This article from NewYorkBusiness.com discusses three online banks that are making a name for themselves by offering high savings rates. All of them are based in New York, are less than a year old, and are fighting it out over savings rates.
The three New York based banks discussed are MyBankingDirect.com, HSBC, and Emigrant Direct. All were created as separate online units from these New York Banks. The article mentioned that these banks are viewing the internet as a way to extend their reach and to compete with the bank giants like Bank of America. The online strategy has worked well for Emigrant Savings which has taken in $1 billion in deposits in the first quarter.
The analyst interviewed by the reporter consider the decision as a "no-brainer" to transfer money into these online banks where you can get 2 to 4 times higher interest than your local bank.
The article mentioned that we'll likely see many more banks open up online units in the future including many of the larger ones.
This should mean better rates and service for us.
Technorati Tags: banks, banking, money