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Kiplinger’s put out their annual 2008 Best List ^[3] and the best online savings account ^[4] for 2008 is FNBO Direct ^[5]. FNBO Direct is the online savings account arm of First National Bank of Omaha (FDIC Certificate #5452), a bank that’s been in business since 1857 (it’s only been “insured” since 1934 because that’s when the FDIC was created). It’s a bank that has weathered its fair share of financial and political storms in those 150+ years of existence and has nary a scratch.

The reasons why Kiplinger named them the best online savings account are the same reasons why I like them – a high interest rate (now 3.25% APY), a simple signup process (it took a few minutes), and a ton of helpful banking features including linking to up to three banks via ACH and online bill payment (with ATM access). The only minus I can think of is the plain and basic interface, but that’s hardly worth mentioning because I don’t need a lot of flash… I’ll take a higher interest rate.

Another bank that has a higher interest rate and similar online flexibility is E*Trade Bank ^[6]. They offer a 3.30% APY that beats FNBO Direct by 0.05%, have an extremely versatile online system that lets you link up multiple banks, and has the added benefit of instant access to a brokerage account should you want it. The only downside that I see with E*Trade at the moment is that their future is uncertain. The stock price has sunk below a dollar given recent news that they require funds from the TARP in order to stay afloat ^[7]. Your funds are always protected by FDIC insurance but the spectre of insolvency certainly gives one pause.

Undoubtably, the fact that FNBO Direct ^[5] has not been in the news probably played a role in their being named the best online savings account. There is such a thing as bad press… especially if it’s about your potential demise!