Unless you’ve been under a rock for the last few years, you’ve gotten 124 PayPal phishing e-mails telling you that your account has been suspended, yada yada, gimme your login and password. New variations come out every day. I bet that more people are being fooled than we know of, mostly due to the shame of admitting it.

I was just reminded me of one way to fight this problem by keeping a “firewall” checking or savings account. Basically, if you do a lot of online transactions with payment processors like PayPal or Neteller, or are simply paranoid about identity theft in general, you can set up an separate, empty bank account to act as a buffer. Let me illustrate:
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Speaking of good local bank account combos, if you have Washington Mutual banks in your area, combining their Free Checking and their new 4.00% APY Savings account (updated rate 8/08, only available online) also makes a great option. You get the convenience of local branches and ATM withdrawals and deposits, plus the high interest rates and online fund transfers of online banks.

I’ve had the Free Checking for about half a year and the Statement Savings for a couple of months now, so I thought I’d post up my experiences with them:

Basics
The WaMu Free Checking account has:
– No minimum balance or direct deposit requirements, open with $1
– Free basic checks for life
– No ATM fees on their end
– One free overdraft per year
– Free outgoing wire transfers.

The Statement Savings account has:
– A competitive 4.00% APY on all balances (as of 5/08)
– Rate is only available online
– No minimum balance requirements, open with $1
– Instant transfer to/from the Free Checking

Opening (and Closing) Process Review
I opened up my initial Free Checking account in-branch, and posted about that previously. However, you must open the savings account online, and in connection with a (separate, new) WaMu Free Checking account. The good thing is that you can open them both in 5 minutes and even fund using your existing WaMu accounts! Here are step-by-step instructions for existing WaMu customers.

If you didn’t already have a WaMu Checking account, you’re all set. But if you did, now you have two Checking accounts. But you have to keep the 2nd one open to maintain that happy 4.00% rate, otherwise it drops to something piddly like 0.25%. So, I decided to close my initial 1st checking account and just use the 2nd one. You know what the paradoxical thing was? I couldn’t close it online or via phone. I had to go into a branch and see a teller. How backwards is that? Be sure to bring all your old checks because they can shred them all for you.

Overall Review
The lack of almost all common fees is great. No minimums, no direct deposit needed, free checks, and so on.

The account is also very convenient. I can deposit checks directly into the savings account at an ATM, maximizing my interest. Can’t do that with an online bank. I can then move money into the checking account instantly online as I need it (limited to 6 times a month I think). WaMu has ATMs all over my area as well so withdrawals are easy too.

The online interface overall is good. It’s simple and it works, so I’m satisfied. The Online Billpay is the same way. I personally like BofA’s system better.

One nice feature that they only added in the past few months in online funds transfer! So now you can link up external accounts using just routing number and account number. They link via the usual two trial deposits. Note that WaMu yanks the spare change back. 🙁 Transfers are free both in and out, making things very convenient.

If you have a good Washington Mutual bank presence in your area, the lack of fees, convenience, and very competitive interest rate make this checking/savings combination very hard to beat.

With their high-yield certificates of deposit as well, it makes a convenient package:

Whenever there is a discussion about a big bank like Bank of America, Washington Mutual, or Citibank, there is always someone with “XXX Bank is evil, they did [something bad] to me, stay away from them!!!” But let’s face it, with thousands of branches it is very hard to get uniform service everywhere. An awful branch in Detoit might be counteracted by a great branch in Atlanta. It’s like getting bad service at a TGIF restaurant.

I have gotten both crappy and great service from banks, but only good service from my local branches of Washington Mutual and Bank of America. This has included the waiving of NSF fees, the manual crediting of missing bank bonuses, and an override of their usual funds availability policy. Two things that I think helped a lot:
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I recently opened a savings account at E-LOAN to try out the new 5.50% APY that a few people kindly pointed out to me while I was gone. Here’s a brief review of the opening process and my initial thoughts.

Basics
This is a new FDIC-insured online savings account, similar to Emigrant Direct, Capital One 360, and others. You need $5,000 to open the account, but after that there are no monthly fees. Per their rates page, they are currently paying 5.50% on all balances, so one won’t need to keep $5,000 there forever. But you may need to keep at least $500 in there (see below).
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Emigrant Direct has lowered their rate from 5.15% to 5.05% APY. If you’re interested in moving to Emigrant Direct’s online savings account with no minimums, why not get up to $20 along with it? Everyone who sent me their Form #2 in August for my Emigrant Direct Referral Bonus should have been paid this week. If not, let me know.

With rates rising, I guess they want some more money to lend out too:

E-LOAN Online Savings – 5.50% APY on all balances. Minimum opening deposit of $5,000, no monthly fees.

Countrywide Bank SavingsLink – 5.25% APY on balances of $10,000 – $49,999, 5.30% APY on balances of $50,000 – $99,999. Minimum opening deposit of $1,000, no monthly fees.

It looks like Presidential Bank’s promise of online funds transfer capability has come to fruition. I see that it is a CashEdge-based funds transfer system, the same system used by Bank of America and HSBC. See the FAQ. Similar to BofA, only incoming transfers are free, outgoing transfers will cost $3.50. This makes me happy though, my two main everyday-use accounts are BofA and Presidential, and now I don’t have to use an intermediary to transfer money between them either way. I need to update my Presidential Checking Review, which is getting dated.

I just added a bunch of external accounts, so I’ll also earn a few bucks for all those 50 cent deposit verifications. Here is a screenshot of the announcement page I get after logging in:
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In my most recent Presidential Bank statement, it proclaimed:

Comings Soon! FUNDS TRANSFER SERVICES Use PC Banking to transfer funds to/from your Presidential accounts to/from accounts at other financial institutions.

No specific dates or info on fees, but I’m excited! They are also no longer sending back cancelled checks, only images. This reminds me, Scottrade was supposed to have online funds transfers by “Summer 2006″…

Multiple people have now contacted me about how the Everbank FreeNet Checking Account offers a good high-interest checking account with a lot of great features. I admit that I didn’t know much about them because their regular interest rates (currently 0.70-0.86% APY) are lower than my main checking account bank, Presidential Bank (4.50% APY Checking, 5.12% APY Savings). But if you ignore the interest rate difference, it truly does have the makings of a good main checking account. Right now I use a combo of Bank of America (deposit checks + ATMs) and Presidential (higher interest rate + bill pay).

Here’s a brief review of what it offers:

Intro Rate of 1.10% – To start you off, they offer you 1.10% APY for the first six months. After that it drops off to the regular interest rates of 0.70-0.86% APY depending on your balance. That’s still much better than most banks. In fact, they “pledge to keep the yield on your FreeNet Checking Account and Yield Pledge Money Market Account in the top 5% of competitive accounts as tracked in the Bank Rate Monitor National Index? of leading banks and thrifts.”

ATM rebates, No monthly minimums, No direct deposit requirement, Postage-paid deposit envelopes – These are all features that Presidential does not have. ATM rebate details:

EverBank will even reimburse you for up to $6.00 a month in surcharges levied by ATM operators (simply use one of our convenient bank-by-mail envelopes to mail EverBank your ATM receipts within 90 days of the transaction)!

Finally, they even partner with other banks to waive ATM fees and make deposits. In my area, they partner with US Bank, which has a pretty big network here.

More Details – Free initial 50 checks. Minimum opening deposit $1,500. Account closed within 30 days of opening – $25.00 fee. $1,500 minimum balance for free Online Billpay.

EverOne Financial Center – This online account aggregation product sounds a lot like Yodlee. I hear it stopped working for Emigrant and Capital One 360 recently after their new security upgrades, but hopefully it’s just a matter of time before that’s fixed. (Edit: Emigrant access is reportedly fixed)

Guarantee: $50 to close your account – If you open the FreeNet account, keep it open for 3 months, pay at least 3 bills online, and still close your account within 30 days of the 3-month anniversary, they will send you a check for $50. Giving you an incentive to leave, that’s new 🙂

Overall, that is a pretty outstanding feature set. I don’t know of any bank that offers the above and decent interest. If you just want the money, think of it as 1.10% APY for 6 months + a $50 bonus. Add in the claims of good customer service, and I may just have to give Everbank a try sometime.

(Side note: Somebody also mentioned City National Bank. CNBT also has a high-interest checking account with no minimum fees, but you need direct deposit and it has this really weird requirement of using their check card 10 times every month for purchases or else you lose the interest. That’s just way too annoying.)

Emigrant Direct‘s rate is now up to 5.15% APY, as promised. Hurray competition!

The old account numbers do work. I just sent a deposit and debit through Capital One 360, which was linked using the old account number, and it worked just fine (screenshot). I didn’t mean to alarm anyone before, I guess the ‘official’ transfer method is still through their linked accounts, but external links are still intact.
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Emigrant Direct released their new site today… and promptly got hammered by the millions of people eagerly waiting to type in their 10-digit access code. I finally just got through.

Most importantly, with the new website you also get a different account number! This is extremely important for those that have externally linked their Emigrant account with other 3rd parties, such as TreasuryDirect or credit card bill-payment systems, and they most likely possibly won’t work anymore. (Added: This is per my discussion with a single rep. People have been getting differing answers.) Transfers initiated at Emigrant’s website will still work.