I’m going to go Don Draper on you guys for a second: There was a time… long ago… when a man didn’t fear his bank; his bank feared him. It aimed to please him, and both parties got something they couldn’t get on their own.
I’m tired of hearing from readers and friends alike that they want to leave their awful bank behind. Just do it. If you’re stuck with one of the “big three” and are sick of anemic interest rates, lame outsourced customer support, and unnecessary fees & restrictions, an online bank may be the answer.
I have been an ING DIRECT customer since 2007, and consider them the finest online bank out there. If you want to try them, use the link right here to apply within Outlaw‘s deals round-up and you’ll get a $50 bonus. ING’s checking account has no monthly maintenance fees or balance minimums. You also get an attractive MasterCard debit card mailed to you for free; use it for debit purchases, or to access cash at an ATM as you would with any other bank. (ING DIRECT offers free ATM withdrawals at more than 35,000 locations in the Allpoint Network.)
Aside from the excellent phone support, well-designed site, and integration with Sharebuilder brokerage account services, online banks like ING pay interest rates far above and beyond the insulting 0.05% your brick and mortar bank is likely paying you. (I have an account there, plus my ING savings and checking accounts; three accounts total).
And as I recently posted, Capital One’s purchase of ING DIRECT is unlikely to change their great online-only banking products. The corporate strategy there is likely to bolster deposit holdings and convince ING’s customers to get a shiny new Capital One credit card — the strategy isn’t to shaft existing customers with new fees. (Although I could be wrong.)
Another great, feature-rich online bank to look at is Ally Bank. As with ING, your checking and savings accounts there are FDIC-insured and the interest rates are awesome compared to the “big three” U.S. banks. At the time of writing this, Ally also has a tempting “no penalty” 11-month CD which yields 1.08% and is FDIC-insured. You can pull out your money at any time without incurring a penalty fee.
When you take an online bank for a spin, there’s no need to close out your existing accounts right away. In fact, I’d discourage you from doing so — you don’t want to miss any automatic payments or bill-pay debits that you set up months ago.
Instead, I normally recommend to people that they get into the habit of using the online account more often — gradually: start using the new debit card more than your old bank’s card, start depositing your paychecks or payroll direct deposits into the new account, start setting up new bill-pay actions from the new online account… you get the idea.
There’s no benefit to switching completely overnight — why give yourself the added stress? Slowly starve your old bank until you have $100 in the checking account and rarely find yourself using it at all. At that point, it’s safe to walk into the branch and close out the old account altogether.
Oh, and I take my own medicine: I’ve gotten down to the $100 step, but have not yet closed my account — why bother? It’s nice to have a back-up account, but for most things, I use only my credit cards and my online bank accounts. I have no tolerance for “too big to fail” legacy banks with bad customer service and an entitled attitude… My thinking is this: if you don’t value my business, I’ll take my business elsewhere. If everyone out there did the same, the financial marketplace would be a lot more interesting!
— provided by Outlaw; browse more deals in our card offers portal.
Disclosures: We’re a bank and credit card offers site, so obviously we maintain financial relationships with numerous banks and financial institutions, including ING. No relationship or position on Ally at time of publication.