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Ally Bank Investigates Possibility Of Buying ING Direct from ING Group

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I‘ve written reviews of quite a few banks on this site, which you can find either through the sidebar on this page, or through the savings account page. While none of the banks really have what you would call great rates right now due to the current economic environment, there are a few that have stood out for me when it comes to other things like ease of use and great customer service. Two of my favorite banks that I've reviewed have been Ally Bank and ING Direct. You can read some reviews of those banks here:

Those two banks are the two companies that I actually use and where I've currently got savings accounts open. One of them, ING Direct, I use for goal savings using their easy to use multiple sub-accounts option. If I'm saving for a car, a vacation or anything else I'll just set up a sub-account where I can save for that goal. Ally I use for my large 10 month emergency fund. I've been very happy with both over the past couple of years, and hope to continue using them.

Yesterday, however, I heard some interesting news. It sounds like Ally Bank is currently in talks with ING to buy their US ING Direct online banking division.

Ally To Buy ING Direct?

So why would Ally Bank want to buy ING Direct, and why would they want to sell? ING Group is actually required to sell ING Direct by the European Union after they gave them a $14 billion bailout from the European Union back in 2008. Because of that they've been considering offers not only from Ally, but from Citi Group and others. As of right now Ally's offer has come the closest to getting a deal done.

Ally Bank is looking to buy ING Direct because they'd like to increase their deposit base in order to have some more stable assets as they wind down some of their troubled lending assets. From the New York Post:

Sources told The Post that Ally, the automobile and home mortgage lender, is looking to acquire the online banking business to boost its deposit base and further fortify the lending giant, which accepted a taxpayer handout during the height of the financial crisis.

Ally's interest comes as the bailed-out lender, formerly known as GMAC Financial, prepares for an IPO in the second quarter. Sources said that increasing its deposit base could be a positive that bankers use to attract investors.

Where Are They Now?

So having Ally buy ING is an interesting proposition, but how close is it to becoming an actual deal?  According to some sources the deal is pretty far along, and the online bank could fetch in the neighborhood of 10 billion dollars.

ING Direct could fetch as much as $10 billion in a sale, according to sources, although it's not clear what deal terms ING is discussing with potential buyers.

Sources said the ING discussions are relatively “far along” but warned that they could still fall apart. A spokeswoman for Ally declined to comment for this story.

So it sounds like they're getting close, but the deal isn't done yet. My bet is that Ally will want to get the deal done sooner rather than later as they prepare for an IPO in the second quarter, and having a more solid deposit base could be a good sign for investors.

What Does It Mean For Account Holders?

So what could it mean for account holders if Ally does end up buying ING Direct?  The effects aren't completely clear, but at least some think it could mean that rates could drop a bit in part due to there being less competition.  From bankrate.com:

I asked Bankrate's senior financial analyst Greg McBride about how accountholders fare when their bank is acquired by another institution. He said that while he didn't want to comment on ING specifically, what happens to deposit rates after a buyout depends on who acquires the bank and why.

McBride says that if the bank is being acquired by a competitor in the same segment, usually yields will suffer, because that bank is probably looking to grow market share by consolidating the competition.

So what do you think of the potential Ally Bank/ING Direct wedding? What would it mean for account holders? Will it be a good or bad thing? Tell us in the comments!

Zions Bank Review: High Yield Savings, Checking, Money Market Accounts

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I’m always trying to stay on top of what the best banks out there currently are, and where you can find the best bank rates currently in the market. I’ve written about quite a few banks here, including the one we currently have our cash stashed at, Ally Bank. We've been happy with Ally, but this past week I heard about another bank that has piqued my interest.

Up until a couple of months I had never heard of Zions Bank. At first I thought that maybe they were a newer bank trying to capitalize on the slow savings market, but then after researching them a bit I read that they were founded way back in 1873, so they've got a bit of history.  Now that they're offering a good rate of interest, and a good slate of account offerings, I thought I'd write about them here.

Zions Bank Background

From Wikipedia:

Zions Bank (Zions First National Bank) is an American bank, and a subsidiary of Zions Bancorporation. According to the company, it is the oldest financial institution in Utah.  The bank has 103 full-service branches and 150 ATMs, and over 2,700 employees in both Utah and Idaho

Zion’s Savings Bank and Trust Company was started by Brigham Young on July 10, 1873. This became Utah’s first chartered savings bank and trust company.

On April 22, 1960, The Church of Jesus Christ of Latter-day Saints decided to sell a majority of Zions First National Bank to Keystone Insurance and Investment Company. Zions First National Investment Company became the majority owner of the bank stock in Nevada on February 17, 1961. Still under the control of the Keystone group, the investment company became Zions Bancorporation in 1965. Zions Bancorporation went public for the first time in January 1966. There were some minority shareholders of Zions First National Bank, but in April 1972 all of the remaining shares were exchanged for Zions Bancorporation shares.

Is Zions Bank Safe?  Is My Money Insured?

With Zions Bank your money will be safe and sound because the bank is FDIC insured. If you deposit your money and the bank goes under, you’ll be fine – as long as you don’t have more deposited than the FDIC insurance will cover. Currently that amount is $250,000 per depositor.  I would never even consider a bank unless they were FDIC insured.

Zions Bank Account Offerings

Zions Bank has several different account types that you can get, but I’ll focus on three of them here – their savings, checking and money market accounts.

Zions Bank Savings Account

The minimum to open a savings account is $100, which is about standard for a lot of these accounts.  One thing that should be noted is that you’ll need to maintain a minimum balance of $1,000 in order to receive the maximum interest rate.  That rate is currently at 1.01% APY – easily among the top interest rates in the nation as of the day this post was written.

Zions Bank Checking Account

Zions bank has several checking account flavors – one for whatever your tastes are.  They have options with great perks, ones with a good interest rate or no fees.  Their three most popular checking account options include:

  • Gold Account Checking – While this account has a $10/month fee associated with it, it has a bunch of services included.  Among them are unlimited check writing, free personalized checks and better rates on a variety of savings accounts. You even get a discount on most consumer loans if you are already a Gold Account Checking customer.  There is a $100 minimum deposit
  • Free Checking – This is the standard free checking account with no monthly free, and a $100 minimum deposit.
  • Free Interest Checking – This account will earn some interest along with giving you free checking, although it may not have all of the options of the other account.  Direct deposit is required and there is a  $100 minimum deposit.

Zions Bank Money Market Account

This account type is going to be similar to the online savings account.  Sometimes a money market account will give you a better rate, but this particular one currently has the same 1.01% rate.  Among the provisions of this account type is a $3 fee for withdrawals at a teller window, and that you can make up to six transfers within a 30-day period.  There is an initial minimum deposit of $2,500.

Zions Bank Account Opening Procedure

Opening an account with Zions bank is a 5 step process that you'll be done with in no time.  First you select the account type that you want along with if you’ll have a joint account holder.  Then you enter your personal information including full name, date of birth and social security number.  Next you choose account options and setup a linked account to fund your savings.  After entering some final details you’ll receive confirmation of how to use your new account once it is approved.

I’m told that your application for an account will be processed within two days and you’ll then be able to proceed and login online.  No problem, and it sounds pretty comparable to opening an account with just about any other online bank.

Open your account with Zions Bank. Click here for details!

Zions Bank Mobile Banking

Zions Bank mobile banking service allows you to bank anytime, anywhere from your smartphone or mobile device. You can securely access your checking, savings or money market accounts to:

  • View account balances
  • Search account activity
  • Transfer funds

There are apps for Iphone, Ipod Touch, in addition to a ton of other smartphones.

Conclusion

At the time that I wrote this, Zions Bank has some of the highest interest rates in the country and all of their accounts are FDIC insured. Add to that their other solid account options, mobile banking, no fees or minimums, good security and solid history, you’ve got a bank you can count on.

If you’re looking for a good high yield savings account where you can put your money, I think Zions Bank should be near the top of your list. To check out the details of their accounts, click on the links below.

Zions Bank Savings
Zions Bank Checking
Zions Bank Money Market Account

Do you have any experience with Zions Bank? Are you using them, and how do you like them? What are the pros and cons of their accounts? Leave us a note in the comments!

Discover Bank Review: High Yield Savings Account

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Over the past year or so I've done quite a bit of research on online savings accounts. During that time we ended up opening an account with Ally Bank that we've been quite happy with. While their rate is no longer the highest, using them has been easy and pain free.

Only now after I had opened my Ally Bank account did I discover that another bank actually had a higher rate than I had realized, and we could have gotten better returns there.  On top of that, from what I'm reading online people are relatively happy with them as well.  That bank is Discover Bank.

Discover Bank History

Discover Bank was originally known as Greenwood Trust Company, and it first opened it’s doors in Greenwood, Delaware in 1911.   They were renamed as Discover Bank in 2000.

Up until just recently they only offered a money market account type, but since then they’ve expanded their offerings to include a full online savings account, along with several other account type options.  Since doing so – and since their rate is near the top of current offerings, they’ve quickly become one of the industry leaders in the high yield savings account sphere.

Is Putting My Money With Discover Bank Safe?

With Discover Bank your money will be safe and sound because the bank is FDIC insured, and has been since 1934.  If you deposit your money and the bank goes under, you’ll be fine – as long as you don’t have more deposited than the FDIC insurance will cover.  Currently that amount is $250,000 per depositor.

Features Of A Discover Bank High Yield Savings Account

Discover Bank’s High Yield Savings Account has a good number of features. Here are a few of them:

  • Low opening deposit ($0) plus no minimum balance
  • Set up automatic transfers from any checking or savings account
  • Rated 5-star Safe & Sound by Bankrate.com
  • Bankrate.com Top Tier Winner for consistently high yields
  • Fast and free online money transfers
  • 24/7 live customer service
  • FDIC-insured to $250,000 per depositor

Opening An Account With Discover Bank

Opening an account with Discover bank sounds like a pretty simple process.  Their website claims that you can open in “minutes”.    Here’s how it works:

Open A Discover Account
  • Step 1:  You select the account type that you’re choosing, along with whether it is a single or joint account.  Enter your personal information including social security number.
  • Step 2: Enter your linked bank account information and enter how much you’d like your opening deposit to be.
  • Step 3: Verify trial deposits and your account is ready to go.

Doesn’t sound too hard!

Open a Discover Bank account. Click here to get more details now!

Other Discover Bank Account Options

In addition to it’s competitive high yield savings accounts  Discover Bank also has other options available including classic CDs, money market accounts, IRA CDs and their traditional credit card offerings. All of their offerings seem to have rates that are currently very competitive or near the top of the bunch.  For more details about their other account options, click here.

Conclusion

At the time that I wrote this, Discover Bank has some of the highest interest rates in the country (higher than my Ally Bank account unfortunately) and all of their accounts are FDIC insured.  Add to that their other solid account options, no fees or minimums, good security and 24/7 customer service and you have a solid bank offering.

If you’re looking for a good high yield savings account where you can put your money, I think Discover Bank should definitely be on your short list.

Do you have any experience with Discover Bank? Are you using them, and how do you like them? What are the pros and cons of their accounts? Leave us a note in the comments!

Annual Percentage Yield (APY) is accurate as of 3/14/2017. Applies to personal accounts only. Fees could reduce the earnings on the account. Rates may change at any time without prior notice, before or after the account is opened. No minimum balance to open.

Scottrade Review: Discount Online Stock Brokerages

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I ‘ve been doing quite a bit of research lately into what options are available to me when it come to finding a good discount brokerage.

I’m finding that there are a lot of good companies out there, so making a decision on which one to use may be a bit difficult.

When it comes time to choose the right brokerage for me, I'll be considering quite a few things. Among them, the costs associated with having an account, how much the trades cost, user reviews and the tools they have available to users.  Today I want to look at one of the more popular discount online brokerages, Scottrade.

Scottrade Background

Some background on the founding of Scottrade, from Wikipedia:

In 1980, Rodger Riney, founder, moved from St. Louis to Scottsdale, Arizona where he and a partner incorporated Scottsdale Securities.

In 1981, Riney returned to St. Louis to open a second branch, but ultimately split apart from his partner in 1985 due to conflicting business models. Riney kept the company name, Scottsdale Securities, and lowered the price of commissions to attract more clients. Riney's approach was successful and by 1991 the Scottsdale Securities had a total of 15 branches throughout the US.

Scottrade.com was launched in 1996 (along with Scottrader.com to supply streaming online quotes to clients). Scottrade.com was successful and grew rapidly amidst the dot-com bubble of the 90s.

In 2000, Scottsdale Securities officially renamed to Scottrade due to the success of their online firm.

Scottrade saw substantial growth throughout the 2000s, expanding from 200 branch offices in 2004 to 500 by 2010.

Scottrade Awards

Scottrade has earned quite a few awards and has been recognized as one of the top online brokers, and apparently a great place to work. Among the awards:

  • In 2011, the firm was ranked No. 12 on Fortune's 14th annual “100 Best Companies to Work For” List
  • In 2008-2009, Scottrade was ranked No. 1 in investor satisfaction with online investing services for the eighth time since 2001, according to J. D. Power and Associates'
  • Scottrade was also selected by Computerworld magazine's 2008 16th best place to work in IT.
  • In April 2010, Scottrade was reviewed in CEOWORLD Magazine ranked 2nd Best Online Investments Stock Broker.

Scottrade Fees, Commissions And Minimums

Probably one of the most important things to consider when opening an online brokerage account is to consider what fees, commissions and minimums you’ll see when using an account.

Stock Trades

When it comes to trading stocks, Scottrade isn't the lowest cost in the industry, but they are certainly among the  most competitive with their $7 stock trades.  That rate is for stocks priced $1 and above, regardless of trade frequency, account balance or number of shares.  Phone trades are $17, while broker assisted trades are $27.

Options Trades

Scottrade's options pricing is at a similarly low $7 per trade, plus a $1.25 charge per contract

Fees And Minimums For An Account

There are no fees for an inactive account, annual account maintenance, account closing, IRA termination, or online statements.

There is a minimum account funding level of $2500 to open a cash account.

Investment Account Options

Scottrade offers a plethora of other investment account options for investors. Among them:

  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • SEP IRA
  • ESA
  • ETFs
  • Bonds
  • CDs

Scottrade Tools & Education

Want to learn more about investing, the markets and trading in general?  Scottrade has  live webinars and on-demand webcasts for members.  They also offer local branch seminars and regional user summits that not only go over investing in general but also specific aspects of using the Scottrade platform.

On the website itself they maintain a knowledge center, have tools for market research and real time quotes, in addition to having a variety of trading tools.  In other words, their website has pretty much everything you could need.

Scottrade Mobile Apps

Scottrade mobile apps

Scottrade also has a great set of mobile apps that you can use on a variety of platforms.  Download the apps for free:

What information can you get on the apps?

  • Advanced charts
  • Technical analysis
  • Market news and analyst ratings
  • Real-time streaming quotes and watch lists
  • Investor fundamentals and market earnings.

Customer Service

Scottrade has been rated highly for customer service, and unlike a lot of online brokers they have a network of almost 500 local branches. If you think you may want to sit down with someone face to face at some point, you may want to consider them as an option.

If you want to reach someone by phone, you can do that as well at (800) 619-SAVE.  Your calls will go into your local Scottrade office to be answered by someone there.

Conclusion

Scottrade is one  of the industry leaders when it comes to affordable online trading and investing.  They have $7 trades, low minimums and fees, and on top of it all they've got local branches and customer service should you ever need it.   In my opinion they should definitely be a contender if you're looking for a discount online broker.

So to review, some of the highlights of Scottrade:

  • Cheap stock trading rates, among the lowest of discount online brokers.
  • Few fees to worry about.
  • Local offices and customer service.
  • No fee IRAs and other investment options.
  • No transfer fees if you decide to go to another service.

Get more information or sign up for an account at Scottrade today

Have you used Scottrade? What has your experience been like? Are you happy with them? Tell us your thoughts in the comments.

Prepaid Debit Cards Often Cost More Than Checking accounts

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Checking accounts and debit cards have something in common: hidden fees that are meant to catch you off guard. If you are trying to figure out the option that has fewer fees, you will probably find that a checking account is cheaper. There are several reasons why.

The Overdraft Factor

Generally speaking, a normal user will find that prepaid debit cards are more costly than checking accounts. At Nerdwallet.com we’ve conducted a small experiment: comparing the fees for a checking account at the ten largest checking account providers against the fees associated with ten prepaid debit cards, including America’s most popular, the WalMart MoneyCard.

On average, a prepaid debit card will cost you more than $19 per month, while the average checking account will only cost $6. In the appendix, you can find more details on how we got these numbers.

The major variable, though, is if or when a checking account holder decides to use overdraft protection, the mechanism banks use to make money on checking accounts. Usually, the overdraft charges assessed on a checking account-connected debit card are incurred by mistake. These mistakes are expensive though, as overdraft charges can be up to $35 per transaction. This can be especially damaging if you get hit with the fee without realizing your account is empty.

How much can overdraft fees end up costing you? A study conducted by the FDIC reports that Americans who overdraw their accounts more than twenty times a year stood to lose more than $1,600 for doing so.

Ultimately, you would have to overdraft your checking account five times a year in order to spend more on a checking account than with a prepaid debit card.

On average, the overdraft fee assessed by America’s 10 largest checking account providers is $33.75, which can certainly push users past the $229.67 in yearly fees that accrue to a prepaid debit card, when added the $81.80 in fees that are paid on the average checking account without overdrafts. But those with the discipline to avoid overdrafts will be best served by getting a checking account at a bank.

In addition, as of August 2010 the FDIC has prevented banks from opting customers in to overdraft programs without consent. So now you don’t even need to be disciplined to avoid overdrafts – just don’t opt in to them.

Rather than a prepaid card, get a secured credit card and a checking account

The state of your wallet will probably benefit from avoiding prepaid debit cards. Getting a secured credit card in combination with a checking account is the best option, for the following reasons:

  • A secured card can build your credit, something a prepaid debit card can’t do.
  • Since you need to pay upfront either way, why not pay for the service that improves your credit as well?
  • The woes of consumers expressed through internet forums also provide a grave warning about the potential of getting scammed by a prepaid debit card. Prepaid debit cards do not have the same level of protection for fraud, disputes, or travel-related incidents that most credit cards do.
  • Many secured cards also allow you to move up to a standard card after a period of proven trustworthiness. So, going with a secured credit card now could end up getting you access to more premium rewards credit cards in the future.

All this goes to show that you are probably better off with a checking account connected to a secured credit card than with a prepaid debit card. According to the FDIC, the number one reason why people opt not to open a checking account is that there is “not enough money” to make use of one. Since having a checking account is so much cheaper than a prepaid debit card, perhaps you should consider whether you can afford not to use one.

Appendix

In order to calculate the numbers above, we assumed that prepaid debit card holders would have 1.5 withdrawals from ATMs, eight purchases, two card reloads, and only one balance inquiry each month. Using these values, we evaluated cards from ACE Cash Express (NetSpend), Green Dot, RushCard, Emerald Card, Net Spend Visa, Vision Premier, Western Union MoneyWise, Walmart MoneyCard, AccountNow, and Pay Power.

For the banks in the comparison, we made the assumption that a checking account will start with a $100 balance, and that account holders would use an ATM that is out-of-network once per month. With these values, we looked at checking accounts from Citi, HSBC, PNC, Capital One, Sun Trust, US Bank, Wells Fargo, Chase, Bank of America, and TD Bank.

This post comes from the NerdWallet.com team, personal finance bloggers and experts in helping consumers find the best low APR credit cards.

Ally Bank Review: High Yield Savings Accounts

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For a while now I've been looking into all the online high yield savings accounts because we wanted to find a place to put our hard earned emergency savings. 

As of this writing, because we're so conservative, we're currently sitting on close to 12 months of expenses in savings.  As you might expect, 12 months of expenses is a nice chunk of change to be earning interest off of. 

We wanted to make sure we were putting our money in a place where it would be earning good interest, but also that it was a solid bank with a good reputation.

Today I’m reviewing one of the banks that we ended up getting an account with,  Ally Bank.

Ally Bank – Who Are They?

The brand – Ally Bank – has been around for a year or two now, although they aren't a new flash in the pan bank.  A lot of people don’t realize is that Ally Bank is the new face of an old name, GMAC bank.  They changed the name in May of 2009 at a time when they were giving the company a face-lift, and giving a promise to be the customer’s “ally”.  While the old GMAC bank wasn't my favorite bank – and the fact that they needed a face-lift from the start had me skeptical.  But when you also factor in the fact that they have one of the competitive bank rates right now, and that so far they've gotten good reviews – I was more than willing to give them a shot.

Kiplinger's Personal Finance named Ally Bank high yield savings account the “Best Internet Account” and “Best For Millennials” for 2018!

Is My Money Safe At Ally Bank?

Whenever you're considering signing up for a new bank account, it's important to find out if  your money will be safe at the institution, and whether or not the bank is insured.  Ally Bank is fully FDIC insured, and has been since August 2004 – under their old name of GMAC.  If  the bank has problems and goes bankrupt, you’ll be fine – as long as you don’t have more deposited than the FDIC insurance will cover.   Currently that amount is $250,000 per depositor.

Fees, Minimums And Other Features Of Ally Bank

Ally Bank’s high yield savings account has low fees, no minimum balance and you can open with zero dollars if you want!

  • Open with $0
  • No minimum balance
  • No monthly fees
  • Ability to create sub-accounts with different names and account numbers.
  • Daily compounded interest for maximum earnings
  • 24 hours a day, 7 days a week customer service at 1-877-247-ALLY (2559) for 24/7 assistance or by e-mail at customercare@ally.com
  • FDIC insured up to $250,000
  • Six withdrawals or transfers per statement cycle.  (mandated by the government for savings accounts)
  • high level of online security

Open An Account With Ally Bank

I opened my account with Ally Bank about 4-5 months ago.  It was pretty simple.

It’s a 5-step process.  You’ll have to give them some basic information (including your SSN and drivers license), and they’ll do a hard credit pull. Then you just set up your initial deposit from your linked account,  set up a few account options and you’re set to go.  No fuss, no muss.

Other Ally Bank Account Types

In addition to it’s competitive high yield savings accounts Ally Bank also has other options available including classic CDs,  no penalty CDs (ability to withdraw early with no penalties) and money market accounts.  All of them seem to have rates that are currently competitive.  For more details about their other account options, click here.

I Signed Up For Ally – You Should Too!

I've now been with Ally Bank for several months, and so far I've been extremely satisfied.  They offer some of the highest interest rates in the country and all of their accounts are FDIC insured (to find current updated rates, go here).  Add to that their solid 24/7 customer service (which I have used more than once) and other account type options, and you have a good solid bank that does what it should.

If you’re looking for a good high yield savings account where you can put your money, I think Ally Bank should be near the top of your list.  I know it reached the top of mine, and was one of the accounts I ended up opening.

Open an account at Ally Bank. Click here for details!

Do you have an account with Ally Bank? How do you like them? What are the pros and cons of their accounts? Tell us your thoughts in the comments!