Finance guys- Can I trust online banks (Ally) which offer much better interest than the branches?

[deereebs]

With some money dumped into a regular money market account at a traditional walk up bank (Key, PNC, etc), it basically earns beans and is as useful as tucking cash under the mattress in a shoe box. Is there any reason to be scared of these online banks such as Ally or even Barclays which offer a much higher interest rate since they don't need to pay for the overhead in running a branch office? What are some things to look out for when opening an account?

Thank you!

 

[antidope]

Yes you can. They're all totally legit. I kept my cash with Marcus (Goldman Sachs) and had no issues. They're pretty much all the same service.

In terms of what to look out for I would just say that if you want your money you'll be waiting 2-3 business days for it once you submit a withdrawal request.

I would tell you to lean towards Goldman since they have the highest yield that I've seen.

https://www.marcus.com/us/en

 

[superantigen]

I bank with one of the better known online banks. They're absolutely legit. Online banks can offer higher rates on their savings and/or checking accounts specifically because of all the money they save from not having brick and mortar structures.

That said, imo, one still needs a traditional bank for convenience. I keep the bulk of my savings (emergency fund) in my online savings account for the awesome rate, but keep an account with a traditional brick and mortar, that I can walk to, so that I can easily access cash.


...

 

[kvsm23vs24]

Definitely. They are FDIC insured. Money is safe. Hopefully you have a good amount of money to put into savings. Sometimes the higher you put in you get a better bonus.

 

[antidope]

Semi relevant but I opted to move my savings away from a bank and into a bond fund to pick up an extra 0.50% of yield. Technically an investment product so you're subject to NAV risk but I'm fine with that.

 

[nawghtyhare]

I have a loan from ally bank
Have thought about opening an account as well

 

[jthagreat]

Definitely do it OP.

Nothing to them beside the 2-3 day wait to transfer money back to your regular account. I think some even offer cards and check writing.