow! Sign me up! I have thousands of dollars in my mattress that I want to give them immediately.

On the other hand, if savings rates were at 0%, you wouldn’t have to worry about declaring interest on your income taxes. Hmmm….

Alas, the rock-bottom rate seems to have been a fluke, at least for now. The rate is back up to 2.65%. Was it just an error, or could it have been a prophecy? I suppose we will all find out soon.

Here’s where you come in. If you notice an outdated rate in the Wiki, please leave a comment here and I’ll update it as soon as I can. You’re also welcome to register as a Wiki user and update it yourself, but I realize that the Wiki syntax is confusing at first glance. A simple comment here is perfectly sufficient. I appreciate your help!

As of today, there are only 5 banks in the Wiki with rates at 3.00 APY or higher. I have a bad feeling that 2% savings rates will soon be the top of the ladder.

Looking forward to the day when rates start collectively RISING again.

Some highlights

Dollar Savings Direct is no longer 4.00%. Oh how far the mighty has fallen! It is now down to 3.5% – disappointing, but still competitive. It’s currently tied with CNB Bank Direct.

Sixteen accounts currently have rates of 3.00% APY or higher. While this is a pitiful rate-chasing environment, consider switching to one of those accounts if you earn less than 3% right now.

I’m impressed that my E*Trade Complete Savings account is still above 3.00%. E*Trade has never been fiercely competitive with their savings account, but it has been solid. I pray it will stay above that crucial 3% line. Anything below is demoralizing.

Broadway Federal Anniversary Savings still claims the lead with 4.08%, though I wonder if some of the hassles I’ve read about make it worth the attempt to open the account. If anyone has done so, I’d love to hear some feedback on the account opening process and general usage.

WaMu JPMorgan Chase continues to disappoint with their abysmal, moronic, insulting, bottom-feeding ONE PERCENT rate. I have a grand total of $1 in that account, and that’s probably too generous of me. Sheesh.

Overall, it’s a bad environment for savers. Actually, it’s just a bad environment. I’m still hoping for a bright 2009, but with the DOW already breaking through 8,000, it’s hard to stay hopeful.

Good luck everyone.