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Tuesday, January 8, 2008

RESOURCE: Online Banks

I'm going to open an online bank account as part of monetizing my cat. Why? Because I want to take this seriously. I think it's easy to trick yourself into thinking you won't succeed, especially when you have another full-time job like I do. Then you never put the energy into your side-streams of income, because you're sitting pretty. Dangerous!

Think about it: some of the most successful people are people who start with nothing. What? Crazy, you say. No, really. Look at George Soros. Here's a guy who almost died trying to get out of Hungary as a kid. When he managed to escape to England, do you think he cared when he got fired from his job at the mannequin factory? No, he kept going with everything he had. So when he got an entry-level financial job, he was well set mentally go all the way.

Not only did he have nothing to lose, he knew how awful losing would have been. He lived through the Battle for Budapest-- Nazis and Soviets fighting in the city. How could he not survive-- and thrive-- when put somewhere people weren't shooting at him? When he had open financial markets and a chance to prosper?

Monetizing my cat has no such risk, even though Zooey's not declawed. Actually, that's not true. The biggest risk is that I don't take monetizing my cat seriously. I don't need it to survive, but that doesn't mean it's not important to us both.

So opening this bank account is a way of drawing a line in the sand. I WILL monetize my cat! It tells me I'm not just fooling around.

But...

WHICH BANKS?

Well, there are a number of online banks. The two biggest ones are:
HSBC

and

ING DIRECT
Both pioneered online banking by offering high rates-- comparable to CDs at brick-and-mortar banks-- by doing everything online. So the drawback is they have little infrastructure.

HSBC in particular only has ATMs on the east coast, and it's hard to find on their website where they actually are. ING has more, and "cafes" in a few select large cities-- Chicago, NYC, LA-- but their ATM indicator is easy to find and they've got ATMs all over, at least in my neck of the woods. (HSBC does pay you back if you use other banks' ATMs and get charged a fee, but I hate the extra hassle.)

HSBC's rate is 4.25% right now in January 2007, and ING is 4.10%. Both were a LOT higher when they opened, but the banking disasters have hit them. (I have found nothing to indicate HSBC may be in trouble, but I'd keep an eye on it. Citi has certainly been roughed up.) Other banks have higher rates online, like Zion's Bank in Utah. Bankrate.com lists rates, but many of the other banks have a high initial rate that drops after 3 months. The Big Two have rates that can change with the market, but they don't hide fees and they don't have radical drops. I don't want to chase my money around and I don't want to spend too much time chasing rates when I could be monetizing my cat. Or, post-monetization, chasing mice with her in these the halcyon days of our youth.

I am leaning towards ING. Why? I've actually never used an ATM. My college friends treated ATMs like overindulgent parents, so I long ago decided not to have an ATM card. Self-discipline. So I'm a little wary of using another bank's ATM if HSBC's ATMs are hundreds of miles away. Also, ING has a great reputation for customer service, just poking around forums online. I want the money there, and I don't want hassles. Sounds good.

Also, some other blogs on the same topic with more detail:
So I'll let you know how it goes! Take care!

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