Should we open an FNBO Direct savings account?

November 27th, 2008 · 3 Comments

I just read that Kiplinger’s Personal Finance Magazine has released its 2008 “Best Of” list in regards to financial services.  They’ve singled out FNBO Direct as the best high-yield online savings account, though they don’t provide alot of detail to support why.   They do mention the lack of maintenance fees, no minimum account balance, and easy linking of up to three other accounts, but interestingly don’t mention the savings yield and how it compares to what you can get elsewhere.

It seems to me that most online banks have no maintenance fee or minimum account balance, so I’m not sure why they single these facts out.   I do think the ability to link three other accounts is nice as I’ve read that many other online banks only allow one or two.  Though I don’t understand why any of them put limits at all.  Perhaps someone can enlighten me as to whether there are some fees paid by banks to make ACH transfers per new account?  Otherwise it must just be the sad state of their own software.

In regards to yield, our existing accounts at ING Direct are at 2.75% whereas FNBO Direct is at 3.25%, definitely a vote in favor of FNBO.  However, I’ve been unable to find any information on how easy it is to create multiple accounts at FNBO — and as I posted about just the other day, we are finding multiple accounts very helpful.  I also have been unable to find any information about the hold period for deposits (ING imposes 5 business days for external transfers in, which I find rather long) and whether they offer instantaneous transfers to a linked checking account.

I guess I’ll have to either give FNBO a call, or create my own new account, to find out the details.

Tags: Savings

3 responses so far ↓

  1. 1 davmp // 2008.11.28 at 12:55 pm

    We pulled the trigger and setup a new FNBO Direct joint savings account. The online application process was easy enough, though they asked both my wife and I to provide an exact date that our driver’s licenses were issued. Who remembers that!? So we picked random dates that were around the right time and they didn’t seem to complain.

    After putting in all our info and specifying how to fund the account, we found out that they want to first deposit money back into the linked account and have you verify the amounts that showed up. While this helps to ensure they’ll be taking money from the right place, and sending it back when we transfer money out, it means an additional 2 to 3 business day wait which is somewhat annoying.

    I also discovered that they place a minimum of a 6-business day hold on the first deposit into the account. For that reason, I chose to initially fund the account with only $5, instead of the $5,000 or $10,000 I was considering. I don’t really plan to use that money in the next two weeks, but I don’t like sending it to somewhere with that kind of hold when I have yet to see the full capabilities we will have access to through their website.

    I’ll add a new comment once I make more progress on this account.

  2. 2 davmp // 2008.12.10 at 4:55 am

    Well, it has been quite time-consuming to setup that new FNBO account. First, it takes a couple business days for them to approve you, then you actually have to revisit your application and actual request that the account be created (why do you have to do this again?) at which point you get to pick a username and password. Then they make you wait for one to two business days while they get that created, at which point they send you a congratulations e-mail and tell you that you can finally login. Oh, and when you created the account you have to supply funding instructions (minimum $1.00), which requires that you first validate you own the account the funding is coming from by validating small deposits made back to that account. All-in-all, they didn’t initiate the funding transfer of $5 from ING until 12/1 and that didn’t show up at FNBO until 12/4.

    I’ve since initiated a much larger transfer — it left ING Direct on Monday and has yet to show up as being in my account at FNBO. Two days worth of interest lost for what should essentially be an overnight transaction. 🙁

  3. 3 davmp // 2008.12.23 at 3:31 pm

    I apologize for anyone waiting to hear how this turned out. I had forgotten to post once the funds hit the FNBO Direct account. It turns out the funds were credited to the account as of 12/10/2008 and have been earning interest since then. Well, I have to assume they have been earning interest as the FNBO Direct website doesn’t actually show any information about interest accrued but not yet credited to your account. Anyway, the transaction history shows the funds being credited as of the 10th.

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