I finally finished setting up an on-line savings account at HSBC Direct. Somehow, they manage to pay out 5%, so I think it is an excellent place to stick your savings, emergency fund or whatever. It is FDIC insured. The only drawback that I can see is that to do a bank to bank transfer, it can take up to 3 days. However, they do give you an ATM card, so you can use it to get your cash if you need to. There is an upper limit on the ATM withdrawal per day, but I am not sure what it is.
The setup is a little convoluted, but it does work. If you are comfortable about giving them your login information of your primary bank (I didn’t want to), then they can do the setup immediately. The other option, (the one I chose) is to let them do two, small, trial deposits into your account. Then you log into hsbc and tell them the amount and dates of the deposits. Pretty simple.
The only complaint that I have is that your user ID is a 20 digit number (this is not your account number). It is impossible to remember. Also, if you forget your password and try to login more than three times, your account will be locked out. This happened to me, but I made a quick call to customer service, and they were able to take care of it without any problems.
I set up bank to bank transfers with our primary checking account. The process was the same as the hsbc account initiation process (trial deposits or give them your login information). I did a test transfer from our checking last week. I was pretty impressed with the service. The actual transfer took a few days, but I got an e-mail notifying me of the initiation of the transfer, and another when the transfer was complete. These things are good to know.
So, the bottom line here, is that it is hard to find a place to put cash and get 5% with such flexibility. I feel like HSBC’s online savings is a really good deal.