In the last few years, there have been dozens of new high-yield savings accounts which offer online access. These banks have attempted to copy ING Direct’s success in the online savings world. One of the latest entries into this market is IGO Banking. They have created a savings account similar to the other high-yield savings accounts available and have brought a very desirable interest rate. Is it where you should put your money? We decided to review the savings account and find out.
IGO Banking is a division of Flushing Savings Bank which is located in New York. The institution was founded in 1929 and offers a number of financial services in addition to its online savings through IGO Banking. The IGO Banking division of Flushing Savings Bank was created in November of 2006, so it is one of the newest members of the online savings world. Bankrate.com gives the website a four star rating, meaning that its customer service is more than satisfactory.
IGO Banking’s high-yield savings account offers a number of features that makes it appear to be very desirable. Currently it is offering an interest rate of 5.30% APY, which as at the top of the list in interest rates except when dealing with extremely large amounts of money. It is quite common for new banks to start off with a very high interest rate to attract customers when just opening the bank and then lower the rate as time goes on. Time will tell if IGO Banking will continue to remain at the top of the list, or will lower their interest rates as so many other online savings accounts have.
The savings account from IGO Banking has no minimum balance, making it a desirable place to start saving money if you don’t have a lot to begin with. In addition the savings account has no fees, so you should not have to worry about any “gotchca’s.” In addition to an online application, there is an option to apply by mail.
The sign-up process is extremely time consuming, because it makes use of the Cashedge financial management system. You have to fill out an application and give them standard personal information, and then wait a few business days for them to put two small deposits in your account. After you verify that information, they will mail you your login credentials, and then you can access your savings account. At this point, you still cannot deposit money into the savings account, because you have to verify your checking account again to transfer money from it. When compared to ING Direct, Emigrant Direct, and the other major online-savings banks, IGO Banking’s sign-up process is much more tedious and time consuming.
IGO Banking also has some rather questionable security measures. When you sign into your account, you are submitting your username and password un-encrypted over the internet. Any one in between you and the bank monitoring web traffic could see what your password is. In addition there are no defenses against key-loggers such as the kind that ING Direct has built in. In the modern age of advanced cyber-crime and identity theft, their savings accounts are seriously lacking in security features.
Since IGO Banking is one of the newest online savings banks, chances are there are a few kinks in the system. It has the best interest rate right now, but there’s a pretty good chance it won’t last. When you take into consideration the arduous sign-up process and the security issues, chances are your money should be somewhere else.
