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Highest Yield Online Savings Accounts from the Strongest Banks


With the current financial turmoil, several readers have requested that I highlight financially strong banks. So I've put together a list of online savings accounts with the following attributes:
  • Bank has at least a 4-star rating (sound) at Bankrate.com
  • Savings account yield is at least 3.50% APY
  • No minimum balance requirements or monthly fees
  • ACH electronic transfer service
It's important to note that Bankrate's Safe & Sound ratings are based on 6/30/08 data. The ratings can change each quarter. The FDIC has its own confidential ratings, so I would still recommend staying under the FDIC limits.

There's no guarantee that the high rates will continue so I've included the link and date of my first review for each account. You can use these to review their rate histories.

One important feature of online savings accounts is the capability to initiate electronic transfers (via ACH) to your other accounts. This makes it easy to fund the account and to transfer the money out if rates should happen to fall. The quality of the ACH service can vary. The best ACH services provide fast transfers (1 day), allow multiple links to other accounts and have no signficant limits to transfer amounts. Unfortunately, the only way one can tell about ACH speed is from user experience. I included ACH speed in the list below for the older accounts. For other ACH features, refer to the account reviews.

If rates do fall, you don't want to be forced to leave a substantial amount in the account to avoid fees. You can close the account, but if rates go up in the future, it'll be more time consuming to take advantage of it. So another feature that all of these accounts share are no minimum balance requirements or monthly fees.

Note: Full disclosure, the link to FNBO Direct goes through an ad network. If you sign up through this link, I receive a commission.

Update 10/23/08: FNBO Direct decreased its yield from 3.50% to 3.25% APY. CNBBankDirect ended its 6mo guarantee. Updated its account review.
Update 10/03/08: OnBank decreased its yield from 3.75% to 3.60% APY.
Update 9/29/08: OnBank increased its yield from 3.50% to 3.75% APY.
Update 9/23/08: CNB BankDirect just came out with a 4% APY promo. Yield had been 3.50% APY.

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Anonymous   |     |   Comment #1
While FNBO Direct may be paying 3.50%, there are many other banks paying more, and that are likely to be much less trouble.

I'm one of the depositors that had their accounts "frozen" because FNBO didn't like my employment status of "RETIRED".

They have a unique interpretation of the Patriot Act, unlike any other bank, that they like to cite for their actions.
Anonymous   |     |   Comment #2
I must agree with the previous post. My account was frozen for the same reason. Even after I provided the requested information, FNBO sent a second email freezing my account. They are a nightmare to deal with, plus the ACH service is very slow. I would never deal with them again.
Doug (anonymous)   |     |   Comment #3
Eek, a commission from FNBO? That's almost like selling your soul to the devil! I really don't want to see you become just another investor/sheep herder, so I'm going to personally pay you a commission of my own, using your Tip Jar. I hope others join me. You've made me plenty of money the past couple of years, and your seven-days-a-week efforts deserve some reward.
Anonymous   |     |   Comment #4
I also agree about FNBO. I'm not retired, but they froze my ACH anyway without ANY explanation. One of my ACH transfers ($15K!) was debited from an external account but only made it into FNBO after over a week of calling them. It had "posted over a block", that is, the transfer had already begun when they decided to freeze my ACH ability, leaving my money in a black hole.

Also worth mentioning is Nationwide bank, which has very fast ACH (next day for me), 3.50% APY, and a $25 bonus.
Anonymous   |     |   Comment #5
Key senior executives at troubled student loan company First Marblehead Corp. (NYSE: FMD) are leaving the company at the end of this month, while former Chief Executive Jack Kopnisky receives a golden parachute in the wake of the company’s collapsed share price.

Union Federal Savings Bank is in deep doodoo right now. It is not stable at all. They are owned by a troubled student loan company as of the end of 2006.

Bankrate's data is very old and antiquated and is not useful at all.

IMHO the best banks to keep money in right now remain at :

Countrywide and HSBC. USFB is 3.75% instead of the 3.25 and 3.40% but is very unstable and the future is uncertain.
Anonymous   |     |   Comment #6
Forgot to mention-- Nationwide is also 4 stars according to Bankrate.
Anonymous   |     |   Comment #7
You forgot Alliant savings @3.75%. It is very stable.
Mary (anonymous)   |     |   Comment #8
Thank you for the article. A recent method I have used to check on a bank’s financial position is to simple see where current stock price is in relation to the bank’s stock 52 week high. The market has weaker banks at their low and banks considered more stable closer to their high. Not a foolproof method, but very up to date.
Anonymous   |     |   Comment #9
Last poster is somewhat right.

Look at FDIC banking data.
Anonymous   |     |   Comment #10
Alliant is not a bank, it is a credit union.
Anonymous   |     |   Comment #11
stay away from FNBO. They froze my account for no reason TWICE!
Anonymous   |     |   Comment #12
I agree with all the previous posters that say to STAY AWAY FROM FNBO! Based on past behavior, you are very likely to have problems with them. They closed my account simply because I questioned them about what was going on last year when they started freezing accounts.
Anonymous   |     |   Comment #13
I'm curious why CapitalOne didn't make this list. They still have a 3.55% Online Savings Accont that seems to fit your criteria.
Anonymous   |     |   Comment #14
How about KeyBank 3 1/2 stars
Penfed 5 stars
L.A. Financial Credit Union 4 stars
And as mentioned Capone 4 stars
larkin (anonymous)   |     |   Comment #15
Cap One has a 10K minimum balance.
Anonymous   |     |   Comment #16
KeyBank is in financial turmoil due to housing crisis. They were key backers of bankrupt homebuilders such as Levitt.

Capital One doesn't have too good a reputation with customers.

HSBC and Countrywide are where I keep my money. 3.40% with 1 day ACH, and high transfer limits with a top bank (Bank Of America) with local branches and HSBC for the online payment account/online savings.

$10k min at countrywide with 50k required for highest rates now.

$1 min at HSBC. Been happy using both banks.
Anonymous   |     |   Comment #17
I stay at HSBC and Countrywide and will do so for the foreseeable future.

WaMU wont get my business ever again. Capital One often has decent deals but when you look closely you notice it isn't as good as it seems.

1 day ACH at Countrywide with 3.40% and HSBC at 3.25% is still the best mix.
Anonymous   |     |   Comment #18
Everbank is very good and stable

But it has 1500 min with fees. Countrywide has no fees. 10k is required to get decent rates and 50k for the best tier.

The idea for me is to have the best bank with no fees even if the rate is slightly lower.

HSBC and Countrywide are the only 2 banks to meet this requirement.
larkin (anonymous)   |     |   Comment #19
Of the four banks mentioned in the original post, OnBank gets the least amount of notice.

One-day ACH and no minimum balance. As a matter of fact, the pull takes less than a day. I've had money withdrawn from B of A in the AM and show up in OnBank by early that same evening.
Anonymous   |     |   Comment #20
Everbank FreeNet checking does not have a minimum or standard monthly fees, it just has a $1,500 minimum opening deposit. After the opening deposit, you can keep the account open with $0.01.
Cindy (anonymous)   |     |   Comment #21
FYI... Just wanted to let everyone know CNBBankDirect's APY is now 4.00% and guaranteed for the first 6 months of the account. Still just $1.00 to open.
Anonymous   |     |   Comment #22
Getting back to FNBO - I'm retired but they never questioned me nor gave me any trouble. When I sent an email asking if they planned to question me I received a phone call from a vice president who assured me my account was safe and gave me his contact information in case I did have any trouble.

So I'm happy with FNBO.
Anonymous   |     |   Comment #23
Hmm. If bankrate.com has old, useless info re financial stability, where are we supposed to find this stuff out?

I would never use Everbank because they ask for income info, and that is none of their business (You are giving THEM money, not borrowing money). Same for Amegy.

What about Zions? Does anyone use them? I have had good luck so far with them, and the rates are good.
Anonymous   |     |   Comment #24
Bank Guy,

Why haven't you listed CNBBankDirect? Cindy's post is the first time I've heard of them.


Do they do a hard credit pull?
Banking Guy
Banking Guy (anonymous)   |     |   Comment #25
CNBBankDirect is one of the above four. I didn't notice the 4.00%, but I now see it's listed in the small print. I'm not sure why they're not publicizing it more. The big print still shows 3.50%. I'll call first thing tomorrow.
Anonymous   |     |   Comment #26
I've been using FNBO for a while. No complaints, except its ACH is at the same speed as HSBC (3 biz days). Banking Guy, have you compiled some comparison on ACH speed (maybe separating pull and push). Or could you start a thread to have your readers report on their best ACH speed? Thanks in advance!
Anonymous   |     |   Comment #27
I've read the comments about FNBO, and can't believe there is ANY support for this bank. I opened a joint account, and after 3 months of making numerous deposits, they decided to freeze my account because of my "retired" employment status.

If they rejected my application, or had some other communication in a timely manner, I might not have been so unhappy. Be warned ... some day the random number generator at FNBO may choose your account for their "special" treatment.
Anonymous   |     |   Comment #28
OnBank rate is now 3.75% APY.
Anonymous   |     |   Comment #29
FNBO just sent out an e-mail with the subject "FNBO Direct change in terms notice".

Make sure to read all the linked documents.

Look at the 10 BUSINESS DAY holds, and they actually pay interest no later than the day they collect the money ... how generous.

Once again, why does anyone do business with them?
Anonymous   |     |   Comment #30
Everbank --
1) Good online site and helpful people answer the phone...but...
After opening the online acount several days ago, we saw 2 immediate iterations of the "small transation" ACH actions against the account the $ will be taken from. HOWEVER...the actual transfer of the funding to the high yield account is yet to occur 2 more days later. What is up here? Now I will have to call them agian. Note that the high interest yield lasts for a limited period, which starts on the day the account is opened...however, by not pulling the money over to the Everbank account it reduces the number of days Everbank will actually have to pay the high yield during the intial period. COUdl this be the real cause of the slow funding pull?

2) I agree with other blogger that Everbanks' curiousty about income level seems pretty inappropriate for establishing an account. What is up with that?
Anonymous   |     |   Comment #31
Another change at OnBank.
Money Market down from 3.75% to 3.60% APY
The 60 month CD is now 4.90%