My adventure in high-yield banking

When I first stepped into the world of online high-yield savings accounts, I chose ING Direct. I had seen the commercials and then when I started reading The Simple Dollar, Trent and other bloggers recommended it. I thought "Hey, good customer service and a higher Annual Percentage Rate than my credit union--sign me up!" I was also saving for my trip to Germany so earning a few extra dollars on my balance to counteract the weakness of the American dollar versus the Euro would not hurt either. So I cheerfully set up the account, waited to get it activated and voila! I was saving big time!

I opened my account in March 2007 and liked the ease of use. I could set up as many subaccounts as I wanted, open CDs and the process was painless. Connecting my ING Direct accounts with my credit union was easy, done with the first account setup. However, as yields started to drop in late summer 2007, I decided to take a look at bankrate.com's list of high-yield savings banks to see if I could find another online bank to put some money in. I chose iGo Banking as it had one of the highest yields and I needed only $1 to open an account.

I found out the hard way I should have done my research better. iGo Banking signup was similar to ING Direct with one glaring exception--I had to wait for my account activation and password via USPS. Nearly two weeks later, I was able to setup my new savings accounts. At this point, the account was 0.5% APY greater than ING so I thought it was worth it.

However, when I went to make a transfer from my credit union to the iGo Banking account, I could not. Why? Unlike ING Direct, which has the transfer to and from the credit union immediately part of the account, iGo Banking had a separate menu for transfers and I had to wait another 3-5 days after I said "Yes, I want to transfer money" to be able to do so. What is the point of an online account that you have to tell it to transfer to and from the bank account the money to start the account was withdrawn from?

Getting statements was the same thing. I was sent to what looked like a third-party web site to set up my ability to look at online statement for the iGo Banking account. This clunky, awkward interface with the third-party hosting made me less-than-happy with my choice. However, iGo Banking does not like people opening and closing accounts at whim. The disclosure on banking fees stated that if an account is closed after less than 180 days, a $10 fee is assessed. Frugal pursuit is cheap so she stuck out the 180 days.

Do not get me wrong: the saving rate stayed higher than ING Direct and even Emigrant Direct, my third online bank, but the experience of using iGo Banking stunk. In fact, during the last month, the computer I had used previously to access my iGo Banking account was suddenly unable to. In fact, it either sent the browser into a loop I had to force-quit or the browser would shut down when trying to access my account. When I called iGo Banking, their solution: use Internet Explorer. They did not care that Safari and Firefox on a Mac could not access their server.

I ended up calling their customer service four times in the last month and each interaction left me feeling frustrated. Instead of addressing my problem, I was either directed to try a different browser (IE on a Windows machine finally worked) or to their web site. When I tried to close the account, I found nothing to tell me how to do it. The customer service representative told me in a very bored tone I had to send them an e-mail. Crazy me, I used the eMail function in my iGo Banking account. Then I receive a message two days later telling me I had to send the requestl from my e-mail address on record to close the account. Again, how was I to know? No one told me and I did not see the information.

Good riddance to bad rubbish. My experiences with iGo Banking were not positive except for the slightly higher interest earnings. However, that was not enough to overcome the clunky, nonintuitive interface, the issues with access, and the third-party redirects for functions that should be integrated with the account. I think they were redesigning the interface so these functions would be integrated, but by that time, I was too unhappy with iGo Banking to care.

I still have my ING Direct account and did my research after the iGo Banking experience before opening an Emigrant Direct account. (At the time I opened the account, Emigrant Direct had higher rates than ING Direct.) Emigrant Direct had similar ease-of-use functionality that ING Direct does so I was immediately comfortable using their interface. While I wish interest rates on the savings accounts were higher, I am satisfied with both banks.