Well, it’s been about a year since I opened my FNBO Direct account. Although I was initially apprehensive about FNBO Direct, I am happy to say that I have now come to trust FNBO and can recommend their online savings account to others.

My initial concern stemmed from an e-mail I received soon after I opened my account. That e-mail stated I needed to verify some personal information or risk my account being closed. That e-mail was followed-up with second one stating the first was in error, however the ding to my confidence in their operations had already been done.

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Popularity: 50% [?]

When the news came out Tuesday about the Fed cutting the funds rate 75 basis points (3/4%), it was a foregone conclusion what would happen next– rates on online savings and interest-bearing checking accounts were about to follow suit. Well, the inevitable happened today for FNBO Direct as they reduced their interest rates from 3.85% APY to 3.25% APY.

There’s still a couple of silver linings though about FNBO Directs‘ rate cut. For one, FNBO didn’t lower the rate by the same amount the Fed did: a 0.60% drop versus 0.75% respectively. The second benefit is that FNBO’s new rate is still higher than some other bank’s rates that have not yet adjusted. For example ING Direct is at 3.00%, Salem Five’s eOne account is at 3.1% and Schwab’s Investor Checking is at 3.01% APY. I expect all of these to drop into the 2’s within a week.

Popularity: 27% [?]

Last year was a year of change for me. I overhauled my system in 2007, which resulted in $892.78 more cash back than 2006’s total of $1,329.97 (a 67% increase). The main catalysts behind this increase were two new cash back credit cards, a new online checking account and a new online savings account.

Starting in May of last year, I switched my primary credit card from the Chase Perfect Card to the Blue Cash from American Express. I continued to use my Chase Perfect Card to back up my Blue Cash card, until it dawned on me that I could do even better by backing it up with the Chase Freedom credit card. So in October, I began using the Chase Freedom as my new backup card.

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Popularity: 59% [?]

Back in May of this year, I opened an online savings account with FNBO Direct because of their high 6% APY promotional interest rate through September 28, 2007. Now that I’ve kicked the tires with them for a few months, it seems time to give an update as to my impressions so far with them.

FNBO did indeed hold true to their word and pay me the 6% interest during the promotional period. They recently announced that their new standard rate is now 5.05%. This was quite a drop, however it’s still higher than what other online savings accounts offer. At the time of this writing, HSBC Direct’s interest rate is 4.50%, ING Direct’s is 4.30%, and GMAC Bank’s rate is 4.75%. Because their OSA is still higher than most, I still have some of my money with them.

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Popularity: 44% [?]

There’s been quite a bit of buzz in the personal finance blogosphere this month about FNBO Direct’s new 3-month 6.00% APY offer for new accounts. I have to admit, curiosity got the best of me, and I opened up an account yesterday to start checking it out.

The application process was fully online and I was able to fill out a joint account application in about 10 minutes. My account application isn’t officially complete yet though, because I still need to wait for the account link verification deposits to show up in my checking account. Once I verify those in a day or two, I should be all set. I’ll share more impressions of FNBO Direct once my account is available.

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Popularity: 24% [?]

On his personal finance blog, Golbguru shares some criteria to look for in an online savings account. Quoting from Henry’s Binary Dollar blog, he reiterates Henry’s first six recommendations, then adds three of his own. Between these two posts, they cover about 90% of my thoughts on the subject as well. Golbguru’s points 8 and 9 are particularly interesting:

8. Recurring/Automatic Transfer facility - This wasn’t on my list in the past, but recently, I have been regularly using HSBC’s recurring transfer facility - it has sort of helped me save some money. If I open an account in future, I would definitely want such a facility.

9. ATM/Debit Card - Again, this is not crucial, but it helps to have this facility available so that you can access your funds in an emergency. Before HSBC offered it’s high yield savings account, we had our money in ING Direct - and ING didn’t have a ATM Card (or a debit card) with it’s online savings account.

I agree completely that an online savings account should have an automatic transfer facility. This facility should also be bi-directional. Here’s why: you can really maximize your interest earnings by having your paycheck deposited directly to your online savings account instead of your local bank’s checking account.

When you direct deposit your paycheck however, it does create more of a need to transfer money in the other direction — from your savings to your checking. You’ll need to automatically transfer money back to your checking account to pay off your larger bills each month such as your mortgage, car payment or credit card statement. Automatically bringing this money down right before those bills are due is a big time-saver.

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Popularity: 15% [?]

I was catching up on my blog reading over the weekend, and I noticed John Chow had some very interesting news to share. It appears that you can get $100 if you open an account with them by the end of this month. From Citibank’s website:

$100 offer is only available for first-time Citibank deposit account customers, and will be paid only once to any individual. Persons who currently have or at any time have had a deposit account at Citibank (or any of its predecessor banks) are not eligible. To receive this offer you must apply for and open a new Ultimate Savings Account by 5/31/2007. $100 will be credited to your Ultimate Savings Account within 90 days from the end of the statement period in which your account was opened. Accounts must be in good standing at the time of the $100 credit.

This account seems to be a direct competitor to the one I use, ING Direct’s Orange Savings Account. At the moment, Citi appears to be offering a sliver better rate than ING… 4.65% APY vs. 4.50% APY, but with a bit of a disclaimer:

Annual Percentage Yield (APY) is accurate as of 05/15/2007 and is subject to change without notice. The rate will apply only to accounts opened through citibank.com or by phone, and may change after the account is opened. Fees may reduce earnings.

I’ll put on the docket to do a deeper-dive review of Citibank’s account, but I wanted to get this piece of news out to you while the offer is still good.

Popularity: 19% [?]