Diversify Your Online Bank Accounts

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For the last ten minutes I’ve been trying to access ING Direct, to no avail (it’s now available, but it was slow for about half an hour). While I’m certain my funds are safe and nothing is wrong, it certain solidifies the notion that you should be diversifying your bank accounts.

Websites go down. In fact, websites go down pretty often and usually it’s not a big deal. However, if the website is your only interface with a bank, then it becomes a very big deal. That’s why I always recommend that you diversify your online savings accounts in the event something like this happens. I’m not a good example, because I recently told you about how I had a dozen savings accounts, but if all of your savings are in one bank, you might want to spread it out a little. (here are some high yield savings options)

If you don’t feel like dealing with more than one bank, here’s another suggestion. Make sure that you can withdraw funds from your online savings account through your main checking account. If you remember my financial network map, my main checking account has no awareness of my savings accounts.

I can’t go to my checking account and try to transfer funds from my ING Direct. That’s bad. If I could, then going down wouldn’t bother me as much. Try to have that in place if you can.

Remember that nothing happens in real time with online savings accounts, so being down for an hour doesn’t really hurt anything. However, hours have a funny way of stretching into days whenever you least desire it.

Just a thought!

{ 25 comments, please add your thoughts now! }

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25 Responses to “Diversify Your Online Bank Accounts”

  1. I use two different credit unions to manage my money.

    They are linked together but if one goes down, I can go to the other one.

  2. Shawanda says:

    I never really thought about the risk of being unable to access the funds in my savings account. ING has treated me well, but that is something to consider.

    I plan on opening an account with Ally since they’re offering a pretty decent interest rate. There’s always the risk that they’ll lower their interest rate, but at least I’ll have the option of funneling future savings into the account with the higher rate.

  3. Keith Morris says:

    Frugal Dad has a funny recent post about secret places to stash some cash for similar reasons:

  4. Jim says:

    It only ever comes up once in a blue moon but if it does when you need access to your cash… it kind of sucks. 🙂

  5. Green_Panda says:

    I have my account with Wachovia linked to ING Direct, but they charge a fee to transfer. If it’s an emergency, however; that would be a minor annoyance.

    • Jim says:

      They charge a fee to transfer money into your account via ACH? That seems ridiculous!

    • Scott says:

      Wachovia charges a fee to transfer money into and out of your account? Since when? What type of account do you have? Or are you referring to the 1-day ACH transfer versus the free 3-day transfer? We’ve made numerous transfers in and out of our Wachovia account to other external accounts over the past year and have never been charged a fee.

      • Patty says:

        I have a Wachovia account and I just read the faq and it says inbound transfers are free , next day outbound is $10.00, 3-4 days outbound is $3.00.

        This is one of many reasons I have been moving away from Wachovia. Only reason still maintain it is it is a walkable B&M bank and large deposits are completely available in full the next day. I have opened an account at a bank right next door to them that has free ACH in and out and cash income that I get is deposited there and then ached to my reward checking account at a third bank which I just opened. Wachovia’s days may be numbered.

    • MoneyNing says:

      ACH transfers requiring a fee does sound a little surprising. Make sure you are setup for ACH and not wire transfers.

      Just a brief explanation, wire transfers are processed through the Federal Reserve
      Wire Network and money is sent very quickly (I’ve seen them being processed the next business day every time I do it) while ACH stands for Automated Clearing House where the transfer act like electronics checks and it takes a few business days to settle.

      • Julio says:

        Some banks do charge for ACH transfers. Bank of America charges $3 for outbound ACH transfers and Chase (who took over WaMu) will be charging us for outbound ACH transfers as starting this month, which is not fair because I was able to transfer in both directions for free from WaMu before they were swallowed by Chase.

      • Patty says:

        It is definitely ACH and not wire transfers.
        I am able to ACH out of wachovia for free by pulling from another account, but would be so much simpler if Wachovia had free ACH both ways.

        Oh well, for several reasons,they went from holding a lot of money to direct deposit of a small part of income that goes right out to pay bills. Basically maintaining it to have a close B&M, next day fund availability,
        and a close, free safe deposit box.

  6. MoneyEnergy says:

    I have a few bank accounts, they are all brick and mortar banks, but they are also fully operable online, so I’ve never thought about their site going down – it’s always still possible to walk into a branch. That could still be inconvenient, though. I have to look more into being able to transfer money between them, even online.

  7. Richby30 says:

    I have three bank accounts.

    1) is where my pay check goes, and is used for all my working capital needs.

    2) is my savings account bank. I have multiple CDs and savings here. Whatever money i have, i send a check here so I don’t have temptation to touch it. This bank has the best rates.

    3) is where i keep all my mortgage debts, so if things get really bad, i won’t led default blow up my other accounts. Not really, but this is how I’ve organized it.



  8. Madeline says:

    The other thing to remember is that many of these banks also have options for phone banking in case their website goes down.

    I bank with USAA & Ally online, and I could get the money I need transfered to my “unaware” brick & mortar checking account if there were a problem.

    Those banking numbers are always good to have on hand.

    • Darin says:

      That’s the comment I was going to make as well. ING also lets you do your banking through the phone. PIN # is the same as online. I haven’t used the phone option myself, but I’m assuming that you would be able to transfer money to your linked account.

      • Madeline says:

        I decided to test out the phone banking at USAA after reading this article.

        Over the phone, it listed all of the accounts (including the external ones) I had linked to my checking account.

        I don’t think it would be a problem!

  9. Andrew says:

    If you’re sure nothing is wrong, what difference does it make if you can’t transfer money for a few hours?

    • Wizard Prang says:

      Because a few hours’ delay may translate into a day late and a dollar short…

      The whole _point_ of a web-based bank is 24/7 availability.

      • Andrew says:

        No computer system has 100% uptime. If I need my savings that fast, I must be saving too much and reserving too little for current consumption.

  10. Patrick says:

    This is a great idea. I currently only have my money in one online baking account and that does become a problem sometime. There was an instance in which I needed the money out of the account, but my account got frozen as a result of their stupidity and couldn’t get me the money fast enough. It would have been nice to have at least another account.

  11. Matt Jabs says:

    I’ll be going with a local credit union to diversify my accounts. Having ING is GREAT, but the limitation on deposits and the lack of diversification is leading me toward opening the CU account. Now I just have to settle on a good CU!!

  12. I am a firm believer in multiple bank accounts in multiple banks– on-line or bricks and mortar . . . just the smart thing to do.

  13. Julio says:

    I have multiple online accounts, but I always link them both ways, meaning that my Ally bank is linked by my WaMu (Chase) account and my WaMu is linked to my Ally. That way I can ‘push’ or ‘pull’ funds from either side. In addition to that, I usually link my online accounts to each other, so My Ally is linked to my FNBO and vice-versa, so when rates change, I can transfer funds laterally, instead of down to my checking and then back up to the other account. In all I have about 6 online accounts, because I use different accounts for different savings goals, but that is off topic.

  14. eric says:

    Never had a problem but thanks for the heads up!

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