# Educate me about online (virtual) banks
**URL:** https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490
**Category:** Miscellaneous and Personal Stuff I Must Share
**Created:** [May 17, 2007, 6:30pm UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490 "2007-05-17T18:30:11Z")
**Posts on this page:** 7
**Page:** 1
### Author:  [@teela\_brown](https://boards.straightdope.com/u/teela_brown)
#### Post date: [May 17, 2007, 6:30pm UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490/1 "2007-05-17T18:30:11Z")
I’m intrigued by the high interest rates paid for CDs and savings accounts by online banks, but I’m suspicious.
What has been your experience with online banks? If I have a problem and need to speak to a representative, will I find that all their employees are in third-world countries and I won’t be able to communicate? What’s the catch?
Any and all info would be appreciated. 5.25% for a 9-month CD is very alluring, but I didn’t just fall off the turnip truck.
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### Author:  [@Rigamarole](https://boards.straightdope.com/u/Rigamarole)
#### Post date: [May 17, 2007, 7:00pm UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490/2 "2007-05-17T19:00:35Z")
I have ING Direct and they are great. Emigrant Direct is also very popular, and they actually offer a higher interest rate - I have been thinking about switching.
They are able to offer better rates precisely _because_ they don’t operate brick-and-mortar operations (that is, they don’t have branches - ING does have physical headquarters locations, one of which I pass every day on the 405 freeway on my way to work). Lower overhead costs and all that.
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### Author:  [@Canadiangirl](https://boards.straightdope.com/u/Canadiangirl)
#### Post date: [May 17, 2007, 7:57pm UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490/3 "2007-05-17T19:57:15Z")
I’m a big fan of ING Direct…have been using them for 5+ years…with the exception of a pitiful amount I keep in the linked chequing account, all of my money is there. They are CDIC insured which is a big comfort in my world.
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### Author:  [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)
#### Post date: [May 17, 2007, 8:48pm UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490/4 "2007-05-17T20:48:22Z")
I have accounts at half a dozen online banks. I started with ING direct, then got several others.
I’d stay out of CDs, though. I got several at ING Direct, and every time, I later found a higher interest _savings_ account I could have put it in.
You can do better than 5.25% if you look for it. The various banks often offer teaser rates for new customers and new money. I just opened an account at FNBODirect, which offers a 6% rate on their savings account until the end of September. Prior to that, I had most of it in HSBCDirect, which had a 6% teaser rate running from late last year until the end of April. I’m sure that, by the time September comes around, there’ll be some other bank offering 6% or better.
I have not ever had a problem that I needed to contact customer service about, so I don’t know about that. It’s possible that they’re all a hell of phone trees and terrible response times.
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### Author:  [@Nawth\_Chucka](https://boards.straightdope.com/u/Nawth_Chucka)
#### Post date: [May 17, 2007, 9:40pm UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490/5 "2007-05-17T21:40:27Z")
I love my ING Direct checking; only issue is if you have a physical check to deposit it has to be mailed to them. It can take a week to show up in your account. Other than that, they have manymany atms and great interest rates for savings/checking/cd’s.
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### Author:  [@Una\_Persson](https://boards.straightdope.com/u/Una_Persson)
#### Post date: [May 18, 2007, 2:40am UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490/6 "2007-05-18T02:40:03Z")
I use GMAC bank online for numerous laddered $10K 6-month CDs (I think I’m getting an average of 5.25% now, but I’d have to check), and have very good success with them. The only problem I had was an odd web-based one once, which a quick phone call (with a person speaking good English) was able to solve. Their accounts are FDIC insured to $100k, and once you do the first transfer to/from your bricks and mortar bank, you can move money very easily online.
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### Author:  [@amarone](https://boards.straightdope.com/u/amarone)
#### Post date: [May 18, 2007, 2:44am UTC](https://boards.straightdope.com/t/educate-me-about-online-virtual-banks/404490/7 "2007-05-18T02:44:30Z")
I use HSBC for a savings account - no problems at all.