Heritage Bank North America has an online savings account whose interest rate is 4.88% APY as of July 3, 2006. This is one of the highest rates available, but they require a minimum deposit of $1,000. They also charge a monthly fee of $10 if your balance drops below $1,000 on any given day during a month.
Like many online savings accounts, you can only open an account through their website. You can link the Heritage Bank online savings account to your regular bank account, regardless of which bank the account is at (either a chequing or savings account). The account cannot be a money market account, and you can only link one account.
Interest is compounded monthly and payment is based on "simple" interest (365/365). This is information that many banks surprisingly leave off, but most calculate it this way. Heritage Bank's online savings account rate is subject to possibly changing daily.
When the account is opened, the deposit is subject to a maximum 10 business-day hold. If your account is closed within 90 days of opening, there is a $25 fee. Check their Account Terms and Conditions for more fee details and other information. Note that due to new Federal law, appropriate identifying documents are necessary to open an account.
Heritage Bank
Compare
the Heritage Bank terms and conditions with online savings accounts for
Ing Direct, Emigrant Direct, or HSBC Direct. At the time of this
writing:
- Emigrant Direct currently pays 4.80% APY and has no minimum balance requirement and no setup or monthly fees. You can link up to two accounts to their online savings account.
- Ing Direct similarly has no fees, currently pays 4.35% APY, and allows up to three other accounts to be linked to their online savings account.
- HSBC Direct offers 5.05% APY and has no fees, service charges, or minimum balance requirements. You can only link one bank account to the online savings account, with transfer preference given to an existing HSBC checking account. That is, transfers between their online savings account and accounts at other banks may take longer.
Emigrant and Ing have been offering online savings accounts longer than most other banks worldwide. HSBC is one of the first "big name" banks in the US to offer online savings accounts.
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