Updated on 08.18.08

What Features Are Most Important For Your Primary Bank? My Thoughts and Recommendations

Trent Hamm

Midland Bank, City of London by stevecadman on Flickr!As most longtime readers know, I’m a very happy customer of ING Direct for both my primary checking account and my primary savings account.

Before I joined ING Direct, though, my primary bank was one of the largest banks in the United States, one that had a branch in the town where I attended college (I won’t name them because of libel concerns, but I’m pretty sure you’ve heard of them). I stuck with them for a long time simply out of habit – the status quo bias at work – but when I started to get my financial life in order, I began to seriously look at the ways that my bank was costing me money:
+ My checking account didn’t earn any interest at all. Just before I moved, they made a big deal about rolling out a 0.25% APY interest rate for the account.
+ The account also had a rather high minimum balance – $300, according to my notes. If you went below that minimum balance at any point during the month, you were dinged with a fee – $2.95 a month, if I recall correctly.
+ They also charged a monthly maintenance fee for a pretty standard online banking service. This fee was $7.95 a month.
+ The savings account offered only a 0.50% APY.
+ While there were a lot of ATMs in town that were fee-free, if you were in a town that didn’t happen to have a bank branch, you got dinged hard with an ATM fee.

These “features” added up to a pretty major money leak, so I went hunting for a new bank. I identified some features I found important (a decent interest rate, free online banking, no fee nightmares) and eventually wound up with ING Direct as my primary bank. Later, I found other features that would be useful (good customer service, a local teller window, etc.) that ING did well in some respects and not so well in others, but they’re still strong enough (and have treated me well enough) that I’m very happy as a customer.

In short, here are the factors I would look for when choosing a primary bank for my personal business, ranked in their order of personal importance. Please, in the comments, if you disagree with the ordering here, let me know why. Quite often, the importance of certain features varies depending on your life situation and experiences.

No (or very low) fees Before I switched to a bank, I’d want to know every fee that I’m going to incur during normal usage of the account. Maintenance fees are an absolute no-no, as they’ll eat all interest I might earn. I also demand a huge network of ATMs that are fee-free, especially in my local area, but also availability nationwide. This is make or break for me – if I get dinged with a fee or two a month, it eats up any interest I might earn and likely also costs me, too.

Some common fees to look for (and avoid) include minimum balance fees, ATM fees, regular maintenance fees, fees for online banking, and excessive overdraft policies. Make sure you know about these fees before you commit to any bank with your account.

Free online banking and bill pay Online banking and bill pay are essential, and the services should be free, too. The ability to pay my bills just by typing in the amount and hitting “submit” not only saves on the cost of stamps, but makes money management easier, too.

Customer service and ease of use Some people tend to pooh-pooh the value of good customer service at a bank. Those who do are ones who have never had a crisis where funds were misdirected by another agency or a similar mess. In those situations, good customer service is worth its weight in gold. For me, I must be able to talk to someone during normal, reasonable business hours. 24 hour customer support is a definite perk, as is the availability of a local teller window.

For day to day use, a bank that’s easy to access at all times without a bunch of hoops to jump through and a clear and easy to use interface makes all the difference. If you use your bank twice a week and a well-designed online banking interface saves you two minutes per session, that’s a savings of three and a half hours over the course of a year.

Generally, this is fairly hard to research when it comes to a bank, as most people generally just complain when service is bad but don’t say much when it’s good. Do some Google searching about the bank’s customer service (like “ING Direct customer service”) and see what you find out.

FDIC insurance This is almost a gimme for any bank in the United States, but it’s still important, and it can be vital if your bank fails, as with the recent trouble with IndyMac. Just make sure that your account is FDIC insured before putting your money in.

Interest rates Almost every article I read online seems to greatly overvalue interest rates, even claiming that one bank is better than another one because of a 0.5% APY difference. In my view, that’s nonsense. Look at it this way: 0.5% of $2,000 is $10. You can easily lose that much to fees in a month. Not having online bill pay can cost you that much in stamps. Poor customer service can cause all sorts of penalties and delays. In my view, all of those are far more valuable than a slight difference in interest rates. A competitive interest rate is required, but once you have that, the minor rate differences are trivial, especially when you consider how often banks alter their interest rates for promotions and in response to Federal Reserve moves. What’s competitive? As of this writing, you should be receiving at least 1% on your checking and at least 3% on your savings. If you’re not clearing that much, then interest is a problem.

A paper checkbook This is actually less important than you might think. I was very hesitant to switch to a bank that didn’t offer paper checkbooks and, for a long time, I held onto my old checking account just to keep paper checks around. What I eventually found was that I simply didn’t use them very much in the presence of online bill pay. I paid most local bills with cash or with credit cards and used online bill pay for everything else. In fact, after going for several months without writing a check at all, I’m about to close that account.

Putting This to Use
The choice of a bank can seem trivial to some, but it’s a surprisingly important choice. From my own personal experience, switching to a better bank saved me about $40 a month in improved interest and reduced fees – that’s $480 a year. Spending an hour or two now to find a better bank – especially if any of the factors above set off warning bells for you about your current bank – will definitely pay off over the long run.

Use the above checklist of features as a starting point. Decide for yourself which features matter the most to you and focus on them. Use Google to find information about the banks you might be interested in – and stick with reputable banks.

My Personal Experiences
I use ING Direct as my primary bank, but I dabbled with other banks for a period of time in order to try them out. Here are notes on my other experiences.

HSBC Direct I signed up with HSBC Direct simply because their interest rate was higher than ING Direct (it usually runs about 0.3% higher than ING) and I was looking for a savings account to sock away my emergency fund. While it worked well as a place to simply drop cash and leave it, the interface was too clunky to serve as my regular online bank. I had repeated difficulties logging on (their system requires you to use a keyboard-like interface with your mouse that has some compatibility issues) and also had a very difficult time initiating and stopping regular balance transfers. It’s a solid place to set up an emergency fund or a savings account for a specific goal, but it’s frustrating to use as a regular bank.

Washington Mutual had the best competition for ING Direct in my experience, offering a consistently higher interest rate on the savings accounts (as much as 0.75% higher than ING), strong customer service, and free paper checks for life. However, their checking account offered no interest rate at all. If I were to carefully manage the account, I could juggle my way around that, but for me, it wasn’t worth the effort, so I’ve just left the account idle. I have considered using it as an emergency fund, however, but as of yet I’ve stuck with the convenience of multiple savings accounts at ING.

My local bank blows away the others on customer service. I can talk to a teller during normal business hours and get services like cashing in change for free, free and immediate check cashing, and immediate resolution on banking issues (I don’t use this bank personally, but am involved with community organizations that do). Unfortunately, their rates are simply not competitive with some of the online offerings. I have considered opening a checking account there anyway just for the convenience of check cashing and change redemption.

Whatever you choose, choose wisely and carefully and do your own research. A poor banking choice can be a constant small drain on your personal finances, while a good bank can not only patch the leaky holes, but provide good service and drop some additional money in your pocket as well.

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  1. Laura says:

    I love using ING Direct for our joint checking and savings. The lack of fees and having high interest rates are great. I use the interest tracker to motivate to continue to deposit more in and cut unnecessary expenses.

  2. AJ says:

    Hmm, People live in apartment need checks to pay monthly rent, I guess we need to have at least one account offer paper check?
    Any comments or Suggestions for an alternative solution

  3. It’s definitely worth it to take the time to find a bank you can trust. The fees are what finally pushed me out of the status quo. After getting dinged with a minumum total balances fee (I’d finally realized what a crappy deal their CDs were and pulled that money out), I requested an account that would never receive a minimum balance fee.

    When they switched account types and I still got tagged with the same fee, I was done. At that point, I realized I was working with an institution that actively did not have my best interests in mind.

    So, I would add “trustworthiness” to the list of features that are important to me.

  4. ericabiz says:

    WaMu offers 0.1% interest on a checking account if you sign up for their Platinum account. The Platinum requires at least $10,000 between your checking & savings accounts. I keep about $30,000-$40,000 in my accounts most of the time, so Platinum was a no-brainer for me. The extra interest(3.75%) is HUGE when you have a large balance like that. I only keep a couple thousand in ING for emergencies.

    Since WaMu offers easy transfers between checking and savings, it’s no big deal for the checking to not earn much interest. I just log into wamu.com and move money around whenever I need cash or want to write checks.

    The Platinum account also offers 6 free overdrafts a month if you link it to your checking account, which is a neat feature.


  5. Jim says:

    Personally I’d put FDIC insurance as the #1 item. If a bank doesn’t have FDIC insurance then I wouldn’t consider them a legitimate bank and wouldn’t trust them with my money. Its a “must have” item for any bank as far as I’m concerned.

    I’d then look for a balance of customer service, good interest rates and low fees. Sometimes one comes at the expense of another. But if you can get all 3 pretty good then thats a good bank IMHO.

    As a side question: You say “(I won’t name them because of libel concerns,..” Why would you be worried about libel? As long as you know what you’re saying is true then theres no real concern about libel. The truth is an absolute defense for libel.


  6. Bob says:

    $300 is a high minimum to maintain??

  7. Tim says:

    I’d like to make a plug for Schwab’s Investor Checking — it’s easy to set up, it earns a higher rate than my ING checking account, and, most importantly, it allows you to use *any* ATM and reimburses any fees incurred.

    One caveat is that they make you open a brokerage account. But the brokerage account is completely fee-free and is safely ignored. I put my Dave Ramsey-sanctioned $1000 emergency fund in the brokerage account, which also serves as overdraft protection (again, no fees for overdraft transfers).

    The only thing that bothers me is that it’s impossible to initiate inter-bank transfers from their website. You have to call them.

    I still use my ING checking account as my inbox — I pay bills out of that account, transfer money to retirement and savings accounts, and then I transfer food, gas, and entertainment money to my Schwab account. I only carry around my Schwab debit card, which gives me easy access to my cash and my emergency fund, but my bill money is safe from impulsive purchases, and my credit cards are safely out of my wallet.

    Highly recommended.

  8. Macinac says:

    I’m very high on the online banking. I like being able to check my balance at 2am and see what checks have cleared.

    I have a friend who lives three months in the US and nine in the Philippines. She banks in the US, and I’ve tried to convince her about the benefits of online banking, but alas, she is computer illiterate.

  9. Joel says:

    I recently opened an ING account mostly because of your praise here… The only thing I’ve found keeping me from making them my primary bank is that they only allow one checking account. In the past I’ve always had one account for paying bills (automatically) and another for day-to-day spending (gas, food, spending money, etc). This has worked very well for me and it makes the transition seem more difficult.

    Any thoughts on how to work around this? I’m interested to see how you manage your accounts. EVERY monthly expense I have is currently paid automatically (I despise both paper checks and snail mail)

  10. Aaron says:

    I live in the Philippines (work sent me there a few years ago – I am actually from Omaha) and easy online banking is a necessity. I use WaMu and love them. Good interest rates, you can set up multiple savings accounts, and they even have a free bill pay service that will send a certified check to anybody you want to in the US.

  11. Mike P says:

    I use a local bank here in Chicago (mb financial)that I’ve been happy with due to its complete lack of fees:
    No minimum balance fees.

    No atm fees anywhere. (Literally. In fact, they even refund fees charged by the other bank when you use another bank’s atm.)

    No fee for online banking.

    On the flip side, it’s a no-interest account. What’s worked well for me is keep a lower-balance in the fee-free checking, and the bulk of the cash in a money market.

  12. Chris says:

    Due in large part to Trent’s posts regarding ING, they are our current primary for both checking & savings. However, we are about to be fully funding out emergency fund, at which point I might move that (or the bulk of it) into WAMU account, given that I don’t intend to be drawing on it regularly.

    Relatedly, I just went full circle in trying to decide what to do with our EF; given that it’s in a taxable account & that inflation is a bit high these days, I did some research to try to find something that afforded some protection from taxes and/or inflation. In the end, we’ve decided to keep it in an FDIC-insured savings account, although I am still considering laddering the bulk of it into iBonds, given the inflation protection the latter virtually guarantees. But for now, it’ll be ING and then maybe WAMU.

  13. Swamproot says:

    I use and love my ING accounts but I do like having some money in a bank somewhere in the town I live. I was a big believer in banking as locally as possible. After seeing many of our local banks gobbled up by large regional banks I was glad that a locally owned bank opened up in response to that.

    I recently switched to one of those large regional banks because of bad customer service at that local bank. Apparently, if you didn’t go to school or church with someone there they apparently didn’t feel they had to go out of their way to help you.

    I figured as long as I’m going to be treated like a number I am free to chase rates and freebies. Once I get my direct deposit and mortgage payment switched, I’m looking forward to going in there to close my accounts and give them a piece of my mind.

    So you’d better believe that customer service is a BDD with me.

    Has anyone had any experience with the banks/accounts you can find on checkingfinder.com?

  14. dave says:

    one huge factor for me is the ACH transfer speed. for instance, some banks have as long as a 3 day lag time on ACH transfers, while some are 1 day or same day.

  15. Lurker Carl says:

    Customer service, convenience, on-line services, solvency.

    I use my local credit union for primary banking. They have few fees and lots of freebies compared to banks. Very strict lending practices have insulated my credit union from the current financial mess many banks find themselves in. But my emergency fund and other cash savings (for taxes, insurance premiums, unexpected expenses, etc that crop up throughout the year) are in high yield savings accounts in several on-line banks.

    Check out the state of affairs at any bank before becoming their customer. Some, like WaMu, are on the verge of serious trouble from their mortgage lending practices. Buyer beware, saver beware!

  16. t says:

    I use Chase free checking at the moment. The account doesn’t make any interest and is primarily used as a holding point before fund are transferred to other accounts and bills. Why do I still use Chase? They have the most offices out of any bank in the area and I’ve been with them forever. I don’t use ATMs, but I do have an ATM card with my GMACbank savings account just incase.

  17. John says:

    ING rocks! I use them for checking, savings, CD’s, and even have my mortgage with them. Their Customer Service is the best. When I email them with a question or problem, I usually get a prompt phone call with a response and a resolution.

    ING is one of three online accounts I maintain. I keep much of my savings with WAMU because I’m a slut for high interest. I use Emigrant Direct, but their savings rate is now below 3%, so they don’t get much action from me these days. Nothing matches ING for ease of use.

  18. Carlos says:

    Hi Trent-

    You’ve made some very good points (low fees and on-line bill pay are pretty high on my list of must-haves). You’ve missed some important features though (beyond what on-line banks are capable of):

    (1) Safe Deposit Box – there are still a lot of paper documents which it makes sense to store/protect outside of your home (passports, paper savings bonds, bearer bonds, gold coins, deed to your house, et. al.) The annual fee for a Safe Deposit Box is generally tax deductible.

    (2) Medallion Signature Guarantee Capability – if you need to transfer (paper) assets – stocks, bonds, etc., to someone else or deposit them into a brokerage account, you’ll likely need a Medallion Sig Guarantee. Good luck getting a bank to provide this service if you’re not a customer. You likely won’t use this service often, but, when you do, the need is generally urgent.

    To my way of thinking, banks are no place to store significant assets. They are a good place to store “transactional” money (e.g. direct depositing your paycheck, paying bills on-line or via check, furnishing car loans, etc.).

    If you’re in a high tax bracket, you also should consider ‘state-specific’ tax-exempt money market mutual funds from providers such as Fidelity and Vanguard. The post-tax yields (depending on your income bracket) are worth the price of admission (the prospectuses explain how to compute your effective yield). Top-line yield is far from the only consideration when you’re in a high bracket.

  19. Another Personal Finance Blog says:

    Customer service and online tools. I used to use Wells Fargo because I was traveling between two locations and there was a branch in each city. They also had a great online interface that allowed me to manage all of my accounts, including credit and brokerage. however, fees beyond the basics were high. After I got married, I switched to a local bank my wife and her family used. They did a lot of business there, so I immediately was on a first-name basis with the tellers. That was the first time that happened to me and it made a big impression. The only thing we ever pay for is checks, which we barely use, anyway. Their online interface is not very sophisticated, but it does the job.

  20. Jeff says:

    I woudn’t recommend WaMu personally. Rumor is that they’re one of the “troubled” banks.

  21. I moved my money to Wachoiva for the way2save program. Anytime I pay a bill online, which is all my bills and anytime I use my debit card which is for gas and groceries they transfer one dollar out of my checking into my way2save account. I also deposit $50.00 a month into that acct and it makes 5.0%. Way better than anything offered @ my previous bank. They are new to my area, in new buildings that aren’t fortress like and they are friendly and helpful. No fees of any kind. I am happy with them so far. Have read about their lending practices and the trouble they could be in. At least their FDIC insured and I don’t have too much of my money there.

    My efund is with ING and my college savings funds for my 2 children are in 529’s through Upromise.

  22. Stephanie says:

    Keep your checkbook.

    I used very few of them until my child started school. Now I have to make sure that various amounts of money for various activities and supplies get to her school, labeled with her name and their purpose, and in the hands of the person who needs to get them. A mailed check from the bank will not end up in the right place on time. A labeled envelope of cash is an alternative, but not very safe. I probably use 8 checks a month just for her school.

    Also, while building a house (and trying not to order checks with a temporary address on them) I was reminded how necessary checks are. I had to show up at the builder’s office at various times with deposit checks, and construction could have been delayed if those were late or mis-directed. I certainly wasn’t going to put that much cash in an envelope!!

  23. SK says:

    You will need checks if you are renting an apartment. Rental agenicies wont accept online payments

  24. Lisa says:

    We have kept Citizens, owned by RBS (The Royal Bank of Scotland)) and dropped HSBC.

    Both had local branches. But Citizens continues to get better while HSBC kept getting worse.

    Fortunately, Citizens just shortened their bill pay transfer time this summer and revamped their online bill pay system. I really appreciate the ease of use and access to information now.

    We use the bank for a free Notary 2 or 3 times a year. Also, they stock Euros and Canadian which we need about 6 or so times a year. With Circle Gold Checking we do earn a little interest, but the real deal is in the waiving of all fees (such as currency exchange, notaries, and a discount on the safe deposit box). Finally, the bank manager has been personable and they are open til 7pm!!

    HSBC kept disappointing me. After I could no longer call my local bank, they shortened their open hours, their online savings turned into a mess, and they stopped stocking foreign currency I dropped them. Yea, the hassle with signing in was also a pain.

  25. Andy says:

    I love my ING savings account. I wish I could make them my primary bank but because I have been debt free my entire life I was denied a checking account due to my non-existent credit score. Has anyone else found this to be a problem?

  26. April411 says:

    I’ve been with WaMu for about five years(opened my first bank account there) and I love them. They have free checking, free checks for life, excellent customer service and they will waive one over-draft charge a year. The fact that their checking account does not pay interest is not a big deal. I keep very little money in my checking account. If I need to pay a bill or something I simply log in to my account and do a transfer from my online savings to checking. The money is transferred immediately.

  27. Melissa says:

    I like using ING for my savings accounts, and I work in a bank! They just offer a better (way better) interest rate than my bank. My checking is with the bank since I get to use a higher tier of checking with no minimums or fees since I work there. Of course, most people don’t get that option.

    Sometimes, if you shop around, you can find local banks that offer exceptional deals. For example, my bank offers a first-class checking account for amounts over 10k that makes 3% interest. That’s better than some of our CDs right now! Unfortunately, I think many people are turned off to my bank due to the requirements to open an account; there are minimum balances (except on one account if you have direct deposit) and on most of them, you need a significant amount of $$ to open the account. While I can see why some people would complain about it, I think it’s still a good system. My bank is actually profitable; we have no subprime mortgages; and we pride ourselves on exceptional customer service. If you call, you will get a person every time. I’ve seen some very odd things happen to customer’s accounts, and tellers who will work for several hours getting the problem fixed. I think, at least for some places, you get what you “pay” for. Our customers really love us, we have deep roots in the community; I think these are both very important things as well as the things you mentioned.

  28. Eve says:

    You say a .5% interest rate difference doesn’t matter because .5% of $2000 is only $10. I agree with that.

    But it doesn’t follow that a 1% interest rate on checking should be a required minimum. 1% of $1,000 is only $10, the same trivial amount that isn’t worth worrying about when it comes to comparing interest rates.

    So, a 0% checking account should be fine, as long as it excels on every other measure, and as long as you keep $1,000 or less in it (keep any excess in savings). I don’t understand why a $1,000 checking account maximum would be difficult to juggle around, since that is how I keep my checking account. Maybe “status quo bias”?

  29. NYC reader says:

    FDIC insurance should be the first item on your list. Also note that the insurance limit for all accounts combined (excluding IRA) at one institution is $100,000 ($250,000 for IRAs). In this era of bank mergers, it’s getting harder to stay under the limit for some folks, particularly businesses.

    Don’t sell customer service short. I recently had to get a bunch of Medallion signature guarantees for financial papers, and all that has to be done IN PERSON with all sorts of documentation. Not even a REMOTE possibility with a strictly online bank such as ING.

    Commerce Bank gets my vote. Commerce Bank was just recently bought out by TD (Toronto Dominion), I think they are going to be rebranded TD Commerce Bank. They have SEVEN DAYS/WEEK banking with live tellers, open early (7AM), close late (8PM during the week, 6PM on weekends). Free coin-counting machines, lots of different checking/money market accounts with no fees (including no ATM fees for accounts with some reasonable minimum, I forget how much). Competitive rates on checking, money market funds, savings, CDs.

    Most importantly, they issue credit cards and ATM cards RIGHT AT THE BRANCH. Ever lose a wallet on a weekend? Or while traveling? Ever have to cancel a credit card because of fraudulent transactions? Good luck trying to get replacements, it can take days for a normal bank to replace your cards, but Commerce can do all this while you wait, even on Sunday.

    One other piece of advice… always have a second account of some kind with a different financial institution from your primary. Credit union, another bank, whatever. In case your primary account gets compromised (e.g. lost wallet, ID theft, bank seized by FDIC regulators, mistake that wipes out or freezes your funds), you will have access to money and won’t be stuck.

  30. Carolyn says:

    I second the complaints about HSBC online banking. Our emergency fund is in an account there, solely due to the excellent interest rate they currently have. Yes, the interface is terrible. Also, online transfers from my regular savings account can take up to a week to process.

    We use our local, hometown bank for all of our other banking needs. The checking doesn’t pay interest, but truthfully I don’t care about that. We use checking only as a holding place for funds, before bills are paid or groceries bought. Otherwise, the money is transferred to local savings. (It’s harder to spend if it’s not in the checking account, eh?)

    An efficient and useful online account access and free online bill pay cannot be over-emphasized. In my book, this is way more important than interest on checking.

    ATM availability has never really been an issue (though our bank has grown to be a larger regional presence and has ATMs most of the places we go). I’m not a big cash person, as that is what debit cards were created for.

  31. KC Reader says:

    I would also recommend checking the rating of the bank using one of the free rating services from Bauer Financial (www.bauerfinancial.com/btc_ratings.asp)or Bankrate (www.bankrate.com/brm/safesound/ss_home.asp)

    My library also provides access to TheStreet Rating at http://www.weissratings.com which also covers banks.

    It saved me from going with a popular online bank a few years ago that was then shutdown just last year. When I was looking for a new online bank, this one sure looked attractive for features and a snazzy website but the rating were at the bottom. The two minute check sure beat the hassle and frustration of dealing with a closed bank. Features, high rates, and a snazzy website don’t count for much if the bank is not solid.

  32. Kevin says:

    I agree, ING direct has been amazing. I use them for my savings, however i found their Electric Orange checking not very compelling.
    Instead I use a free checking account from Charles Schwab Bank (yes, that stodgy investment bank). Surprisingly they offer an amazing product with Fee-Free ATM’s (they even refund all ATM charges from other banks ATM’s), free paper checks, high interest (right now at 2%, used to be 3%), deposits by pre-paid mail, and if I need to deposit cash (which sometimes happens) I can go to their brokerage offices to handle that.
    And their telephone reps are absolutely amazing. They are extremely professional, and handle everything with ridiculous speed (even on a Saturday night!)
    The only catch is I had to open a brokerage account with them as well. Its completely free though, and will come in handy once I start investing (not at that point yet in my finances)

  33. Todd A says:

    I would agree with the wisdom of having a local bank for transaction accounts, at least. If you think about it, where are financial issues going to arise, on a savings account ? No, on a transaction account. And at the going rate for overdrafts/etc. , you want to be able to stem the tide as quickly as possible. Not to mention, having some good will with a local lender might get you out of a bind sometime.

  34. Katy says:

    Though I do 99% of my banking online with ING Direct, I keep an account with a local credit union for the convenience of writing paper checks. I write a check every 2-3 months (mostly just to pay for fitness classes). It would be inconvenient for the person receiving the money to be paid in cash, and sending a check through the mail with ING might cause confusion.

  35. Sarah says:

    I bank locally. My bank used to be a credit union and is now a bank, but it has retained the customer service and feel of a small CU. The fees are very low — free checking, free online account access, free online bill pay, officially free ATM withdrawals within the network but for some reason they forgive my out-of-network fees automatically (!!). Also, they are customer service oriented, and it’s a solid bank – they’re not overexposed to the subprime mess. (I’ve checked — of course there is FDIC as a safety net, but I’d rather just not have to worry about it.) They’ve never tried to sell me anything. The tellers remember my name. This bank would have to screw something up in a big way to lose my business. (Knock on wood!)

  36. Sid says:

    If you’re in Canada, check out President’s Choice Financial. Yes it’s the Superstore bank, but when you get free chequeing and savings with no limits, free cheque books, bill payments never take more than two days, pretty good interest rates, CDIC insured, and best of all you can use and CIBC ATM with no fees.

  37. Steve says:

    Wow! I must be a real nutcase… no fees are super important to me, competitive rates are as well. Tied with competitive rates (to a certain extent) is the ability to originally use direct connect with Quicken (for no fee) or have a functioning “One Step Update” Web Connect feature that works. Not having to manually enter things into the register or even type in a username/password, log onto website, and manually initiate a Quicken download is a super important thing for me.

    That being said, I have several credit cards, investment accounts, and a checking and savings account that all are automatically updated with the click of a button–and I like it that way!

  38. Yes, Trent. I agree…I would rather go without toilet paper than go without paper checks. I don’t know how you do it, really.

  39. David says:

    For me, the first criteria for a bank is…that’s it is not a bank.

    Credit unions are insured with NCUA in a similar fashion to FDIC, and many have community-wide charters, where that did not used to be the case. Mine offers *every* feature of the bank I used to go to–debit card, paper checks, interest-bearing checking, ATMs, the whole nine yards–with the added bonus that I have a voice in the management of it, at the annual membership meeting.

    Additionally, the credit union I go to is small–staff of three–so they know my name. And my kids’ names. And call and ask questions (in Texan-flavored English, not call-center-flavored-English) when there are unusual transactions.

    If you’re looking for an alternative to The Big Banks, try your local credit union!

  40. Cheapo says:

    I am a fan and customer of ING as well, but recently while researching them further, I learned that they do not have a way to add someone as a beneficiary to an account. The closest option is if you legally have a trust setup you have some option to add the trust as a beneficiary. I am not exactly sure, but it was along those line.

    This may not be a huge issue for many, but a friend’s relative recently passed away and they were going through countless phone calls, emails, etc for months before the funds in their relative’s account was passed to them since they were a beneficiary. Just a FYI the finds were not with ING. Just as most people do not like to give up any money, it seems that banks are as frugal.

  41. Wonko Beeblebrox says:

    I was with WaMu for many years, and really liked them. I just think that they got too deep into the subprime/alt-a mess (yes, I read their quarterly statements and financial press releases where they laid it all out- my take on it was that they were not in as bad a spot as I thought they were); nevertheless, I didn’t want to take the chance of being one of those folks the news camera shows on TeeVee waiting to close out my account from the remnants of a good bank that once was.

    WaMu got dumped for ING.

    I’m also still with Compass Bank and really like them as well. They put me into their Preferred program; every ATM on the planet is free, checks are free for life, I get competitive interest, they have a branch less than 0.5miles from my house, they have extended hours, etc. The tellers know me and I have no complaints with them thus far.

  42. Alyson says:

    If you are a United States servicemember, or you are the child or spouse of a servicemember, or the grandchild of a servicemember, like me, (or their child/spouse, like my children and my husband) who *has or can* joined, you can become a member of USAA (www.usaa.com).

    The customer service is OUTSTANDING. Really stellar.

    The interest rates for $25 minimum savings is currently 1.26% – for $10K minimum the rates are 1.99% to 2.28% Checking accounts earn minimal interest (0.10%) but have unlimited ATM withdrawal with no fees plus free online bill paying. Checkbooks are free.

    I keep the majority of our money in the savings account, and set up automatic transfer of funds to the checking account (limited to 5X month) in order to make sure I don’t overdraw my checkbook. However, other than the 5 transfer maximum, overdraft protection is free.

    Besides all this, their insurance offerings and financial planning advice are excellent. Pretty decent rates for mortgages and personal loans, too.

    Hope that helps someone!


  43. My long-distance love affair says:

    I’ve had an account with my hometown credit union for 25 years, even though I’ve lived on the other side of the country for more than a decade. Why? No fees, great loan rates, and excellent interest rates. I receive 3.5% on my checking account and full rebate of my ATM fees, with the only requirement being that I use either my ATM or my credit card 12 times in a month, which is easily done. No account minimums required.

    Most importantly, though, I’ve stuck with them because of world-class customer service. Every single time I call them, I hang up the phone and say, “I love my bank!”

    Based in a small town, it’s staffed by real humans who will go to any length to solve a problem. How many of you get calls saying things like, “Excuse me, but we just noticed the check you deposited was drawn on a Canadian bank, and we wanted to let you know that it might take an extra two days for it to clear. Is that a problem?” or “We noticed you used a regular envelope for your deposit. Would you like us to send you some new deposit envelopes?” They saved me from buying an expensive and unnecessary extended warranty on my car; they’ve hunted down withdrawals from three years back when I didn’t know the check #; and they’ve given me the straight story on what accounts would serve me best time and time again.

    Pro-active, competitive and human — what can I say? So this is a shout out to the good people of the Corning Federal Credit Union, based in Corning, NY. I love my bank!

  44. Elizabeth Gage says:

    I currently have an account at a credit union and keep my emergency fund with ING.

    Problem is, the credit union and its branches are about 65 miles away, and this becomes a problem when I want to get immediate credit for check deposits. As a freelancer in a small town, I get paid with paper checks. I can theoretically deposit them in linked credit unions, but my two choices are each about 30 miles away, and I’ve had a disaster with each of them, so I’ve stopped using them.

    So I’m now considering banks that are big enough to have branches both where I live and where I work (40 miles apart) AND free checking with conditions I can live with (not balance-based). So far the leading contender seems to be Wells Fargo. Another advantage is I can download from WF to Quicken, which I can’t do with my credit union.

  45. JCM says:

    In no particular order, other features that I consider when choosing my online bank are as follows. Some of these have already by mentioned by others.

    1. Postage paid deposit envelopes
    2. Transfer speed (loss of interest time)
    3. Online interface (simpler is best)
    4. Holds placed on transfer amounts
    5. Minimum balance requirement
    6. Self service options via website

  46. Joyce Jarrard says:

    I don’t write many checks, but I do write a few a month. These are often to service providers that are not set up for debit cards. I also write checks to my church.

    My checking and savings are with a local (regional) bank, because that is where my mortgages are. I rarely have a fee with my checking account. I also like being able to speak to a local person. However, the interest earned is miniscule. I may need to rethink this. That is weird that you can’t write a check on an ING or other similar type of account.

    My E-Trade account offers checking and savings. Does anyone have any experience with them?

    Trent, thank you for this post – it was very educational.

  47. ATM convenience is huge for me. BofA is good for that. For my savings it’s ING all the way, no doubt. Keep in mind that BofA (and I assume most other banks) will remove any overdraft fees if you simply call them up and ask for it. Sure it takes time and you have to stay on top of it, but it works.

  48. Matt says:

    I currently belong to a local credit union. I like the service, but not their interest — ie, barely anything. I’d like to sign up for ING Direct, but I have questions, if people could help answer them who use ING Direct?

    1.) When you call customer service (I understand they don’t have physical locations?) do you talk to an American, or a foreigner you can barely understand?
    2.) How much are they insured up to, for each account?
    3.) If I have a checking account with my credit union (and no savings account), can I set up just savings accounts with that 3% (adjustable, I know) interest rate?
    4.) In your experience, how long does it take to transfer money from your ING savings account to your local bank’s checking account?
    5.) Is there a limit to how many times you can move money between ING and your local credit union?

    I appreciate any help anyone can give me!!

  49. tightwadfan says:

    I got into a credit union through my sister 10 years ago and hope I never have to go back to a bank.

    Interest rates are not important to me since I only use checking for paycheck deposit and paying bills, and I just keep $1000 emergency fund in my savings account for quick access. I have a Vanguard money market account for my 6-month emergency fund and my other savings are in mutual funds. For good interest rates I look elsewhere than my bank accounts.

    the most important issue for me is fees. My old bank charged $4 a month for my checking account and if my savings fell under a minimum. At the time I hardly had over $1000 at a time so it ate up a big percentage of my money. No-fee checking is very important to me. I also really dislike required account minimums. I won’t even consider a bank that tried to charge for online bill pay. ATM fees are okay with me, I don’t use ATMs much and can plan around them.

    Customer service is also extremely important.

    I never considered this until recently but now I would be concerned about the bank’s lending policies. If I found out the bank was handing out loans like candy I would avoid that bank. I don’t know how much an ordinary customer can really know about their bank’s investments, though, so I just feel safe sticking with a credit union or a smaller local bank. They seem less likely to get into risky investments.

  50. Jass says:

    Location, location, location, just like real estate for my local bank. I travel often and my company does not have automatic expense report deposits. I pass the branch on the way into the office so I can deposit my checks, and there is a branch next to my wife’s office as well. I usually stock up on cash before traveling so I don’t pay other’s ATM fees.

    I use ING for savings and transfer funds back and forth as needed. Both my local bank and ING are FDIC insured, and have ok to decent on-line interfaces.

    Service is definitely high on the list for the local bank. Recently my ATM card was turned off. I went to the branch during lunch on a Friday and they did not rush me throught the process of getting it working again. It was shut off due to a suspect withdrawal 2 time zones away (like I said, I travel).

    I don’t earn any interest on my checking with my local account and all checks are free as is on-line banking.

  51. Amanda says:

    I currently have ING and it’s now my primary checking AND Savings bank, and I’m working on closing out my old primary bank accounts.

    My only annoyance is depositing paper checks, I have to mail it in. I have friends who have USAA and they can just send a scanned copy in.

  52. mollyh says:

    Hi Trent –

    I’ve commented before about how generally happy we are with ING – we use it for both our primary checking and savings. Up until last month we were very happy with their customer service, but then we ran into a snag that may end up being a deal breaker for my husband. Our accounts are listed in our first and last names, but my husband primarily goes by his middle name. Last week a friend wrote my husband a check, and wrote it to his {middle name}{last name}. We sent it in to ING, and they promptly sent it back saying that they couldn’t cash it because it was not written exactly as his name is on the account. He talked to several levels of managers, none of whom could correct the situation, so we had to go talk to our friend and get him to write another check. We never had a problem like this at a local bank, so I think we’ll be opening up a local account just as a backup for times like these.

  53. Chris says:


    1.) When you call customer service (I understand they don’t have physical locations?) do you talk to an American, or a foreigner you can barely understand?

    An American.

    2.) How much are they insured up to, for each account?


    3.) If I have a checking account with my credit union (and no savings account), can I set up just savings accounts with that 3% (adjustable, I know) interest rate?


    4.) In your experience, how long does it take to transfer money from your ING savings account to your local bank’s checking account?

    In my experience, 2 days.

    5.) Is there a limit to how many times you can move money between ING and your local credit union?

    The savings accounts have a limit of 6 withdrawals… that seems to be a standard thing, at least with many online banks.

  54. Chris says:

    To be clear, that’s six withdrawals per month on the savings accounts.

  55. Cheapo says:

    No hard feeling if you delete my comment again, but please make it aware that ING does not allow for a beneficiary to be assigned, but rather a legally established trust be can be designated. This may be a huge factor for some people.

    As far as ETrade, I have both their high yield savings and checking accounts and have never had any issues. A benefit of their max rate checking account is unlimited atm fee reimbursements. I think for this you need either $5000 in the checking account or have at least $250 direct deposited into the account every cycle.

  56. I love the multiple savings accounts that ING offers. I still have my Wells Fargo checking account to write checks. I pay as much as I can with ING because of the free postage, but sometimes people still want you to hand them a check.

  57. Stephanie says:

    Watch the bank comparisons–specify the state along with the name. Different banks that operate in exclusive states may have the same name. I didn’t recognize the Commerce Bank described in comment #20, even though I use Commerce Bank. Then I searched and realized that my bank only serves a few Midwestern states. The other Commerce Bank only serves New England and some Atlantic states.

  58. Eden says:

    I currently use 4 banks- primary is my local credit union, secondary is ING Direct, third is Charles Schwab brokerage/bank (the bank is amazingly good), and another local bank for my business accounts.

    I think ING is very good, but not quite good enough to be my primary or one and only bank. I think you need multiple banks to really cover everything you need and it offers diversification to boot.

  59. Eric says:

    Trent, the main problem I run in to is that I use checks to help me keep track of expenses. In other words, if I go to a doctor’s office, I pay with a check (since the copay is $5, I’d hate to pay with a credit card). I guess I am paranoid because I had a doctor’s office once claim I didn’t pay my co-pay and I swear I did, but in cash. Checks remove that confusion. In addition, a few places (my dry cleaners, for example) only accept check or cash. I suppose I could arrange pre-payment through the online billpay for planned doctor’s visits, but other things like dry cleaning or unplanned doctor visits are more variable.

    I also have to agree with the safe-deposit box issue someone else brought up – I am surprised that some other type of company – be it a supermarket, the post office, drug stores, local municipalities, or something – hasn’t found a way to get in to the safe-deposit box industry.

  60. Scotty says:

    I read posts like these and I sit here saying to myself ‘What? People pay banking fees?’

    I’ve been with PC Financial (Part of the CIBC Group of companies, up here in Canada) for the better part of ten years. I basically get full and unlimited ‘everything’ for absolutely zero fees. I dont get interest on my chequing account unless the balanace is relatively high (10K plus), but the savings account pays the same as ING. The only downside is that there’s no physical branches, so the one time every 2 or 3 years I need a money order, I need to order it online (big deal). I earn ‘PC points’ on virtually everything I do/spend, which is good-as-cash in their Supermarkets. I’ve averaged $11.45 per month over 8 years. So they’ve PAID ME just over $1100 to bank there over the past 8 years. That’s the equivalent of getting roughly 7% interest on a chequing account with $2000 in it.

    I read articles like this and I’m like ‘What? People pay bank fees?’. Seriously?

    Move to a bank that doesn’t charge any fees.

  61. Isabel says:

    I use ING for all of my short-term savings and efund; but I prefer to use my local credit union for monthly expenses. Mainly because I like being able to deposit checks in person versus sending it out in the mail.

    My CU has virtually no fees, and has a lot of innovative services (most of which I don’t use, but I like that they offer them). Their customer service is outstanding. They don’t offer free bill pay — but I don’t need that anyway. I pay all my bills to my credit card; and then I pay my credit card off monthly via the CC’s website. Easy!

  62. Debbie M says:

    I would add something to the top of the list: the bank has to allow you to open an account. The first time I tried to open a checking account, when I was a college student, I was told “Checking accounts are for adults.” I left, flabbergasted. I thought to myself, “I may not be an adult or earning any money, but I still have to deposit checks from my parents and then write checks to pay bills.”

    Maybe I should have stayed and explained this to the bank and also explained that I was actually 17 even though I looked 12. Probably they would have let me open an account. On the other hand, why reward such a snooty, nasty attitude?

    Also, I’ve heard that some people have such bad credit (or felonies involving bad checks) that they have trouble opening checking accounts. So, like the FDIC requirement, this goes at the top of the list, but most people don’t have to think about it because it goes without saying.


    I don’t combine customer service and ease of use as one trait in my mind. In the olden days, location (one aspect of ease of use) was very important to me. I wanted a place that was walking distance from where I lived, worked, and/or went to school. Nowadays an online bank can also be considered to have a convenient location since it is basically anyplace where I have a computer, and convenient ATMs can make a far away bank acceptable.

    I would put location right after no fees. The one time I couldn’t find a free bank that I could get to, I just didn’t use a bank at all. I actually got my friends to cash my checks for me, and I gave them cash to write checks for me!


    I tend to think of your “customer service” trait as the “slime factor” and mix that in with your “no (or very low) fees” trait in my mind. That includes charging fees for everything, the fees being high, never reducing fees they have just charged you if you ask them, and just a general obviousness about them trying to milk you for every dime they can get. My feeling is that if they are holding my money, they should be paying me. (Which I admit is unfair since usually they’re holding very little of my money and they are also performing quite a few services for me like processing deposits and checks.)

    When my savings and loan with free checking was bought out by a bank with a much higher slime factor, I switched to a credit union that was free so long as you used direct deposit for your paycheck. (The savings and loan hadn’t required direct deposit, which was cool (even though I did use direct deposit), so I had used them even though it was a farther walk in order to reduce the slime factor. But the credit union was less slimy than the new bank.)


    Stability should also be on your list. When your bank is getting bought out every eight months, you are constant re-evaluating the new choices which is a nuisance. I’m not sure where on the list I’d put that, though. My experience was that the buy-outs got more and more slimy until I’d switch to a less slimy place. My credit union has never been bought out.

    Some people who move all the time want a bank that is available across the nation, which is another way to look at stability.

    And some people travel a lot, so having a bank with lots of ATMs is good. A friend of mine who travels a lot for her job says it is vital that she has a bank that she can contact to solve problems because she ends up having to deal with an above average number of problems.


    I currently consider my local credit union to be my primary bank although realistically most of my liquid funds are in my online account and I mostly use rewards credit cards instead of checks (in spite of credit card rewards companies being complete slime–apparently I can sometimes be bought).

  63. Seth says:

    Have you thought about a rewards checking account? Mine through the local credit union has averaged 5.5% interest since it was first offered, has no fees, and even refunds ALL ATM fees making every ATM in the world essentially fee-free. All you need to do is meet a few easy requirements and you get a great rate and absolutely no fees. Plus it’s local, and who doesn’t like supporting the small, local guys??

    Check out this web-site to find a rewards checking account in your area:


    (Trent, West Bank has lots of branches in the Des Moines area….)

  64. Vijay says:

    I have the following questions:

    1. Do you get paper statements for your online account? One fine day you login and find money missing, how do you prove your case?

    2. What do you do for ATM if you only use ING?

  65. Rosie says:

    If you’re military, the best banking option is USAA. They refund all ATM fees, have competitive interest rates, and stellar customer service. Their online is great, too. And because we signed up our children, even after we leave the military not only can we continue using them, but our children can use all their services as well.

  66. Trent Hamm Trent says:

    Great comments, everyone. One quick note:

    “That is weird that you can’t write a check on an ING or other similar type of account.”

    ING lets you write checks, sort of. You can fill out a form online and they’ll mail the check for you. It works for some situations quite well.

  67. Lisa says:

    I can’t speak highly enough of my credit union — low or no fees for various transactions, online bill pay and account access, incredibly good customer service.

    My CU has a ‘four star status’ policy where if the value of all of my accounts is above $500, I am not charged a fee for anything. They have a checking account where the first $500 earns 7% interest *and* when you open it, they donate $20 to one of four charities (you choose which one). I’ve had an auto loan with them, and my mortgage is with them.

    Oh, and they just made an arrangement so that I can go into any 7-11 (yes, nationwide) and use their ATMs for no fee.

    Why put your money in a bank unless you like knowing that your moeny is being used to make other people wealthier? Credit Unions make you one of those people making money.

  68. Jen says:

    I have multiple accounts at ING, checking and savings. I also have one at emigrantdirect.com, which i have found to be great. No problems as of yet (over a year), higher interest than ING, and as opposed to the week it takes with money transfers involving ING and my local account, if I need money out of emigrant it is available the next day.

  69. I agree with Jim…FDIC is top of my list.

    We use a credit union for our checking account and our HELOC(which is at $0 now! woot!), and we use ING for our savings accounts.

    I’d hate to not be able to write checks, so I haven’t switched to Electric Orange. I write checks for tithe and for our water bill(they charge a high fee for paying online), and for various incidental stuff(my farmer’s market takes checks). It’s not a ton, but it’s more than zero for sure.

  70. Kevin says:

    First off, if anyone out there is paying a monthly fee for a checking account or online bill pay for that matter, smack yourself in the head. Why are you throwing money away? There are plenty of banks out there that let you do it for free.

    We personally bank with US Bank for several reasons. They have many locations near our home and office, ATMs in the gas station we use most and they don’t charge us fees for anything. Our checking account is mainly used for direct deposit and mortgage payments and a couple other bills that won’t do credit card payment for free.

    After those are taken care of, I move all our “extra” money to our catch-all money market account at Vanguard. It has a competitive return with most online banks and we have automatic withdrawals set up to fund Roth IRAs.

    For me, customer service is pretty low on scale. I figure you’re likely going to get crappy service everywhere, so I go where the financial benefits are best. Honestly, I think I’ve been inside our bank once in the past 2-3 years – to get a Medallion Signature Guarantee for a transfer on my wife’s IRA. Other than that it’s all on the website or ATM.

  71. KNM says:

    Like many other commenters, I can’t believe that some people will stay with banks that charge them so many fees. I’ve used State Farm Bank for my checking for several years, and I don’t pay any fees as long as I keep a $100 minimum balance. I also get ATM fee rebates, free online bill payment and postage paid envelopes to send in deposits. I haven’t walked into a bank in years; electronic banking works for me. I use ING for my savings, and while I like SF for checking, I’m contemplating moving my checking to ING as well to earn some interest. My only concern is that ATMs in their network are not conveniently located for me, but I could work around that by getting money at store checkouts.

  72. constant learning says:

    I use a local bank because of its excellent service – and I know from experience that it is very careful with its lending practices. Fees are minimal – they do have a required minimum balance of $250 or they charge a fee. I use this to assist me in avoiding unnecessary spending and to prevent bounced checks. Online bill pay is free. I write only a few paper checks each month.

    I do have a question, however. If you completely eliminated paper checks, how would you maintain a check register? I realize that you keep your register on a spreadsheet. I just can’t seem to transition from a paper register that I carry around with me. I have tried keeping the register on a PDA but still find the paper register the most reliable and easiest to enter and keep up. Any suggestions?

  73. palm says:

    We handle our money with our local credit union. It has no fees for our accounts or for online billpay. Bank checks, medallion signature guarantees, and the first 500 paper checks are also free. Interest rates are competitive and there’s no minimum balance. Overdraft protection is automatic and free. They put no holds on deposited checks–if you log on to tell them you’re mailing a $1000 check to them, they credit that immediately, before they’ve even seen the check. They reimburse within 48 hours for any ATM fee incurred anywhere in the world (even a $10 charge to take out $50 in Vegas on Saturday would be credited to the account on Monday morning–I don’t go to Vegas, but my colleagues do). All the Visa cards offer cash back. They answer their phones in person seven days a week and their branches are open on Saturdays. When they misspelled my name on my first paper checks, they put $10 in my checking account as an apology and express mailed replacements.

    I would never go back to a bank.

  74. Kevin says:

    Constant learning – spreadsheet would work, but I use Quicken. Paper registers are really hard to reconcile compared to Quicken where I can just click a few times and I’m done.

  75. Solar says:

    I hate WAMU. We banked with them and found their “no fee” gimmick was absolute BS. We were dinged harder with fees there than any other bank I have ever been with (Canada, US and UK)

  76. Joe says:

    USAA has been an incredible bank for me, with both their offers and service. Any military (and some government) employees that might have access to this wonderful resource should definately consider making USAA their primary bank. Incredible service (you will want to talk to your free financial advisors all the time) with very low fees.

  77. Laura says:

    It is definately not in my experience that ANY bank will waive ALL overdraft fees as comment number 30 states. I know a branch manager at a large bank and they are always complaining of people expecting their overdraft fees to be waived when the customer made an error. It is one thing if it is the bank’s error, but if it was due to your mistake, one is understandable, after that, no more fees should be waived for your stupidity. Most banks keep records of how many fees they’ve waived for you and in some cases they can mark your account “do not waive fees”. So no amount of begging will get your fees waived.

  78. prodgod says:

    Okay, it pains me to admit I’m one of those people with a local business checking account that charges a $15.00 monthly service fee, unless you maintain a minimum balance of $2500, which I rarely do, since it’s a checking account – I use it to move funds all month long. Also, there is no interest offered.

    I know, I know…DUMMY!

    Guilty as charged. I signed up with them about 10 years ago when they were the first to offer free online banking and I liked the idea of having my business account (my only account, actually) with a local bank. The customer service is pretty good, but before I got control of my finances I was hit with quite a few overdraft charges on a regular basis @ $25 a pop!!! (I know, dummy!) Hence part of the inability to keep the minimum monthly balance.

    This thread has been a real eye-opener and I’m definitely guilty of “status-quo bias” in this situation. Since I’ve had USAA insurance for many years, I may look at switching to them. Not sure if they offer business checking, though. And making deposits might be an issue. I don’t care about ATM access though, since I don’t use them. That requires you to actually have money in your account! LOL!

    Now….since several people have commented that they can’t understand why anyone would use a bank that charged service fees (point well-taken), I have to fire back with: I can’t understand why anyone would still use a paper register and reconcile by hand!!! Try Quicken or something comparable. You’ll never go back! Of course, it’s easier with computer-printed checks; if you’re still going to write most of your checks by hand, you still need to enter them into Quicken. But stop that! :-)

  79. Dee says:

    How do you people pay the IRS? They will not accept E-checks!

  80. Amy says:

    I use CouleeBank.net
    Although it’s a smaller bank, they have good online banking, and an excellent interest rate (6.01%)on the free checking (if you use the debit card 10 times per month, get your statements online, and have one ach payment per month). I’ve never had a fee, and can call up and talk to an actual person when i need to.

  81. neenee says:

    I’m glad you wrote about this because I’ve had such an awful experience with BOA that I am switching my primary checking. I have an emergency fund over at HSBC, yes the interface is lousy I agree with that but it’s still a great place to stash money. What I like in a bank is:
    fix problems quickly
    very good interest rates
    a local branch
    a simple interface in which to check balances and other business
    Accounts where you don’t have to pay “maintenance fees” if you don’t the minimum balance or Direct deposit

  82. Alyson says:

    What a great topic.

    In terms of overdraft protection, I have the same response to that as to high interest rates on credit cards – to date, it doesn’t apply to me. I don’t carry a balance and I do not over draw on my checking. Having a roommate, right after college, who would bounce the $15 water check, then have to pay the $25 fee for a bounced check to the bank and one to the vendor assured that I will ALWAYS have enough in my checking. And, if I didn’t have enough, it would probably be cheaper to pay late than pay with an invalid check.

    That said, for anyone in MA, Salem Five has been a great bank. (Century too, but Salem is better.) There aren’t a lot of branches, which is their major downfall but with direct deposit we don’t have to make a run to the bank very often. They have no fee checking; we get some sort of interest, it ain’t much, but it’s there; they give cash back on debit/credit purchases from your debit card (also not a ton, but whatever) AND they refund ATM fees, so if we’re out of town and need cash and pay, it comes back to us at the end of the month. They’re also open on weekends, have free Keurig coffee/tea/chocolate in the lobby and have free change counting!

    What I like about all of those refunds/cash back is that they all come in at once, never a huge amount, maybe like $7, and I take it and dump it in ING savings. It’s a great way to save some extra pennies.

    Right, and we have ING for the emergency fund and the savings on the side.

  83. Roger says:

    Hum, interesting post. It made me start to think a bit about what I was looking for when I searched for new banking opportunities. Here’s my order, with my reasoning behind each choice:

    1) Customer Service/Ease of Use: Easily the top thing on my list, a bank needs to be efficient, courteous, and respond to the needs of its costumers. Online banks should have easy to navigate interfaces and clear ways of getting help, if necessary; offline banks need responsive and helpful tellers able to deal with the numerous problems that will inevitably arise.

    2) Interest Rates/Low fees: To me, these points are two sides of the same coin; how much my savings are earning. I agree on not chasing the highest interest rates, as well as looking for banks that will offer very few, if any fees. I do think, though, that a bank offering a high interest rate could offset the existence of fees, at least for some of its customers. (A bank that offers an interest rate of 1% above its competitors with a flat yearly fee of $20 would be appealing to anyone who could deposit more than $2000, for example.) It depends on the whole benefit/fee package as well as the individual needs of the bank customer.

    3) Online Banking/Bill Pay: A must given the modern situation, I actually left the bank I had used since I was a kid primarily because of the lack of online banking. I haven’t yet set up online bill pay, but it is on the short list of things I need to do financially.

    4) Paper Checkbook: More than half of the checks I write each month can’t be done through online bill pay or credit cards (rent and church contributions being prime examples). While I could, in theory, withdraw the cash for each payment, this would get rather tricky and generally wouldn’t be worth the hassle. This keeps me anchored, at least for the foreseeable future, to a checking account that offers paper checks.

    5) FDIC Insurance: Two reasons for this being at the end of my list. First, as Trent said, it’s all but given that a bank will be insured, so as a method of choosing among banking options, it’s almost a non-factor. Second, there are banking alternatives, like money market mutual funds, that aren’t FDIC insured, so using this as a deciding factor will sometimes lead to bad savings choices.

    As for my current banking situation, it’s a bit complex. As I have yet to find a single organization that can meet all my needs (and, in the wake of the Indymac troubles, would be a bit reluctant to put all my money in one place, anyway), I currently have four accounts open:

    -PNC: my offline bank, I have a checking account there where I have my paycheck direct-deposited and use it take out cash when necessary. Since my account earns NO interest, I mostly use it as a way-station, transferring funds to accounts with…

    -INGdirect: my main account, it’s becoming more and more valuable as I start to set up online bill pay. Now, if I could just figure out how to transfer money directly from ING to Vanguard and Sharebuilder, I wouldn’t need to bother with my PNC account at all.

    -HSBCdirect: My emergency fund account. I basically use this just to drop funds and store them, separately from my ‘main’ account. I have noticed the problems mentioned here, particularly the slowness (I transferred some funds from my PNC account over the weekend, and now, three business days later, my HSBC account still hasn’t been credited). But, as a store for emergency funds and nothing more, it’s hard to beat an extra 0.5% in interest over ING.

    -Vanguard Money Market Prime: Not a bank account, per se, I’m still using it as place to store some extra money, mostly in anticipation of acquiring a few more Vanguard funds to round out my asset allocation. However, given the current rather low interest rate (2.2%), I’m relying more on my INGdirect account for this sort of saving.

  84. prodgod says:

    UPDATE: Just checked with USAA and unfortunately, they don’t offer business checking.

    Looks like I’ll leave things as they are for now.

    Status quo bias prevails again.

  85. Laura C says:

    I love the idea of online banking and online bill pay. One problem: my bank will send the money for no fee, but it costs $7.50 for the utility company to “graciously receive” my online payment. No thanks. The check is in the mail.

  86. almost there says:

    Dee, comment #54: Use the EFPTS to pay your taxes.


    (Electronic Federal Tax Payment System)

  87. mk says:

    Sometime in 1997~98, I found Money Magazine article about online banking and list of bank names, and I became a USAA customer. Note:Unlike many customer at USAA (#50),I was NOT a member (military serviceman & family), but Money said some banking products were open to non-members.

    I closed my local bank accounts soon after, and never stand in a line since then. For paper-check deposits, they provide postage-paid envelopes, FedEx overnight trial (since discontinued), and scan method (#33).

    In spite of Superior financial strength, numerous improvement of interface and security, trained customer service…bank rates once were top-tier, it seems now in the lower-middel. I’m shifting some funds to ING direct. I will probably keep USAA for check writing and ATM fee credits and link with ING direct. Best of both world.

  88. ali says:

    Hey Trent –
    I largely agree with your list, and I have to agree with your assessment of the banks you’ve used… I have checking and savings with ING, and an emergency fund with HSBC Direct, plus my old checking account with HSBC. I have kept it as a back-up, but I find that I never use the HSBC checking, except for occasionally depositing cash. But I have to disagree with WaMu – they have a nice website, but my boyfriend has been hit with a ton of fees for overdraft in part because of the way they process and display debits from the account.

    And as for ATM’s, I just use a local supermarket – buy some fruit or other necessary item, and get cash back!

  89. Mubongo says:

    In response to the comment, “You will need checks if you are renting an apartment. Rental agenicies wont accept online payments”

    That isn’t entirely true. I have my online bill pay set up to send a paper check to my building’s management, previously to a private landlord. They do not accept electronic fund transfers, but everyone can accept the check sent by the bank. I even send checks for birthdays through online bill pay. (Looks like Trent sort of covered this in his comment (#42) already…)

    I actually just had to dig out my checkbook for the first time in over a year though. I’m moving on Monday, and the movers will need to be paid by check that day.

  90. Blair says:

    I think FDIC insured is the ultimate no-brainer.

    First and foremost, I pick my savings accounts based solely on interest rate and transaction fees. So I stick with Emigrant Direct because their interest rate is higher than ING, and there’s no fees involved. However, you do have to keep in mind that you can not draw money back out of it for at least two weeks.

    Checking, all-in-all, is secondary to savings and investment websites, simply because I rarely use cash for anything. I put just about everything on my credit card and pay off the entire bill at the end of the month.

    For checking, I went with my company’s credit union, as they offer much better interest rates on any loan compared to any other bank I’ve seen. They also have 0 ATM transaction fees, and all of the Wawa’s in the area have free PNC Bank ATMs. Since I don’t write/receive a lot of checks, the lack of branches isn’t an issue.

  91. Brian says:

    I have Chase and understand the frustration in ATM fees cuz they certainly can get you if you use someone else’s ATM but the easiest and most understated way of getting cash out of your checking w/o worrying about fees is just going somewhere that offers cash back w/ debit card purchases like CVS or Jewel. I buy a pack of gum (I like having a pack so I don’t mind shelling out 1.50 for something I’m ACTUALLY gonna get use from). Granted they have limits, most seem to only allow a max of $35 at once but quite convenient if you can’t find an ATM nearby.

  92. David says:

    I use Schwab as my primary checking account, for the following reasons:

    -They reimburse all your ATM fees. This essentially means you can use any ATM you come across. I’ll never go back to a bank where I have to search out one of their ATMs in order for it to be free.

    -Deposit by mail using postage-paid envelopes. Again, so much easy just to drop the deposit in any mailbox rather than find a branch.

    -Overdraft line of credit with no fees other than the interest on the money you borrow. I am not in the habit of overdrawing my account, but we all make mistakes from time to time, and when I overdraw my account it typically costs me only a few cents, compared to $25-$40 at a lot of banks.

    -Great customer service.

    -They don’t take a cut of international charges, and I think they may even eat the 1% that Visa charges them for currency conversion (most banks will pass this on to you and then tack on a 2% charge of their own).

    -Interest rates on checking are down from where they once were, but are still at 2%, which is higher than much of the competition.

    -Free paper checks.

    For my savings, I have accounts with Alliant Credit Union, which is also great. I just don’t use their checking because Schwab offers ATM fee refunds and pays higher interest.

  93. Christopher says:

    I just want to point this out real quick for everyone who does use paper checks from time to time:

    I’ve come into a situation where I wanted to pay back my friend for tickets she bought (she lives about a half hour away, and I didn’t have time to head out there for a few days). I simply entered her name and address into online bill pay, entered an account number of 0, and hit submit.

    Two days later she received and happily cashed the check at her local bank.

  94. constant learning says:

    @prodgod – I must admit, I tried Quicken. However, I write some checks/online bill-pay when at home and do some when at work. It is easier to use a check register to make sure I don’t bounce checks and then enter the checks in Quicken – until I realize that I am doing double the work. Not worth it to me.

    I use QuickBooks and another accounting program at work for the various business my boss owns. I am familiar with the ease of reconciliation on the computer.

    But on a personal level because of the various places for me to enter checks, it is too difficult to keep Quicken up to date. I don’t have a problem reconciling on paper because I am very careful about entering every check and deposit. I am, however, considering using Google docs (spreadsheet) after I make sure the information will be secure…

  95. I was using a major bank a few years ago before I found out about Tropical Financial Credit Union.

    I was spending so much money in overdraft and ATM fees it was ridiculous.

    I started using http://www.tropicalfcu.org as my main bank and was impressed with their services for a local credit union.
    They still offer all the conveniences of a larger bank – ATMs and online banking – but you just feel like they are not making money off of you, which is refreshing.

  96. Battra92 says:

    For my daily checking and such I really prefer locally owned banks and credit unions. I love going in and chit-chat with the young cute female tellers that usually work there.

    YMMV of course.

  97. racerx says:

    does anyone use E-trade high yield checking? They have an interest rate of 3% for accounts over $5000. I know thats a lot but since 3% is pretty comparable to some savings accts i dont feel its too bad. I’m just wondering how it is banking with someone that is only online, as my current banking has a lot of local stores and ATMs, which is actually really convenient. But I am thinking about switching to the e-trade. however i dont see many consumer opinions on them.

  98. Todd says:

    One question: Is the bank USAA?

  99. Middle Class Hick says:

    Trent .. I like your order .. but I would put one thing at the top of this list. I have a teenager, and how they handle “kid’s accounts” is more important to me than anything else. My son’s mother and I are not together and he needs access to his funds all the time. He has an ATM card and 2 savings accounts. He cannot access the second savings account without me co-signing and it not ATM accessable. So he is at his mother’s and wants some of his available cash for a present or popcorn at a movies, he can swing by an ATM. I make him save 70% of everything he makes in his “untouchable account” and 50% of all gifts. This way when he graduates college I will match that account and this is his spending $ for college (I have a separate account for tuition).

    The four things that are deal breakers for me are no fees for having or normal use of an account, free online banking and bill pay (and transfers of funds between accounts), customer service and ease of use (ie. extended hours on work days and weekends), and FDIC insurance. These are absolutes, no way I will work with a bank that does not meet my expectations on these.

    Interest rates and a paper checkbook .. eh .. with online bill pay I pay checks all the time, and my checkbook only goes through 10 checks a year (mostly for the boy and school). Interest rates don’t matter to me much unless it is my primary savings accounts at my brokerage account. I have had such a long relationship with them – I call them and ask for an increase and I usually get it. I also have to have investment options at my brokerage house.

    For me, I put everything in my brokerage account, earning 5% interest. I transfer to my IRA or add more to my securities accounts when I get enough in the money market account for a rainy day and to remain liquid. I use the money market account for all checks (through online bill pay). I use my local account for any rebate checks, birthday money, etc. I get. I also send me a $1000 a month check from my money market account to cover my mortgage (automaticlly drawn from my local savings) and also for spending money and costco (since they don’t take credit cards and I don’t write checks).

  100. BayouBucks says:

    I got an ING Direct account courtesy of the FDIC when NetBank went insolvent. I very quickly became disenchanted with ING. Their website was painful to use and didn’t integrate well with Quicken. I found Charles Schwab and moved my ING accounts in short order. I maintain two credit union accounts from previous employers: one of them has convenient branches in my town if I need to interact with a teller, and I keep both because sometimes one has a better auto loan rate than the other.

  101. C-Stam says:

    I recently switched banks and these are some of the things that I found out while researching.

    I used USBank for 6 years and mainly kept them due to complacency. They have many branches and it made sense for me to keep my money in a bank that was so large and accessible. But, I finally got tired of not earning any interest and being charged for every non-usbank ATM that I used by the bank that owns the ATM AND USBank. I looked around for the available features and these are the ones that I realized were important to me: FDIC (almost every bank has this, why bother with ones that don’t), Online bill pay that is easy to use (after reading about it I realized I wouldn’t like Metavante’s), some amount of interest (I found many that gave from 2-4% interest (as of June 2008) and ATM reimbursement.

    I consulted some websites in my search for my new bank for my primary checking account;
    and http://bankdeals.blogspot.com/ were very helpful. Especially the offshoot of the bankdeals website: http://www.highyieldcheckingdeals.com/

    You can go through and find your state and it will give you the best percentage APY and you can see his blog posts about the bank and deals that they have. Extremely helpful.

    I realized that I never actually go inside the bank except to make deposits sometimes, mostly I just used the ATM, and only because I would get charged everywhere else.

    After looking around I decided on Charles Schwab’s high yield investor checking. I get unlimited free ATM reimbursements, free checks and prepaid envelopes, free online bill pay (same system that USBank used, but the updated version!) and a very easy to use and friendly website. And I have dealt with customer service and they were very friendly to me (and were in the United States too!).

    I also decided to open a credit union account with Midwest Financial in my resident state of Illinois, they give you 7% interest simply by signing up for online statements and using your debit card 10 times a month. I use this account mainly as a secondary savings account (can’t beat 7% interest!)

    I am very happy, I have saved over 50$ so far just from ATM reimbursement (more if you count what US Bank would charge me) and have earned 10$ in interest, just from a checking account.

    I was timid to switch from a brick and mortar Bank to strictly online, but I’m very glad I did.

  102. kathryn says:

    I use a combination of ING Direct and a local bank. ING for the good interest, a local bank for access. We chose the bank on the following criteria:

    1. Access to a teller. (I actually avoid using ATMs as much as possible. Easy access to cash encourages impulse spending, at least for me.) This bank has a branch within a quick walk of our house, another on the way to my work, and another a short walk from my daughter’s school. AND they have extended hours (open til 7pm weeknights AND hours on Saturday and Sunday. Inside hours, not just drive through. In fact we opened the accounts on a Sunday afternoon.)

    2. Easy online access. This is really important for me. I used to have accounts at a local credit union…and I liked them, until their I had trouble with their on-line access and downloads and was told “We only support Windows.” (I have a Mac.) Too bad for them. Bye-bye!

    3. No/low fees.

    4. Interest rates.

    Of course, only an FDIC bank.

    – K.

  103. Jim A says:

    I agree with Debbie M. The “slime factor” is a big deal. I just left a bank that seemed to change their policies every time I needed something from them.

    I would also not use a bank that only supported IE. On-line banking makes be very concerned about security issues. My current bank is okay with Firefox, but uses flash cookies despite a policy statement that they do not track you through cookies. The web support team has promised to “get back to you soon” on the question of what they use flash cookies for.

  104. t says:

    I use ING for savings and Charles Schwab for checking. As long as you open a brokerage account linked to your checking account, both the checking and brokerage accounts are free. Schwab has no minimums, unlimited ATM fee refunds, a competitive interest rate for a checking account, free pre-paid deposit envelopes, free checks, and wonderful customer service.

    Both ING and Schwab have impressed me with their excellent customer service; heck, someone from Schwab called me when my account was first opened just to make sure all of my questions were answered, etc.

    My system sounds a bit wacky, but it works for me. I didn’t see why I had to pay fees to access my money, and neither does Schwab.

  105. volksdaven says:

    One thing ING can not handle is any international transactions you may need. Even though they are owned by a large dutch bank, they won’t take international transfers. Even if you route that transfer through a domestic bank and send it in as an ACH. Sad really.

    I use E*Trade now and I love them. They have a broad range of products, great rates and decent customer service.

  106. Constantin Steff says:

    I checked ING Direct website but I don’t see any checking account offerings from them. Am I missing anything here?

  107. Spider says:

    The savings accounts have a limit of 6 withdrawals… that seems to be a standard thing, at least with many online banks.

    This is not a standard thing to any one bank, this is Federal Regulation D and it applies to anything considered a ‘savings’ account. (Money Markets count to this.)

    As for what I look for? Flexibility in account setup (ways to avoid fees are fine, I don’t pay fees and I’ve had several accounts that could potentially charge me fees) and people at the bank who know what they’re talking about. 18 year old tellers are all well and good, but I’d like to actually be able to sit down and talk to a banker in person when I want to do so.

  108. shannon says:

    I NEVER chime in on discussions, but I feel so strongly about about this topic I had to break that rule. As a small business owner who has multiple accounts (ING for savings, Commerce for LLC, and Webster for sole proprietorship) I have discovered that I hate banks! I am almost ready to be the crazy lady who hides her money in her mattress!
    I have never had a bad experience with ING or Commerce but my past experiences with Webster (a Connecticut based bank that is AWFUL) Bank of America, Wachovia, and Peoples United have left me very skeptical. I have come to realize that no matter how good of a customer you are, they don’t care! They are a business and their main purpose is to make money any way they can. Unfortunately, over the past 10 years increasing fees and the questionable practice of the order in which debits and credits are applied have become the norm.
    I really hope that the destructive practices of the banking industry will become a focus of consumers, because we really are letting them take money from us that they should not have a right to.

  109. grant says:

    – Like many other commenters, I can’t believe that some people will stay with banks that charge them so many fees.

    You might have a different view if you lived in the UK. I’ve changed banks twice now and probably won’t again – I am not convinced it’s worth two days (minimum) of my time to check and doublecheck the mistakes invariably made by UK banks to earn .000N& more interest…

  110. James says:

    I love USAA. I can use any ATM and they refund any fees the ATM owner charges (up to a liberal limit I’ve never come anywhere near). Free web bill pay and bill presentation for a lot of places. I can deposit checks by dropping them in the mail in pre-paid envelopes, or if I drop the envelope off at a UPS Store, it’s credited the next day. But the coolest feature is that I can deposit any check by simply scanning it on my scanner.

  111. Tilley says:

    I use a local bank for check deposits. All my other money, including my payroll is direct deposited into a high-yield “Rewards Checking Account” with Lee County Bank and Trust, and look up the “BIG ACCOUNT”. I am getting 6% APY annually, free ATM refunds (up to 10 per month) and free Bill-Pay.

  112. Marty says:

    I used ING Direct for a while and really liked it, but the interest rates continued to go down. I switched to E*Trade for both checking and savings and love it. I can withdraw from any ATM and the fees are automatically refunded, and I get an email for every deposit, bill-pay, ACH transaction. The checking account pays 3% interest if your balance is at least $5,000, which is not a problem when the interest is that good. My only complaint is small – I have to logon to the website and download a QIF, I can’t automatically download transactions from within Microsoft Money.

  113. aaron says:

    NetBank was SO much better than ING. But when the FDIC closed them down ING took over. (OK, so NetBank had one downside) ING is still much better than ANYTHING else I’ve found.

  114. Marty says:

    To C-Stam: I searched Google for a credit union or bank named Midwest Financial in Illinois, paying 7% interest. No luck, what is the website?

  115. Yan says:

    WaMu disappointed me badly recently. I honestly think they are going to hell with their customer service

  116. Jenn says:

    So very late posting to this discussion… My family has been banking with Everbank (everbank.com) for 5 years now. I think they meet your criteria and the one time I’ve needed customer service (lost wallet) they’ve been very responsive. I highly recommend them.

  117. Megan says:

    I am slowly but surely getting away from my brick-and-mortar bank–partially because we’re planning on moving across the country, where said bank has no offices, and partially because I am sick and freaking tired of overdraft fees.

    As of this moment, I have my “emergency fund” and “moving money” in an ING Orange Savings account, and I have opened two “fun money accounts” (one for me and one for my husband) at Charles Schwab.

    I figured moving our fun money to Charles Schwab was a good move when we were hit with overdraft fees of over $100 because my husband missed a decimal when he balanced his fun money checkbook. He was off by $.10, and they charged us $100. It just makes me ANGRY. Anyway. I learned from another financial blogger that you can remove the possibility of overdraft from your account at Charles Schwab, you just have to ask them. And once you’ve asked, if you only have $30 in your account, and you try to spend $35, your debit card doesn’t let you. Which is amazing.

    Note: As I understand it, that only works with debit card purchases (which is perfect for a separate fun money account), and you can still bounce checks if you write them from the account. I’ve not tried it, though, so I don’t know.

    All of which is a long-winded way of saying that I ‘m with Todd (#7), Kenn (#32), and t (#104) in their support of Charles Schwab. And, in talking to one of their very helpful, very American customer service representatives on a SUNDAY, if you’ll believe that, I learned that they are working very hard to set-up online transfers from their checking accounts to outside institutions.

    The person I spoke with was very apologetic that it wasn’t up and running yet (which is the only reason I haven’t moved our primary checking account), but that it should be in the next few months. FYI.

  118. Rosa Rugosa says:

    Just executed my first online bill payment transaction. Took all of a minute, and I saved what will be the the first of many stamps I’m sure. Thanks for the nudge!

  119. Sue says:

    My most important features:

    1. FDIC insurance
    2. good customer service/low or no fees
    3. a walk-in branch so I can lip-read due to a hearing loss. I want to able to do my banking by myself or independently of my parents. If I use ING, I may have to ask my parents to call them for me.

  120. I have felt for years that credit unions for most people are a much better way to go for most people as they usually have lower fees, don’t require large balances and will make the funds that you deposit available immediately where some banks will require about a week until the funds are available.

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