Ask the Readers: The Best Online Bank for Service and Security?

I do not have an online account currently, but I have always heard great things about Ally Bank. They look very reputable and offer very competitive rates.

I have used ING Direct since 2004. I have never had a problem, never had my identity stolen, and never been able to get at my own money. I’ve also never paid them a fee for this account, and have always had a “competitive” interest rate on it.

It always takes more than 2 business days to transfer the money out of that account, which to me is a PLUS because it means I cannot make a spontaneous purchase without some down-time to think it over!
I have made thousands of dollars in interest over the last 6+ years with that account, and I have set up a recurring transfer of $100 out of every paycheck so that my savings are automatic.

Whenever I have had to call ING Direct for a question or look at their Help pages, they have been EXTREMELY friendly, helpful and easy to understand! They are like a group of friends or long-lost-cousins that I interact with on my savings goals.

I use Charles Schwab High Yield Checking and ING Direct for savings. Both pay decent interest relative to other banks, although as JD notes, the difference is minimal. I’ve been extremely happy with Schwab for checking, as they allow for free ATM withdrawals anywhere (from any ATM), interest on a checking account, and you can mail in your checks with free postage paid envelopes. For the latter, I realize that that is a downside to some people, but I love the feature. I never have to go to a physical branch to deposit anything, and I can withdraw from anywhere for free.

On the flip side, I haven’t been extremely pleased with my ING account. Sure, the interest is competitive, but I have had more problems associated with this account than any other I’ve held previously. You must call in a few times to verify your identity, you must answer extra questions each time you log in, and you can’t login with anything other than a 7 digit number they randomly select. You’d think an email or username would be easy enough to use, but apparently it’s not secure enough!

I’ve had an Ally savings account for almost three years. So far, no problems with security, transfers in and out, online statements, or customer service. No minimum balance or monthly fees. There’s a limit of six withdrawals (unlimited deposits) per cycle, which doesn’t affect me as I don’t make that many. When I opened it, the interest rate was 2.25%; now it’s 1.09%. I have been mulling BankDirect, which earns American Airlines miles every month based on balance, but haven’t read enough to make an informed decision.

First, answer this: how does a person at the client side of a bank’s internet operation KNOW if a bank is secure? Just having a lock icon in the browser bar hardly means anything; they could have a “secure-looking” site, but still be vulnerable to cookie forging, SQL injection attacks, man-in-the-middle attacks, any number of things.

There’s no way for the consumer to audit the bank’s internal security practices. Maybe their security on the client side is air-tight, but they have B2B interfaces with more holes than a sieve. Any bank, even a storefront, can have such electronic security problems.

FWIW, I make a living writing and maintaining online systems that handle millions of tax returns a year, and what I know is that there’s no way I CAN know if any given bank has good online security, unless they allow me access to audit their code, their equipment, what operating systems they use internally and what their practices are in maintaining and configuring them, their backup practices, and any number of other things.

Luckily, due to several federal laws, my systems, and I assume banks as well, have to pass annual 3rd party security reviews, and we’re required to fix problems that they find before getting certified.

I use Ally.com, but only for a couple of months. I’m impressed by their customer service, and I have no reason to believe that they have security problems.

I use ING, USAA, and SmartyPig, all of which have proved to be convenient, secure, and very user-friendly; they also offer competitive interest rates on savings and cd’s. I have also had good experience w/PNC’s online banking site (this is the only bank with which I occassionally deposit a check at their physical location).

I’ve had ING accounts since 2007, and the only downside I’ve seen so far is that they charge a 1% international transaction fee on their checking accounts (lower than some others though) and you can’t link up an international account, but that probably wouldn’t be a factor for most people. The service is great; they’ve been quick and helpful, when I’ve needed to have questions answered.

We use ING Direct for our emergency fund and I feel that it is very secure (even more so than my local bank). It does take 2 days as mentioned above for a transfer, so I keep a small amount in a local savings account for immediate access if I need it. I have made a withdrawal on the account once and had no problems.

My advice on this:

1. Get a list of three banks that have the features you want. If all you need is a savings account, this is pretty simple. But if you need wire transfers, free ATMs, stock purchases, and IRAs it, obviously, gets more complicated.

2. CALL each bank two to three times with questions so that you get different people on the phone. This tells you where the customer service is coming from (you don’t want offshore customer service), how friendly the service is (remember, there is going to be a significant issue whenever you call), and their ability to provide the CORRECT answers.

3. If there is a tie in the customer service category, use interest rates and/or fees to decide.

For me, I needed all the services listed above. For that, I really like Charles Schwab. Their offerings are VERY good, customer service is excellent, and your information is always available. Downsides are that their website can be a pain to use and that there is still paperwork that has to be mailed to them for each account you open. If all I was looking for was savings though, I’d probably go with ING.

I’ve used ING since 2004 and still have an account there, but now keep most of my cash in SmartyPig. Both have been very good with customer service, transfers, etc. I would highly recommend either of them. SmartyPig has slightly higher interest rates and I like the interface, but ING is a solid choice, as well.

FWIW, since the comments are mainly about customer service rather than security (as I said, all most people can say about security is that they haven’t had any money stolen yet)…

I’ve only been doing online banking since November, with Ally.com, but in that time I’ve called them 3 or 4 times and each time I’ve gotten hold of a human in less than a minute and they’ve been knowledgeable, friendly and helpful.

I just opened a checking account with them in addition to the savings account I had originally. I was considering a money market account, but since I can transfer money from savings to checking instantly, and they will automatically (and for no charge) transfer money from my savings to checking to cover overdrafts, and the savings account pays the same interest as the money market, I don’t see the point of a money market account, especially since the money market carries (a small amount of) risk.

It seems to me that keeping the money in the savings account and linking that to a standard checking account pays the same as money market and earns as much interest.

I currently use ING Direct, Ally, Smartypig, Charles Schwab, and PNC (very rarely go to ATM or branch). Each has a slightly different interface. They are all capable and unless you don’t understand something on a particular site, it comes down to which one you like the most.

USAA hands down. I’ve worked for three banks (two of which include Wells Fargo and Key Bank), and I find USAA’s online to be the most secure and the least annoying at the same time.

For example, I can change my username, which is great. When I set up my online banking with them in 2004, I used a username that I use everywhere on the web. When I realized that was a mistake, I was able to log in and change my username by myself. I wasn’t able to do that with Key.

Also, they ask additional security questions only when it makes sense to me, like if I’ve typed my pw in wrong or if I’m using a different IP address.

I’ve been with ING since 2001. My money has earned thousands in interest, it has been easy to move money back and forth between them and my day to day bank, and they’re always great when I call them up (changing the amount going into RRSPs).

I also really like their TFSA quickstart (TFSA is a Canadian program that lets you put in up to $5k after-tax money annually and it grows tax exempt) initiative that they’ve done the last few years. Basically they give you 2x the interest on their savings account a couple of months before the end of the year if you put it into a pre-TFSA, and then on Jan 1 they move all the money into your TFSA. I like being rewarded for doing the smart thing.

I never had a problem with Virtual Bank which we had. Customer service was certainly good, and the Money Market rate at the time was good.

Question,if your finances are good enough normal emergencies and such can be handled easily, should the rest of your emergency fund be something more long term, like in an index fund?

I just never liked the idea of locking 5 Grand or more up for what should be a 1 in 20 event. I understand you need enough to cover a car breakdown, or other fiasco, we just had 3 hit at once, but we managed it well. When you’re at the point that you have enough to cover small emergencies, it seems the big ones like losing your job would be better off sitting in a index fund for 3-10 years or hopefully forever. So maybe you have low yield fund A you tap into as needed, and higher yield fund B that you hopefully never need?

I’ve used ING since 2003. It does take 2 days to transfer the money back out, but I really like the convenience of the automatic withdrawal and the competitive interest rates. I have only had to call them once, when I opened up a savings account for my son and entered his SSN incorrectly. I did have to wait 5 minutes on hold, but the person I spoke to was friendly and efficient, and I didn’t have to go through a phone tree to get them.

I signed up for a checking account with them primarily for the bonus they were offering this Black Friday. It’s ok and does what I need it to do. I don’t use it as my primary checking account so I don’t have a whole lot of feedback on it. But their savings accounts are great, and I highly recommend them.

I’ve used USAA for years and loved it. You can scan deposits and use any ATM you want (up to 10/month) without a fee.

My husband also uses ING and I haven’t heard any complaints.

I love ING; particularly the feature that lets you segment out your savings accounts. This lets me have one for EF, one for monthly contributions for year-end IRA contribution, one for travel, etc.

I’ve used USAA since 1996 for banking and brokerage. Their reputation for service and security is unblemished and second to none from my perspective. ING Direct since 2002 for savings and mortgage, again my experience is flawless service and no security issues.