Not all CD early withdrawal penalties are created equal. I’ve long assumed that the standard penalty schedule of 3-months and 6-months was ubiquitous but with recent news that Ally Bank charges a mere 60 days has thrown by world view into disarray! Fortunately, early withdrawal penalties are disclosed in the Truth in Savings document a bank must publish about its bank products. Understanding them is crucial in our economic times and they often take a back seat to the headline interest rate.

I like to draw this analogy – The interest rate is the flash, it’s like the horsepower of the engine in a car, but knowing the early withdrawal penalty is like knowing the state of your spare tire. Tou don’t want to be surprised at a time of crisis.

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Last week, I wrote about how ING Direct and Everbank offered overdraft protection by way of a line of credit, rather than socking you with overdraft fees. I commented, off the cuff and without doing much research, about how online banks are better than traditional brick and mortar banks about overdraft fees because they aren’t as much a slave to meeting their revenue expectations. I figured it’d be a little unfair if I just left it at that, so I took a look at how online banks deal with overdrafts on their checking accounts.

In general, online banks are cheaper than traditional banks. Some use the same system of fees while some use overdraft protection, charging an interest rate. Some charge one fee regardless of the number of overdrafts in a single day while others hit you for each one. On the whole, online banks are cheaper probably because they can afford to be.

Let’s take a look at some popular online banks and their checking account fees:

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Last year, banks collected nearly $40 billion in overdraft fees, most of it coming from about 10% of its customers. Forty billion. While some of this will be curtailed with the recent CARD Act and its rules regarding opt-in overdraft “protection,” it’s still a staggering sum. Bankrate found that, in 2009, the average overdraft fee was over $30 a piece. While there’s something to said about personal accountability, greed is greed and thirty bucks seems excessive.

That’s why I smiled when I learned that ING Direct does it differently on their checking account. One of the benefits of being an online bank with a fairly new checking account product is that you aren’t a slave to making money. If you were a bank earning billions off overdraft fees, your shareholders would be furious if you jeopardized one of the best revenue streams in the freaking world. If you’re an online bank who isn’t a slave to the money you earn by overcharging your customers, then you can do what ING Direct does – extend an optional line of credit and charge a reasonable interest rate.

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In every professional sport, there’s a concept of a “rebuilding year.” These are the years where the team is working on drafting good prospects, building up their young talent, and crafting a competitive championship-caliber team piece by piece. It’s difficult to field a championship team every year for more than a few years, with free agency and everything, so it’s expected that after a few years of stellar performance, you’re bound to have a few leaner years where you’re rebuilding your talent. The good teams do this well, with strong performing rebuilding years, and others do it poorly.

How does this apply to you? It’s a little downside psychology. With the recent economic crisis, a lot of folks are forced into their rebuilding years. You may have lost your job. Your investments may have lost value. Your money doesn’t seem to get you as far as it used to… you’re down, but not out. So turn this year into a money rebuilding year.

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How would you like to make $1000 risk free starting with just $1? It sounds too good to be true right? It sounds like a scam? Well, 99.999% of the time it’s a scam. This is that 0.001% time it isn’t and when you read through my Grand Plan, you’ll know it’s not a scam.

You won’t get rich with the Grand Plan, you’ll just get a little bit ahead. What you do with your new found wealth is up to you – you can pay off some high interest debt, you can put it in a high yield savings account, you can put it in the stock market, or you can just hide the money in your house somewhere. Whatever you do, please don’t squander it. Once you do the steps on this list, chances are you won’t be able to do it again. Don’t waste it.

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In the last few years, I’ve reviewed several online banks from the gray beard ING Direct to the more recent Ally Bank and Sallie Mae. With each review, there invariably are commenters who are totally against online banks and bring up reasons why it’s a mistake to put your money with an online bank.

They cite reason after reason that brick and mortar is better, failing to recognize that the last online bank to fail was Netbank in 2007 (and hundreds of brick and mortar banks have failed since) and that despite all their concerns, online banks are FDIC insured. Well today I’m going to tackle many of these myths head on and show why they are either wrong or grossly exaggerated.

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ING Direct is offering a $50 bonus for new Electric Orange checking account customers (who make 3 signature based debit transactions in 45 days) and has been for what seems like the last year. You are eligible if you already have their high yield savings account, which makes it especially sweet if you’ve kept one of these lying around in the hopes ING Direct’s rates become more competitive. I consider ING Direct Electric Orange one of the better online checking accounts because you can easily transfer cash between the checking and the savings accounts.

To qualify for the Electric Orange promotion, visit the promotion page and apply for an account using the reference code EM428. If you already have an account, signup will be a cinch after you login since you won’t need to provide any additional information and you can fund the account with funds in your savings account. One word of warning for those with an eye on their credit score, ING Direct will do a hard pull of your credit when you apply because the checking account has overdraft protection (even if you select $0).

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My lovely wife and I both opened individual ING Direct accounts before we were married. In the latest step towards consolidating our financial accounts, we’ve decided to take all of our individual accounts and work towards combining them when it made sense. We’ve left investment and retirement accounts alone but online bank accounts are perfect for combining. Our latest move was to combine those ING Direct accounts into one.

I called a CSR yesterday to discuss consolidating our accounts and learned that the process is much simpler than I imagined. You can’t consolidate two separate ING Direct login accounts but you can add a joint account holder to an existing savings or checking account. This will turn an individual savings account into a joint savings account, let’s see how easy it is.

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