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New York Banks Fighting It Out Online


One thing worrisome about online banks is that it's hard to feel like you know them. You just see them through their webpage which often isn't that impressive (i.e. EmigrantDirect). So I'm glad when they're discussed in the news. It gives me a feel for them and a sense that they're for real.

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
stanley johnson
stanley johnson (anonymous)   |     |   Comment #1
above is about mybankingdirect
stanley johnson
stanley johnson (anonymous)   |     |   Comment #2
Stay away from this online bank.
Interest is paid on average monthly balance which means if you open account with say 5K and add to it during month only half total or so of what you add earns interest for month.
Interest is not necessarily paid at end of month. Sometimes it is paid on 23rd as in my case.
To close account you have to send a letter by fax or mail requesting account be closed. I haven't sent letter yet but one can only imagine how many days it will take to receive check from them.
there is a fee in my case $20.00 if account is closed in less than 180 days.
Try calling and getting through in less than 10 minutes.
and forget about closing account before interest is post. You lose entire months worth.
Your money deserves better.