In the first post of my "What You Need to Know" financial series, I'm going to discuss online banking...
Online banking is a great option for computer-savvy teens and college students. We're persuing Facebook all the time anyway, so why not open a new tab in your browser and take advantage of the high interest rate savings and checking accounts available from many online banks.
Many banks like Chevy Chase Bank at the University of Maryland offer online banking capabilities to check your balance, pay bills, etc. This is great for keeping track of your spending and preventing identity theft by keeping tabs on your bank balances.
There is also the phenomenon of online-only banks which are banks without local branches, offering high interest rates because they save money not having physical locations. These banks are also relatively paperless, so your statements are free online.
ING Direct and HSBC Direct are the two online-only banks which I have dealt with, and I recently opened an account with SmartyPig because it offers a 2.15% APY rate. ING and HSBC are currently offering only 1.10% (which is pathetic considering it was over 4% when I opened my account in 2008)! HSBC, however, just sent me an email notice about new fees to transfer my balance between banks [!] so I'll be closing that account in favor of SmartyPig.
I am a longtime customer of ING, but I'm planning to move most of my savings and emergency fund to SmartyPig for the time being to get that percent in interest.
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