Want a higher interest rate on your savings account and more convenient banking options? Jane Bryant Quinn suggests the new world of online banking. Since 2000, online banking has blossomed offering a range of low-cost, do-it-yourself financial options available only online with higher interest rates than traditional savings accounts. Interest rates for these online banks are higher because they require no buildings or tellers.
ING Direct, for example, created a federally-insured high-interest savings account with no fees and no minimum deposits. Citi's online Ultimate Savings Account features a 4.65% interest rate along with no fees and no minimum balance required. Other institutions are beginning to offer high-yield banking as well, including insurance companies, mortgage banks, and brokerage firms.
But savings accounts aren't the only option. ING Direct's new paperless checking account offers no fees, no minimums, and a 4% interest rate. Customers pay for things online or with a debit card. When checks are needed, an online form is filled out and ING prints the check and mails it out directly the next day.