An article published by MSN Money on July 26th, 2007 points out that when it comes to online savings account with a brokerage, these companies do not want your business if you are not having investments with them. In fact, its author Kelli B. Grant cited an example on E*Trade, saying that one needs at least a $5000 balance to enjoy the advertised 3.25% APY checking account.
However, if one were to look at savings account instead of its checking account, the notion that E*Trade do not welcome savers are just absurd. The fact is, its savings account interest tops HSBC Direct by 0.02% at 3.3% APR, a show of sincerity of welcoming savers and their money. And why wouldn't they? On one hand, they have cash flow to lend in order to generate profit and on the other hand, savings account holders may just convert to being investors due to the convenient linking offered deliberately by the brokerage firm.
Online savings account are all the rage now that people can enjoy higher interest rate than those offered by conventional banks. Online banks have much lower overheads than normal banks and the high interest they hand out to consumers are virtually nothing compared to the savings they obtained from not having to maintain branches and hiring employees. In the end, both the online banks and the consumers benefit from this arrangement clever arrangement.
Like ING Direct, E*Trade only offer its debit / ATM card to checking account customers. As a checking account customer, you can use it's Visa brand debit card to make purchases as well as to conveniently withdraw funds from many outlets without having to request and wait for checks to be cleared. Based on this point alone, signing up for checking account is worth the effort. Just remember to keep a balance of $5000 in your checking account monthly to avoid the $15 penalty. Once a member, one can also conveniently make unlimited free bill payments from your account.
Any U. S residents above 18 can apply for E*Trade's high interest savings account with as low as $1 in order to enjoy the high APR. While all online facilities such as funds transfer, electronic statement and customer service are free to use, the real cost will rear its ugly head once you start to request a paper statement or have anything to do paper and extraordinary services. For example, if one were to request an account research from E*Trade, the company can charge $25 per hour for the service. Likewise, if one do not have a Visa debit card from the checking account, requesting for a bank check will cost $15. Alternatively, one can also transfer the funds from one's E*Trade account to other accounts that can be easily accessed.
Try E*Trade Onine Savings now!
Originally posted 2008-10-14 10:47:00.