Sage Personal Finance

For many people recently emerging from bankruptcy, getting back on their feet can be a real struggle but a top priority.  Establishing a savings account is a great first step toward financial freedom.  However, it’s important to find a bank or financial institution that rewards customers for their business.  Often, local branch accounts can no longer compete with online only banks that have reduced overhead and can offer higher ROI’s.  And as Richard Barrington of Forbes.com pointed out recently, the Federal Reserve announced in January that it will be keeping interest rates low until “unemployment drops below 6.5%.”  Brick and mortar banks cannot offer a high yield opportunity to their customers in such trying times.  However, a recent article by NerdWallet cited that you can earn up to “10 times the national average just by looking online.”  Below, we take a look at some of the best online banks for establishing savings accounts.

Capital One 360 (Formerly ING Direct)

ING Direct became popular as the first online savings bank and has now been acquired by the Capital One family.  The Capital One 360 account links directly to your current checking account so you don’t have to change banks.  Transfers are free and there is no minimum balance or maintenance fee.  Annual Percentage Yield is a variable .75%.

Other perks include account customization through multiple sub accounts, great for organizing your money and planning ahead, according to Laura at NerdWallet.  You can also deposit checks anywhere using CheckMate.

Ally

Named a Money Magazine “Best Savings Account” in October, 2012, the Ally Online Savings account features one of the highest rates at .84% Annual Percentage Yield and no minimum balance.  The bank charges no monthly fees and deposits can be scanned and submitted with Ally eCheck Deposit – an important feature for any online savings account.  Deposits can also be transferred online or wire transferred with no extra fees for a non-direct deposit.  Or if you prefer, you can snail mail your deposit.  Usability is Ally Bank’s top priority as a premier online bank.  This account also compounds interest daily to grow your money quickly.

American Express Bank

Traditionally known for its great customer service with credit cards, American Express also offers basic online savings and CD’s with APY’s comparable to Ally Bank.  As with our other featured accounts, the American Express Savings Account requires no minimum deposit and charges no monthly fees.  The site is easy to use, application can be completed in minutes and customers can expect the same great service that credit card customers have come to experience.

Sallie Mae Bank

Sallie Mae Bank is probably best known for student loan products but as a small banking service provider, does offer savings accounts online as well.  With an APY of .85%, the accounts are competitive with American Express and Ally.  There is also no minimum balance or monthly charge. 

An added benefit for students is to link their Sallie Mae account with their UPromise account and get up to a 10% match!  UPromise is a loyalty program that pays cash back for shopping with their retail partners.  If you buy an item through a UPromise partner store, you receive a certain percentage back from the transaction from both the retailer as well as UPromise.  When you link your UPromise account with a Sallie Mae High Yield Savings Account, you also receive a 10% annual match on Upromise earnings.  This is a great way for students to save for college.

Finally, students who are already paying on their loans can benefit with 2% cash back for every on time payment – deposited directly into their Upromise account.

While establishing savings after bankruptcy can seem overwhelming, the new online options available to consumers, with varying rewards, make it a worthwhile investment.  Take charge of your financial future and start saving today!

-Suzy S.

Many individuals who are just starting out or who have recently been through a difficult experience such as divorce or bankruptcy are looking for ways to build or rebuild damaged credit.  While there is no substitute for paying your bills on time and establishing a history of current accounts, obtaining a secured credit card can be a major step toward achieving financial success.

Secured credit cards differ from typical unsecured cards in that the card company secures a deposit from the borrower when the account is opened.  There is usually a minimum deposit amount to establish a set credit limit and any deposit above and beyond the minimum increases the credit limit by that amount.  Many secured credit cards also charge application fees and annual fees so it’s very important to shop around and compare rates and fees from different companies.

It’s important to note that while the card does require a deposit amount, often equal to the credit limit, secured credit cards are NOT the same as prepaid debit cards.  A prepaid debit card does not track purchases and payment history and does not report to the credit bureaus.  A secured credit card does – making it a great way to build credit for individuals who cannot get a credit card through any other means.

The Capital One secured credit card is a great example of this option for building credit.  This card ranks high for customer service and does not charge an application fee.  The annual fee is only $29, making it one of the lowest on the market.  The minimum deposit amount is also low, $49 -$199 for a $200 credit limit, depending on your credit worthiness.  This deposit is also payable over time, unlike with many other companies.

-Suzy S.