E-Trade Bank Complete Savings Account at 5.05% APY: Feature Review
Another no-fees no-minimums online savings account has arrived. This time it’s E-Trade Bank with the Complete Savings Account. After looking around, here are what I see as the pros and cons of this account as compared to other online banks.
Pros
- No minimum balance, $1 to open, no account fees
- Competitive, but not exceptional 5.05% APY interest rate.
- E-Trade Bank has a great online funds transfer system. It is CashEdge-based so you can basically link almost any external bank account (also seen at HSBC, Bank of America). But what sets it apart is its transfer speed, allowing round-trip funds transfers with zero days of lost interest. Transfers both in an out are free.
- If you use E-Trade as your broker, can transfer between E-Trade accounts instantly. It appears that you can’t use this as your sweep account though.
- If you keep $5,000 in total bank deposits, you can also get a checking account with no fees and unlimited ATM rebates.
- I have opened a few E-Trade bank accounts in the past (for bonuses), and was not hit with a hard credit pull.
Cons
- Competitive, but not exceptional 5.05% APY interest rate. You may already be getting a similar rate, or be able to do better elsewhere, especially if you have higher balances.
- You may be able to get 5% APY with the convenience of a local bank nowadays at places like Citibank and Washington Mutual.
- I have had bad experiences with E-Trade brokerage, including hour-long hold times and slow service. I’m not sure if the bank has a separate customer service department.
First Impression
If you already use E-Trade, opening one of these is probably a no-brainer due to the lack of fees. For others that move money around a lot, it may be useful to open one these accounts to take advantage of those fast interbank transfers.
Otherwise, it’s pretty much like all the other [Insert Bank Name] Direct accounts out there. Here’s my rate-chaser calculator if you are thinking about switching from another bank. Thanks to Greg for the heads up.
November 15th, 2006 at 11:06 pm
woah! So many online savings nowadays! That is why the rate are still so high and are actually beating some CD’s!
Etrade is great, I have a checking acct and CD. Fast opening!
Too bad I have 2 other online savings or I would sign up.
I am just scared they are going to raise the 5000+ to a better APY over time.
By the way, what is the difference btw MMA and Saving?
November 16th, 2006 at 3:59 am
I would avoid E*Trade–they seem a bit crazy with charging fees on other parts of their business services. Try E-Loan–5.5% savings rate.
November 16th, 2006 at 7:02 am
Money Market Accounts (MMAs) are not FDIC insured, while Savings Accounts tend to be. However, MMAs also have a very, very low risk, but they are not insured by the federal government.
November 16th, 2006 at 7:08 am
This isn’t official in anyway, but I believe a savings account has fewer restrictions than a MMA. MMA’s fall under some regulation where you can only have a limited number of withdrawals from your account per month. This is why for E-Trade, you see:
“Withdrawal limits apply. Under Federal regulations related to these types of accounts, account holders are allowed up to six withdrawals or transfers (for example, using Quick Transfer) from their account in any calendar month. Inbound Quick Transfers are not subject to any limits.”
I believe most places now are offering Money Market Accounts and advertising them as savings accounts, so the difference is really being skewed, but I remember the times where I had two different savings account - the MMA and Savings, and that was the difference between them (and the MMA had higher interest).
November 16th, 2006 at 8:11 am
Recently I was calling discount brokers trying to decide whom to invest with. E-Trade had the worst customer service by far. They transferred me 4 times to different departments and still couldn’t answer a simple question about basic fees. The last CSR told me to find the information on their website myself because she didn’t know.
November 16th, 2006 at 8:49 am
Don’t forget AmTrust @ 5.30% at AmTrustDirect.com; compounded monthly though. $1000 to start their MMA.
November 16th, 2006 at 9:55 am
They have discontinued immediate avail. as of last month
Five days wait time - at least for money to become avail in e-trade brockerage
November 16th, 2006 at 11:29 am
It is worth noting that E-Trade does not keep its customer data secure. On the brokerage side, it was victim to hackers which resulted to losses for many of its users and last month a compromised PC led to identity theft for thousands of customers: link
November 16th, 2006 at 12:12 pm
I have had an account with them (brokerage and stock plan through work) for several years and no issues. When I have contacted them, they have answered my questions. I decided to open the savings account as I had been looking for another place to store money other than ING (5.05 vs 4.40). I had to call them to open account which they did right there and since I had an external account setup through my other accounts, it was automatic. Will see in a day or 2 to see if my account is set up and how it is. Also, no fees for this account unlike their checking and MMA
November 16th, 2006 at 12:28 pm
The MMA is their previous FDIC-insured savings option. I don’t see any reason for anyone to open one now, but I’m sure plenty of people have one from before (I did for a while.)
Money Market Accounts offered by banks are FDIC-insured. Both MMAs and Savings accounts have the 6 withdrawal limits. Money Market Funds offered by brokerages are not FDIC-insured, although they invest primarily in investments backed by the government.
As for the customer service, from my reading various reviews online I think E-Trade is historically *on average* worse than many other brokers.
November 17th, 2006 at 3:04 am
Excellent point… money market funds offered by brokerages (or mutual fund companies themselves) are not FDIC-insured, and in general do not allow you to have an ATM card….but, yes, they are primarily invested in US government obligations and some have comparable interest APY as hsbc, emigrant, etrade, and of course ing.
Interestingly, the interest from a bank MMA or savings accounts are all taxable on state and federal level. The interest (sometimes called dividend income interest) for money market funds offered by brokerages or mutual funds (ie. Vanguard Prime; Fidelity money market) may be state tax-free (depending on your state and % of investments the fund has in US government investments and obligations.) This etrade account looks good; but who knows how long they will keep the rate at 5.05%, and whether later in the future they may impose minimums?
November 17th, 2006 at 3:38 am
BTW, in order to get ATM-owner fees refunded in eTrade’s Independent Checking account or eTrade’s Money Market account, the balance in the account must be $5,000 or more after the completion of the transaction; OR, if you have $50,000 or more in linked bank and brokerage accounts; OR, if you make atleast 30 stock/options trades per calendar quarter.
November 22nd, 2006 at 4:22 pm
Did you miss this one?
Highest APY from what I researched on.
link
November 22nd, 2006 at 10:03 pm
WT Direct looks okay, but E-Loan has a higher rate and lower minimum balance.
Etrade Savings Revew
November 26th, 2006 at 1:37 pm
Thanks for posting MMB. I just opened an E*trade Savings acct using your link. I love E*trade cuz they have same day bank transfers inside and to outside accts. Other banks take up to a week for transfers to post.
February 7th, 2007 at 1:55 pm
I just tried opening an Etrade savings account (I already have a stock option plan there), but I’m confused about the total amount I can transfer from my BofA account. I get this on the transfer page:
“The total funding amount from your Bank of America account cannot exceed $25,000. Initial deposits to CD products are not included within this limit.”
Does this mean that only my initial deposit cannot exceed $25,000? It says “total funding” so I take that to mean that I can never deposit anything over $25K from my old savings account to the new Etrade account. This doesn’t make sense, as it implies I will have to move the money out of BofA to another institution, and then transfer to the Etrade account (which may also have the $25K limit).
Any help would be appreciated. Thanks!
February 7th, 2007 at 2:12 pm
Disregard that last comment. I tried depositing > $25K initially and it gave me an error telling me that ACH transfers for initial deposit cannot exceed $25K. If they had said “initial deposit” in the first warning I would have been better informed.
Not a big deal, but I would have liked to be able to deposit more initially as now I need to wait about 10 days before I can make another deposit. So the rest of my money is still earning a great 2.1% at BofA for now.
February 21st, 2007 at 5:17 pm
i dont think you’ll have to wait 10 days for another deposit, once the account is online you can transfer the funds.
May 30th, 2007 at 3:21 pm
I recently set up a savings account with E-Trade, and have had a very good experience so far. Setting up the account was easy, but my initial transfers would’ve been faster if my *OLD* bank was available for “instant verification”. Even so, E-Trade sent the verification deposits promptly, and everything was up and running within a matter of days.
Also, I found that the customer service dept for the banking side is very helpful — at least with the typical “new user” type of questions that I asked. The online FAQ could be better, it would probably reduce the “dumb questions” that people like me might ask.
Overall, I’d give them 10 out of 10. Great rate, easy to set up, an easy user interface, oh and unlimited external accounts.
October 18th, 2007 at 1:30 pm
After having wasted a week and a half of trying to get a simple on-line savings account opened I have finally given up on E-trade. I don’t know what the problem was but their customer service was useless and impersonal. Not only couldn’t they tell me what was wrong, they couldn’t tell me how to fix it. Thats not really a confidence booster for an institution I’m suppose to be entrusting my money with.
November 17th, 2007 at 6:02 am
E-trade has indicated that their account holders should not be concerned about the financial safety of individual accounts, because E-trade account holders are protected by the FDICA, as well as providing ‘private’ insurance that E-Trade has purchased from Lloyds. E-Trade indicates that each accound is protected by a $25,000,000 Lloyds policy.
Lloyds surely provides coverage, but Lloyds will also have an ‘aggregate’ limit of liability within their policy, which probably would not exceed a hunderd million or so, for these accounts, far less than the billions on desposit. Anyone who might rely on such advertisement, should be wary. Lloyds has no more ability to pay ‘unlimited’ funds than any other insurer. Lloyds would never structure a policy of ‘unlimited’ exposure.