jim

Hahha I got that same email the other day but I never wrote about that big bank for this very reason, teaser rates are a joke. I’m not sending all my personal data over to them for a piddy teaser rate that will last only a couple months. Sure I like getting the best rate but half a percent for a handful of months isn’t going to convince me to move my banking.

Mike

You can’t argue that those teaser rates are good for certain people though. Say a couple who has $100k saved up for a down payment for a house wants to get the most interest out of a liquid account in case they find their perfect house (that’s me). I’ve been getting 6% out of these teaser rates for the past year, which equals an additional $1000 over a stable 5% interest-earning savings account elsewhere. I’d say that was well worth the nuisance of applying for a new bank account every 4 months.

Amiya

I was at Bank of America last week getting my account shifted to my new state. The guy kept trying to get me to enroll in KeepTheChange and asked why I didn’t have a savings account with them.
“Because I get 10x more interest elsewhere”
“I agree, but nobody really uses their savings account to earn interest. It’s a place to accumulate your savings.”
Thanks, but I’ll take 5% over 0.5% any day.

Dy (www.dyphan.com)

I’ve been generally dissatisfied with the brick and mortar banks that I have been with the past few years. I already have an online savings account at HSBC, but I think it’s time to move my checking account to Everbank. They have an interest bearing checking account and they benefits and terms seem reasonable.

Donal

ATM fees in this country amount to extortion. If I use my Bank of America card at another bank’s ATM I will get charged twice; 1st by the host bank, then by BoA. They will even charge for a balance inquiry.
That’s one reason I’m moving to another bank. One in a long list of things that piss me off about BoA. Even if they agreed to refund every charge, past and future, the damage is already done.

Kinney

Ramit,

I am very interested in what you said to the Credit Union’s Association. If there isn’t that much ground swell for a post just shoot me a short email.

Enrique

Ramit:

I call people who run banks thughs with MBA’s. The ceo’s probably graduated from an Ivy League School.
I am sick of the switch and bait, teaser rates and half-lies from the banks.
I have my accounts with my a credit union and they have never have increased my interest on my credit card even though I have been late a couple of times.
As for the post about coupons in a supermarket, If it is product i usually buy, i consider that free money.

Jeremy White

Keith,

There’s a big difference between a coupon from a grocery store and a teaser from a bank. When you use a coupon for a product, you don’t sign yourself into a contract with that grocery store.

My feeling is Ramit doesn’t like banks pulling the old switcheroo (even though customers know it’s coming). However, Ramit, you contradict yourself. If finding the best interest rate isn’t that important, then why NOT take that teaser rate? Once you go to 5%, its still competitive.

alex

BTW: If we are talking about FNBO Direct, then after the teaser rate ends they will probably go back to 5.25%, still better than HSBC Direct. Maybe the difference only amounts to 30 bucks or whatever a year, but I’ll take it.

Ed

I work for a Credit Union. I’d encourage people to look at a local CU to meet needs. While they may not always be able to compete with the some of the high rate online accounts (we’re trying), they may be close and offer the convenience of physical location when you may need it. (espec. if your deposit balance isn’t too high).

Realistically, if you carry a high deposit balance that the interest is going to be significant, well then, interest rate is ‘king’. Some of these online providers do a decent job. Just do your homework and avoid ‘back-end’ fees.

Mark

My primary banking is BofA. The only reason I use them is for direct deposits and for their wonderful E-Bill services (everything is checkless).

Like most of the bloggers, I try to keep only enough money in there to pay bills. I have been using :
http://www.grandyielddirect.com (Apple Bank out of upstate NY) for about a year now. They are currently at 5.27%APY, which has gotten me 5.16% since I’ve been there.

I noticed they just increased the account starting minimum to $2500, but it was nothing when I opened my account. No fees and no troubles sending money there. I send something there once a week and then from there, to my Fidelity account.

I highly recommend checking it out if you are having issues with any other “teasers” or banks.

FNBODirect Offering 6% Interest Rate: How Long Will It Last? - Plus6 …a personal finance blog

[...] was reading through my Google Reader this morning and came across Ramit’s post entitled BS teaser rates: More typical bank behavior.  I thought it was interesting he felt so strongly as to not include the name of the bank in the [...]

JW

I’ve used only credit unions and ING for over a decade now, and I am finally moving to a small town which has really limited banking options, so I had to break down and get an account with BofA. Sure enough, there were hidden fees (not very well hidden, either) everywhere, the guy selling me the account was shady, and they kept trying to sell me random products I had no use for.

I feel your rage.

The Landlord

Most of these rates aren’t guarenteed anyways Ramit. I joined HSBC’s internet savings account over a year ago, and watched as they increased my savings interest rate along with the nation rates.

When I joined they were offering 4.25% (one of the best offers, which is why I took it). They then proceeded to raise the rates every 3-4 months as the fed’s rates rose, so I now earn 5.05%.

If the feds drop the rates again (as some economists predict), I expect that my savings account’s rate will drop as well.

so the moral of the story is that none of these high rates are guarenteed for the long run, so 6% until fall may be a teaser, but it’s not a bad one. the real question is what rate they offered before the teaser kicked in, and how did it compare?

saver

I haven’t seen anyone mention Schwab Bank’s Investor Checking Account. Free checking, free debit card. It’s free if you have a Schwab One brokerage account with $2500 in it. Check to see if the balances can be combined to cover the minimum. Schwab Bank is FDIC Insured (although their brokerage isn’t, but it has some sort of insurance with limits way higher than FDIC’s $100,000).

Interest rate is 4.25%, better than Everbank’s checking. I looked into this and Everbank was my number 2 choice. Schwab sees this as a huge growth area. All the checking accounts that are getting next to zero interest. And they always do things right. 24 hour customer service via phone is one big plus, unlike GMAC.

Terri

I had a 6% account with FNBO Direct and all was well until today- I had the account for over 3 months and suddenly I received an e-mail today saying my account was being frozen because they did not receive information about my employer when I signed up. I was livid as I gave them all the information they asked for, or I assume they never would have accepted my account. I thought maybe it was one of those fraud e-mails, but it sure looked legitimate, although the address was slightly different than what they claim are their legitimate ones. I tried phoning customer service I was so upset and after waiting one solid hour to get through, I was told that the e-mail was sent out in error to many customers by somewhere in the company and to ignore it. I told her that was a severe error for a bank to make- Let me tell you that I immediately transferred all of my money out of there. What other errors might they make????

TC

I’m currently a member of a credit union in Seattle, WA area and joined because of it’s close proximity to my work. I have been a member for over 8 years and while their customer service is great when I go to the CU in person, I rarely need to go in and usually it’s to do things like (1) Change my ATM debit card PIN or (2) get a money order.

My CU’s website is anemic at best — their UI is hard to navigate, bill pay system is a joke and ACH transfer system is slow and hard to use.

I would love to move to a bank that has lower fees, excellent phone+email customer service, better UI + billpay system and has features that eliminate my need to talk to someone in person.

A few friends have recommended to go with Fidelity checking since I alreayd have an investment account with them, but in my investigation of it, it’s definitely a second rate option.

I considered going to HSBC due to their great policy of reimbursing all ATM fees, but with the other comments on this post, looks like HSBC is taking on $3 fees just to xfer money?!