About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Best Internet Banks to Use as Your Hub Account


If you have accounts at many banks and credit unions, a hub account can be very useful. A good hub account will make it easy to electronically transfer money into and out of your other accounts. It's common for internet banks to provide an electronic funds transfer service that allows you to initiate bank-to-bank transfers. This is also called an ACH transfer since the transfer takes place over the Automated Clearing House network.

It's less common for brick-and-mortar banks and credit unions to offer an ACH transfer service. There are many of these banks and credit unions that either have no ACH transfer capability or have the capability but with many limitations. So if you have accounts at these institutions, a hub account can be very useful.

Here's an example of how one might use a hub account. Credit unions typically require you to have a savings account. That savings account can come in handy for funding CDs at the credit union. You can transfer the money into the savings account from your hub account. Once it's in the credit union savings account, most credit unions make it easy to open the CD. This can often be done online or by phone. When the CD matures, it's easy to have the credit union close the CD and transfer the money into your credit union savings account. Then you can pull the funds using your hub account.

This same procedure can be done at banks when you have a liquid account at the bank.

Hub accounts can also be useful to meet the ACH requirements for reward checking accounts. Most reward checking accounts have a requirement of either direct deposit or an ACH debit/credit. You can set up monthly ACH transfers using your hub account.

In addition to funding CDs and meeting reward checking requirements, hub accounts can be useful in keeping bank accounts active. You can set up automatic monthly or quarterly transfers to ensure those other little-used bank accounts aren't hit by inactivity fees.

Features of a Good Hub Account

Even though many banks offer an ACH transfer service, few have all the features that make for a good hub account. The features basically make it easy to link to multiple bank accounts and make it easy to quickly transfer your money. Below is a list of these features:

  1. Free ACH transfers - ACH transfers are typically free at internet banks. However, large brick-and-mortar banks often charge a fee for outgoing transfers. Examples include Bank of America and M&T Bank
  2. Unlimited Number of Links - Before you can initiate transfers, you have to set up a link to an external account. Many banks restrict the number of links to only 3. Examples include ING Direct and FNBO Direct.
  3. Easy Link Setup - Links to external accounts are usually done by giving the bank the routing and account number of your external account. The bank will typically use trial deposits to verify that you own the external account. You can verify these trial deposits and complete the verification process all online. However, some banks require that you mail in a voided check to set up a link. This makes the linking process much slower. An example of a bank like this is Dollar Savings Direct
  4. Allows Links to Both Checking and Savings Accounts - A few banks don't allow you to link to savings or money market accounts. They only allow you to link to checking accounts. ING Direct is one example of such a bank.
  5. Fast ACH Transfers - Some banks can take at least 3 business days between the time you initiate the transfer and the time that the money is credited to the destination account. Some banks can transfer as fast as one day. FNBO Direct, Capital One Bank and HSBC Advance have been known for their slow ACH transfers which take at least 3 business days.
  6. No or Minimal Loss of Interest During Transfers - This is related to the ACH transfer speed. You can lose interest during the transfer if there's a delay between the time the money is debited from the source account and credited to the destination account. I have an example of this from my experience at FNBO Direct. I initiated a transfer on Monday. It was debited from the source account on Tuesday, but it wasn't credited to my FNBO account until Thursday.
  7. No or Minimal Hold Times - Banks often apply hold times to deposits during which the funds are not available. This is another thing that can slow down your money transfers. If you need to pull funds from one bank and push them into another, you don't want your hub account to have a long hold time. One example of a long hold time is at Sallie Mae Bank which has a 10-day hold time for deposits of $5K+.
  8. Large Transfer Limits - Some banks will limit the size of the ACH transfers. One of the smallest limits is at Citibank which limits outgoing standard ACH transfers to only $2,000 per day.
  9. Minimal Restrictions on the Number of Transfers - All savings and money market accounts will be limited to 6 ACH withdrawals. This is due to a federal regulation. However, federal regulation does not limit deposits. Some banks limit transfers to below what's allowed by regulation. Checking accounts are not subject to this regulation
  10. No minimum balance fees - There may be times when you want most of your money at other banks which currently have the best deals. So you don't want monthly fees to worry about if you fall below a certain balance.

Two Good Hub Accounts

Two internet banks which have many of the above features are Ally Bank and WTDirect.

Last Thursday I described several of these features that are available at WTDirect (I also reviewed the current promotion at WTDirect in which you can earn up to a $500 bonus.) Update 5/24/10: WTDirect's promotion has expired.

I've been using Ally Bank as my hub for the last few years. There are no limits to the number of links, and the links are easy to establish. Transfers are pretty fast, usually completing in 2 business days. One advantage that Ally Bank has for use as a hub is its interest checking account. Unlike savings accounts, checking accounts aren't limited to 6 ACH withdrawals per cycle.

What's your favorite hub account? And what features are most important to you?

  |     |   Comment #1
I will agree with Ally Bank as a favorable hub account. I too have been using them for years and find Ally the best for moving funds between accounts.
  |     |   Comment #2
Great dissertation on the subject.  I've been very happy with Amex for thier ACH speed and good customer service.  Not to mention competitive (for the times) 1.30% rate.  Very fast and simple website, as well.  Sadly, with rates so low, things like speed and float aren't as big of an issue, but still, you want to be able to know if you need to move money last minute, it won't be long to get to where you want it to go.
  |     |   Comment #3
I find Alliant Credit Union's interest checking account meets all of Ken's criteria for excellent hub account activity and at 1.50% the interest is far better than most financial institutions.
  |     |   Comment #5
I also use Alliant as my hub account.  One-day transfers, consistently generous interest rates, electronic deposits, and a nationwide ATM network provide everything I need.
  |     |   Comment #6

Doesn't Alliant Credit Union have $9,999.99 daily transfer limit?  I think ACU is great if they didn't have this limit.  I guess I can always call the customer service to have higher transfer amount, but not so convenient.
  |     |   Comment #11
#6: it depends on how long you've been at the credit union.  My daily limit is $25k.
  |     |   Comment #7
I've been using Ally for a while now and am happy with them. The interest rate doesn't really matter since a hub is exactly what it says: in and out in short order.
  |     |   Comment #8

ACH is not the only means to use a hub, Alliant allows edeposit and ATM deposits that have no hold period. You can write Alliant checks for larger withdrawls.

I think Alliant is the best over all.
  |     |   Comment #9
I think fidelity smartcash account is not bad.

Just there is no savings account or cd in fidelity.

And the interest is tiny....

  |     |   Comment #10
CapitalOne is changing their policy in June so that interest is credited while the ACH is in progress.  It's already overnight in the inbound so this mostly helps with the 3-day outbound transfers.
  |     |   Comment #12
Watch out for financial institutions that will not allow ACH transfers out of savings accounts, regardless of where the ACH transfer was initiated. Pentagon Federal Credit Union, for example does not allow ACH transfers out of its' savings accounts.
  |     |   Comment #29
PenFed now allows you to ACH funds out of your savings account. I did this two weeks ago when my 5 year CD matured. Things change in 8 years.
  |     |   Comment #13
Second Capital One. Interest rate is good for Costco members (1.49% w/bonus). Transfers are very fast. Unlimited links. High limits.

Not good: DollarSavingsDirect (2 links), Discover Bank (low limits)
  |     |   Comment #14
I use both Ally Bank & ING in the past and agree that Ally Bank is OK (except they have a quirk that you cannot change a transfer request once initiated). Ally Bank does ACH transfers well with no cash flow interest loss.

My best recommendation is Alliant CU as they support many (I have not tested the limit) linked accounts. They perform ACH transfers in well (no interest lost) and you generally loose 1-day if they transfer out (so it may be better to request transfers out via the other bank). The bank pays interest on both checking (if 1 per month ACH or DD is performed) and savings. CD rates have been competitive as well. 

They Also have a promotion going on that will pay you $50 for opening a checking account and performing an ACH transfer in or direct deposit. I will post the code once I see if it still available.

So I agree with the other that have recommended Alliant CU as it is one of the best CU I have encountered.
  |     |   Comment #15
I have been using Alliant Credit Union for about two years for this purpose. I've been well satisfied with their service.  And their recent change over to one day ACH moves made things even sweeter!
  |     |   Comment #16
I tried to add a number of accounts to Ally recently.  When I went to verify the test deposits today, I received an error concerning exceding the maximum number of external accounts.  I thought that they allowed unlimited accounts.  Has anybody else run into this?
  |     |   Comment #17
To follow up on my own question, after chatting with Ally CS, there is apparently now a 20 account limit for external accounts.  While I was told that this "has always been the limit," I already have more than that many accounts setup.  No explanation for that.

I think that this limit was setup during the down time this morning.  If only the test deposits had gotten to my account a day earlier....

  |     |   Comment #18
Heads up:  Ally will only let you link identically named accounts, although they also use the trial deposits method of verifying account ownership. 

When I opened my Ally account, I used my middle initial instead of my full middle name.  It literally took them 3 weeks (even with me following up every 4-5 days) to get them to retitle the account so I could link it to the checking account I have had for 20 years (I use my middle name in that one, not my initial).   It was a frustrating experience and am hoping I made a good decision in deciding to keep the account. 


  |     |   Comment #19
For a pure "hub" where you don't intend to keep any funds for long, I'll second the Fidelity SmartCash recommendation.

I spoke to Fidelity today - they confirmed you can link up to 99 accounts to it. There's no minimum balance, and outgoing ACH is supposed to be next-day.

Plus, if you sign up for it, you become eligible for the Fidelity AmEx card that offers 2% cash back on everything.
  |     |   Comment #20
As a result of its acquisition by M&T, 8/23/11 is the last day to transfer money to accounts at other financial institutions using the WTDirect Bank to Bank Transfer Feature.  On 8/29, one can begin enrolling in M&T Web Banking and begin using the new services and features.

The M&T website states that inbound bank-to-bank transfers are free, however, there is a $3.00 transfer fee for each outbound transfer from your M&T account to your accounts elsewhere. 
  |     |   Comment #21
We're getting a lot feedback from surveys that we're conducting that the most recent moves seem to indicate that the credit unions are seeing a major upswing in the amount of people using them as their hub. 
  |     |   Comment #22
I am in the process of making a bank the hub for a credit union. Threatening to charge for debit cards, no interest and the lack of real people in customer service is enough for me to find local institutions to work with me. Banks like Citi and BoA are simply too impersonal for me.
  |     |   Comment #23
I can't believe I have never heard of a "Hub" account.  Is this just a savings account where we put access funds we want to use later for CDs?  I usually just have the bank wire the funds to the next institution or I get a check and take it to the new place.  Don't understand the need of a Hub account unless the funds are going to a bank or cu out of town.
  |     |   Comment #26
I use a hub account as the single controlling account for all cash.  If I close a CD or sell a stock, the proceeds land in the hub; if I buy a stock or other instrument, the proceeds come from the hub.  This becomes is useful for account management, as it is readily tracked and managed.
  |     |   Comment #25
fwiw, (apology in advance for bumping this back up) citi may have low transfer limits, but they did allow around 12 externals (i seemed to have maxed them out, permanently, since even deleting old accounts still won't let a person add more w/o making phone call...haven't tried that yet, seems a hassle)

pbi bank (formerly ascencia) didn't stop a person from adding in the past, but presently have low limts on transfers themselves...also the ach system has changed a little, so adding/removing banks are TBD.

cap1 seems to have no limit yet on the number of banks (14 and counting so far) but not sure what the limit is yet...

hope this might help someone
  |     |   Comment #27
tiny update: pbi has a limit of 10...sigh.
  |     |   Comment #30
discover has a limit of 25 linked external accounts

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