It has been over 15 years now since I opened my first online savings accounts with ING Direct (now Capital One 360) and HSBC Direct (now HSBC Advance). In that time, I have experienced a lot of different service levels and experienced certain frustration (many that I share with BestCashCow readers as I see from the comments on our tables).

Let me begin by saying that I can deal with not making my funds immediately available through long hold times, although 10 business days at Sallie Mae Bank is the absolute maximum I will tolerate. I can also deal with ACH transfers that take a couple of days, although I find Marcus’s and Purepoint’s immediate outbound transfers to be a real selling point versus their competitors.

What I cannot deal with are the following.

1. Touching my Money with Silly Fees. A paper account maintenance fee that users cannot get out of is a pure outrage in an online bank (Incredible Bank). Even with a deposit of $250,000, it reduced the interest earned by about 5% a month (and much more than that for lower deposit amounts). While I am not aware of any banks that are currently charging outbound transfer fees, I have seen banks in the past charge fees of $3 to $5 per transfer. I find it attractive when a bank like Marcus says “We will never ever charge you a fee”.

2. Limiting my Ability to Access My Money. While I am a co-founder of BestCashCow, I have never ever had my portfolio entirely in cash. Rather, I am a self-directed investor who frequently needs to access my cash in order to buy bonds and equities. The very nature of a savings or money market account is that you are getting liquidity. A CD sacrifices liquidity. If I need $100,000 from a savings account, and a bank tells me that I can only have $3,000 right now, I find it patronizing and condescending regardless of their savings rate. I have seen this a lot from some of the lesser known banks on BestCashCow’s tables, but the major online banks (Marcus, Synchrony, Ally, Purepoint, CIT, Barclays, Amex) have never played this game.

3. Not Providing a Fully Functional Website. The major online banks are competing to provide the best interfaces and the best mobile apps (at the moment, I believe Ally has the best mobile apps). But, some banks cannot even seem to offer a working website with high availability times (for example, Banco Popular). Others are angling for your deposits with websites that haven’t been enhanced since 1998 (IGobanking, VirtualBank, Colorado Federal). It is 2018 already! I might be inclined to open an online CD with a bank that doesn’t offer a fully functional website, but I wouldn’t put my savings and money market money in one that doesn’t.

4. Not Showing Inbound Transfer Information Instantaneously. When a online bank takes $500 from a corresponding bank, that information should be listed immediately as a credit to the online account or at the very least as a pending inbound transfer. With some smaller online banks, I’ve had to make a phone call to confirm that they have drawn the money and will credit me. That’s time on the phone that I could be spending doing something else.

5. Providing limited phone support. The great news here is that with most of the major online banks, it is virtually never necessary to pick up the phone to speak with someone. However, if you ever need to, it is nice to know that someone is there. I have been surprised by the absence of phone hour support at some major online banks on the weekend (eg. Sallie Mae Bank). But there are comments in the BestCashCow tables from users who have been simply unable to access phone support at some of the smaller online banks (AbleBanking, VirtualBank).

6. Excluding existing customers from receiving the best savings and money market rates. I have saved the one fault that I really find terribly outlandish until the end. Now that rates are rising, some banks have found it profitable to advertise their new rates, but continue to give existing depositors a lower rate. Of the major online banks, only CIT Bank has incorporated this game into their business model (even now drawing customers in with a savings rate and then to turn and offer a still higher money market rate to new customers). The good news with CIT is that they do allow you to “upgrade” to the higher rate with a phone call. Other banks (like Flushing Bank, through its IGoBanking and BankPurely subsidiaries) require that you apply for an entirely new account to get the higher rate. Still others simply treat existing account holders like pariahs (BestCashCow and our affiliates do not classify Salem Five as an online bank as a result of their long history of quietly lowering the rates that they provide to existing customers without providing any disclosure or evidence of the new rate on their website, as well as their violations of numbers 1 and 2 above).

Now that online savings rates are going up so much faster than those of the major money center banks (Citibank, Chase, Wells Fargo and Bank of America), opening an online savings account as a place to stash your cash makes more sense than it ever has before. But, you should also carefully consider the experience of others. For this reason, we recommend looking at the star system and the comments provided by other BestCashCow users with a bank listing on our rate tables.

Always check savings and CD rates from banks and credit unions near you.

The above article mentions online banks that have been or are current advertisers on BestCashCow and our affiliates. Please read our Advertiser Disclosure.

For many years, ETrade and TD Ameritrade have given customers $2,500 for bringing over $1,000,000 in cash or securities into a new or existing account (these bonuses are ordinarily limited to one per year).

Ally Invest today sent an email to their savings and CD customers, matching the ETrade and TD Ameritrade offer, and offering an additional $1000 (for a total of $3,500) for those new accountholders bringing a total of $2 million or over. The Ally Invest offer expires on July 31, 2018 and you must have completed moving your assets into the Ally Invest account within the following 60 days in order to receive the full credit.

Ally Invest is also offering smaller cash and trading bonuses for lesser deposits. The full details are below.

Cash bonuses from online brokerages, of course, are reported on 1099-MISC forms and subject to taxes at your ordinary income tax rate. TD Ameritrade and Fidelity once gave bonuses in the form of Apple gifts cards (also reported on a 1099-MISC) or your choice of American, United or Delta miles. The frequent flier miles are not reported as taxable and therefore considered more attractive by many.

See how BestCashCow values frequent flier miles from the major programs here.

Brokerage bonuses of this nature usually contain a provision requiring that you not remove the assets from the broker for a year. Nevertheless, a prudent self-directed investor who views online trading platforms as largely all providing the same level of service can easily receive one of these bonuses every year by rotating their account between ETrade, TD Ameritrade, Ally Invest and perhaps others. Even though these bonuses are fully taxable, they represent a nice windfall when you make a practice switching brokers in order receive one every year.

See our comparison of online brokers here.

Following the Fed’s raising of the Fed funds rate in March, we have seen savings and CD rates begin to tick higher as we move towards the Fed’s second meeting with Jay Powell as Fed Chairman.

Powell’s testimony following his first meeting in March continues to indicate that the Fed will be raised by 25 basis points at least 2 more times before the end of 2018 and as many as 7 more times between now and the end of 2019. That continues to cause us to be very reluctant to recommend CDs. However, our president has opted to engage China in a trade war, and against an increasingly uncertain economic environment that creates, small CD exposure can provide some protection within your investment portfolio.

Here are 5 products that have caught our attention as we begin April.

1. Popular Direct – 2.00% Savings rate

Popular Direct is a subsidiary of Banco Popular North America, a bank that continues to be the subject of acquisition rumors. The online bank’s website was recently revamped, and it now has raised their savings rate all the way to 2.00% for new depositors. We generally encourage depositors to be careful to stay below FDIC insurance limits with FDIC limits and we would recommend extraordinary caution here.

2. Purepoint – 1.75% Savings rate

Purepoint is a relatively new name in the space and we have written about the bank before. There is plenty of things not to like about Purepoint (such as odd customer service hours and offering better rates in some areas than others), but the customer reviews on BestCashCow are generally very good. The recent move in their savings rate to 1.75% shows some commitment to continue to be aggressive.

3. Marcus – 2.10% 1-Year CD rate

Marcus is the new name for Goldman Sachs’s online bank. With generally outstanding service, we think that this is a good place to stash cash, and it is the only one of the major online banks where I would consider going over FDIC limits. Their 2.10% 1-Year CD rate is among the best 1-year CD rates. We see very little risk in locking in for such a short period.

Editor’s Note: Marcus is an advertiser of BestCashCow. Please read our Advertiser Disclosure here.

4. Live Oak Bank – 2.40% 18-Month CD rate

Live Oak Bank’s 18-month CD is attractive as it offers a premium over one-year CD rates, yet the early withdrawal fee is only 90 days’ interest which will allow you to withdraw your month early with a payment of only 0.60% of your principal if rates were to move dramatically higher.

5. Live Oak – 2.70% 5-Year CD rate

We certainly are not recommending a 5-year CD at this point in the cycle, but if you were to want to protect yourself from the possibility of a reversal in Fed policy, this would be the one to look at. Live Oak’s early withdrawal penalty for their 5-year CD is only 180 days’ interest. In other words, if rates move up, you can withdraw your money early with the payment of 1.35% of your principal (many other online banks have penalties for early withdrawal of 5-year CDs of at least one year’s interest).

While the above rates are all available online, you may find better rates from brick-and-mortar banks and credit unions. BestCashCow enables you to check the best savings rates for local banks and credit unions where you live. CD rates for local banks and CD rates for credit unions can also be checked here.