so, assuming that E*TRADE folds, how does one deal with getting money back from FDIC?

I'm wondering when the actual rate declines will take effect. My GMAC money market account is still showing 4.5%. I am leery of E*TRADE.

I'd rather earn 1% less at ING Direct than to contemplate how to get my money back from the FDIC should the bank disappear like a fart in the wind. I'm pretty aggressive with my finances, but sometimes peace of mind counts for something.

@O-RLY:

They have a continuity of business plan posted on their website if everything goes fubar.

They also are privately insured for losses on top of FDIC.

I just checked my Countrywide MMA and it's gone down from 4.5 to 4.25%.

Does the FDIC track the aggregate amount of all of your accounts, or does it just state that only the first 10k of each account is insured?

IE, if you have 20k in the bank, would it be smart to have two 10k accounts so they're insured?

I'm going to guess HSBC Direct is going to cut my Online Savings Account by 0.75%, too. It's a shame... Still, I don't have enough in there to make it worth my time to transfer to e*trade.

@ShortBus: Typically when a bank folds, you will get your money back fast. The FDIC is set up so that your money won't usually get locked up for long periods of time. Also, the more likely scenario these days for a bank failure is that the bank would be bought out by a competitor. In that case, your accounts would probably just be transferred to the new bank.

Bottom line: there really isn't that much to worry about as long as your money is in an FDIC insured account and you are below the $100,000 limit. Money market funds are where you might want to start getting a bit concerned about the financial strength of the institution issuing them with all of that toxic paper floating around out there.

@m4ximusprim3: It's the first $100,000, not $10,000.

@m4ximusprim3: First off, it's $100,000, not $10,000. And it is the aggregate amount for one "depositor" at a single FDIC-insured institution. You can have over $100,000 FDIC-insured, but you need to have it at different banks or in someone else's name (like your spouse). There are also certain other types of accounts that I believe can be insured to a higher amount (like IRA's). But the basic insurance is $100,000 total per institution.

I'm pretty sure the 15 day hold is only for newly opened accounts.

I just signed up for the account. It is worth noting that while incoming wires are free, any outgoing wires cost $25. So if you put money in, it will cost a bunch to get it out.

I think I will just let my $1 mature for a while before I get rid of my HSBC account.

@m4ximusprim3: You are insured for up to $100K of deposits per banking institution. [www.fdic.gov]

I'm holding off, how long can they continue to offer this interest rate if they themselves can't get a higher rate of return? If E-Trade doesn't cut its rate in the next few weeks I'll think about it.

@sleze69: Don't have to wire, you can do an electronic transfer.

$200k if you have a joint account with 2 people, aka your wife/husband.

I don't much understand rate chasing, I started with HSBC last year and have been happy, plus their headquarters are "local" to my area, so I'll be sticking with them. Even if the savings go down to 3.5% after this latest Fed cut, it would still be tons better than the abysmal 0.1% my local brick-and-mortar 5/3 Bank savings is giving me. Instead of wasting all my energy to rate chasing, I think it may be a more fruitful pursuit to start looking into that Roth IRA I need to get going on.

I was trying to go through this process when ING Direct kept dropping their rate. E-Trade was about to receive my money, but terrible savings account UI leading into hideous customer service prompted me to abort. I don't care how above their rate is to other companies, customer service and the ability to accomplish what you want to is worth more. I don't know if ING is the best, although I've got no complaints, but I would avoid E-Trade at all costs.

I've had E-trade for a few months now and have been very happy with them.

@bigboat: That type of interaction almost cost HSBC my savings account last year. They kept upgrading the security and I kept having to recall their obscure user numbers. I called to rant at them right after their last change. I felt a little better and luckily they haven't made any more annoying changes since.

BTW - yes I know that security is important but so is convenience. Good sites need to balance them both.

I'm sticking with ING, mostly because it doesn't make sense to rate-chase unless you've got 6 figures on the line. The rock-solid service I've always gotten from ING doesn't hurt, either.

I have been with ETrade for a long time. Their savings account was fairly competitive, and then one day it stopped being competitive. They never gave out any notice. I went elsewhere for savings. Not less than a year later, they come out with a new high yield savings account. I question their commitment.

I should also mention that ETrade is world renowned for the worst, hall of shame customer service. They have gotten better over the last 6 months, but if you require frequent hand holding, this ain't your place.

ING Direct surrendered the high yield crown a long time ago. They are now reduced to gimmick teasers and a big advertising budget. They are like a once great boxing champ whose washed up and living on past reputation.

I would go with Emigrant Direct or HSBC. They have been offering consistently high yields for a long period of time.

@sleze69: Also, Etrade won't do a wire transfer without a crazy amount of paperwork until your account is more than 1 year old. I had a fight with them about it last year, when I wanted to get out some cash and I needed the money in 48 hours. They couldn't gurantee the online transfer would clear in time and said I could easily do a wire transfer but, oops, sorry, nevermind.

I've had accounts with both E*Trade and ING. Both have their merits. I prefer E*Trade because they're much easier to deal with in terms of interactivity on their website, promptness of transfers into/out of the account, etc.

As of right now, FNBO Direct still has 5.05 APY no fees, no minimum balance, $1 to open the account.

oops forgot to add. The only annoying part about FNBO is that you have to prove you own an account you electronically transfer funds to. I have a checking account at a local bank, and I transfer funds from there to FNBO. I had to send FNBO a voided check so I could move funds from my checking account at will.

I am one of those Netbank customers whose account got transferred to ING Direct end of last year. And I have to say, the switchover couldn't have been easier, the ING customer service people I've spoken to on the phone have been super nice, and I'm getting a far better interest rate on my checking account than with Netbank! As someone who's been banking online since the good old days with Wingspanbank.com, I am most pleased.

I have a Citi EZ Savings, and am unable to find their current rate. Anyone know what it is?

@LastVigilante: Too bad that when you call HSBC Direct's phone #'s, your "local" bank sends your calls to offshore reps. Just what I want, some person half way around the world playing with my bank accounts. No thanks.

I still have my ING Direct savings & electric orange accounts for now. Still my "primary" online bank that I use to move money around.

I also have an FNBO Direct account as well but am a bit leery of them. They've had a few administrative screwups on their online side of things that keep me from feeling entirely comfortable with them. Randomly locking people out of their accounts, demanding more proof that you are who you say you are months after having an account with them, etc. If they could get this part right, I'd probably move more money over to them.

I have WaMu saving with free checking (have to sign up for both for the deal). I get 4.75% and I can you use any WaMu bank, plus I have "overdraft protection" on the checking what's not to like?

@FLConsumer: Hence the finger quotes.

I've never had a need to call, but now that I know I'll be sure to use email.

As was inevitable, Etrade Bank just lowered the interest rate on that Complete Savings account. It is now 4.40% only one day after this was origionally posted. That's still the best rate I can find on a savings or money market account. I have one of these accounts and I will still use it. 4.40% is still slightly higher than the 4.00% yeild I get on my Schwab One Checking Account.
I like the fact that Etrade has faster transers than most other banks. If I tranfer money from my Etrade account to my bank account, the money is usually available the next business day. With my old Capitalone Money Market Account, the money took 3-4 days to become available.

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