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Online Savings Account Study - Promos and Strong Brands Help

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There are a few bits of interesting info in this study of online savings accounts. In the last year, Citibank and Washington Mutual have taken a large chunk of market share of new account applicants away from ING Direct. With high yield savings account rates higher than what ING Direct offered combined with their strong brand name, I can understand why. The study also shows Emigrant Direct losing ground in the last year. The last time Emigrant Direct offered a rate that created excitement was back in September 2005 when they bumped their rates by 0.5% to 4.00% APY. So this also makes sense

HSBC has also been taking away market share, and their 6% new-money promo seems to be helping (see my HSBC 6% post). The study shows a big jump of recent unique visitors to HSBC Direct's website and of new account openings. Hopefully, this will encourage other banks to offer similar promotions. Perhaps EmigrantDirect will get back into the game.

One thing this study doesn't show is how much market share all the other online banks are taking (such as E-LOAN, GMAC Bank, AmTrustDirect, etc.) Another problem I have with the study is that the percentages don't add up. The Q4 2006 percentages adds up to 102%. I guess this might be round-off errors. I would have thought the total might be around 90% with 10% consisting of other online banks.

Thanks to the reader who mentioned this study.


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Comments
4 Comments.
Comment #1 by ShraZZy (anonymous) posted on
ShraZZy
very interesting! 102%... probably they rounded it up

I know that ING was bound to lose deposits and customers as the norm is over 5% now. The electric checking will probably make them very attractive again. ED, I've pulled most of my funds out since they are at the same level as my checking and savings bank (Etrade complete savings). ED will need to bump there rates in order to get deposits again.

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Comment #2 by Miss (anonymous) posted on
Miss
HSBC promo absolutely got me. So far I moved 12000.00 over since the start of the new promo.

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Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
I've heard some rumors that we may see a rate bump at Emigrant Direct. Hopefully, it'll be a decent size bump.

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Comment #4 by Anonymous posted on
Anonymous
As soon as this HSBC promo is over, my money is leaving again. My balance had been at $0.00 since I chased GMAC's bump in late November. I'd be happy to leave my deposits at HSBC (assuming the post-promo rate is within ~0.25% of the other players), if the ACH system turned transfers around in one or two days. When the rates are similar, it comes down to access. And that virutal keyboard does not help matters.

It's also worth mentioning that there are some good tax-exempt money market funds out there. For my tax bracket, which isn't that high, Vanguard's California fund is competitive with all the 5% OSAs.

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