On-line Banking

This is under government and finance - but it's personal finance.

Has anyone here used an on-line bank? I am seriously considering it, but am a bit hesitant.

The problem is that the big banks no longer pay interest on savings accounts. I have put what money I have in several different banks, just to be sure it is all FDIC insured. I have money in Chase, a bank that I find despicable, but their local branch is handy so I opened one savings account there. That was about three years ago, and they were paying one percent interest. I looked over this year's statement from Chase (I normally just shove them in a drawer unopened). Even though the Fed rates have remained nearly constant since I opened this account, the interest rate was down to 0.05 percent in January. By June, it had fallen to 0.01 percent. That is the lowest interest rate that a bank can pay and still list the account as interest bearing.

So I'm getting a whole $25 a year in interest on that account. Before the debacle of 2008, it would have been around $10,000 per year. No bank pays their depositors any interest any more, but I thought I could do better than $25! Today, I got a letter from a bank with which I have my credit card (yes, I have only one credit card). They have an on-line bank, and they offered 0.75% interest, and a $500 cash bonus if the deposit is at least $50,000 and is left for 90 days.

Now, 0.75% is extremely low and is unforgivable considering the interest rates that bank charge its borrowers, but it's 75 times what Chase is giving me - and I hate Chase on principle - so I'm considering it.

But the idea of just shipping off a large chunk of change to an internet site is bothersome. So I'm wondering if anyone else has used an internet bank and how it has worked for you.

No. I do a lot of stuff online, but it's with mainstream banks like Chase and Citi.

I bank exclusively with Credit Unions. They're owned by the members and are non-profit, so fees are lower or non-existent, interest rates are higher and customer service actually exists. Though not insured by the FDIC (which is SEVERELY underfunded), they're insured to the same limits by the NCUA -- which is actually solvent.

Just yesterday I finally convinced my aunt to pull all of her money out of Chase. I spent 3 weeks trying to get myself set up as a co-signor on her account (I'm her POA and her executor) and never have I dealt with any organization so fucked up, so un-customer-friendly, so unsure of their own procedures. I dealt with a dozen different people and got a dozen different answers and only completed the task with the help of a senior headquarters manager. I was so disgusted I recommended vacating the bank ASAP.

Many years ago, I deposited my paycheck with BOA and got a receipt from the teller. A week later I started bouncing checks. I inquired why they were bouncing my checks (at about $35 NSF fee each) and was told my account was out of money. When I sat down with an account manager it became apparent my paycheck had never been credited to my account. I showed him the deposit slip from the teller -- and he told me that was "not sufficient paperwork." I closed that account later the same day and never looked back.

I have had mortgages with BOA, CitiBank, Source One, PNC, Countrywide, and Wells-Fargo. All of them suck syphilitic donkey dick.

Meanwhile, I currently have accounts with both BECU (Boeing Employees CU) and CFCU (Cascade Federal CU) and been totally, completely happy with both of them. I do all of my banking -- including paying all bills -- online. It's the way to go.

It wouldn't matter if there was a branch nearby.

By the way, ALL banks (even CUs) pay next-to-nothing as interest, because the prime lending rate is still effectively zero.  CFCU pays 0.25%, my aunt's Chase account paid 0.01%.

Good reading.