FNBO Direct Online Savings Account Review: High Yield & FDIC Insured

FNBO Direct is part of First National Bank of Omaha, a subsidiary of First National of Nebraska, Inc., and is FDIC-insured–a must when you’re looking for a financial institution. FNBO’s online savings accounts are a top contender.

FNBO History

FNBO Direct’s high interest savings account has won raves since the online bank was launched in 2006. Yields have often beaten those of other online banks, and the account has no monthly fees or minimum deposit amount. Kiplinger’s personal finance magazine named FNBO Direct “best online savings account” for 2008.

As of February 2010, the annual percentage yield for FNBO Direct Savings was 1.4%, a far cry from the 5% and 6% yields of a few years prior, but a lot better than savings account rates at most brick-and-mortar banks, where yields barely beat what you’d get from stashing your cash in a shoebox.

Opening an Account

Opening a high interest savings account is simple–it takes only $1 and 10 to 15 minutes. The Web site provides easy instructions to follow, and the initial application step includes a list of information you’ll need, so you can gather that before you start the process.

After you fill out the application, FNBO will verify it and then let you know whether you’re approved. From there, you activate the account and fund it either electronically or by mailing a check. To fund the account electronically, you fill in the account and routing numbers of another bank account that allows electronic deposits and withdrawals.

The first deposit you make into the account will be subject to a hold, unavailable for withdrawal or transfer until the 10th business day after you open the account. Interest will start accruing right away, though, as soon as FNBO is credited with the deposit–usually two to three days after you’ve made the transfer.

As with all online accounts, there’s a delay up to 10 business days on getting access to funds that you deposit as checks into your account. The delay on transfers is a couple of business days. A next-day expedited transfer is available, but it will cost you $10 per transaction.

A big plus for savers is the ability to open more than one high interest savings account for different goals at no cost. You can have an account for vacations, one for emergency savings, and a third account for a home improvement project, for instance.

The account can be linked to from as many as three other accounts, including FNBO’s online bill-payment account. You can deposit and withdraw money by transferring it online between accounts, or send mobile or e-mail payments directly with FNBO’s PayOtherPeople Money feature. An ATM Visa check card can be used for both an FNBO online bill-payment and savings account.

Watch Out for Special Fees

Watch out for ATM fees, and make sure you stay within the transaction limit–no more than six transfers and withdrawals from the account each statement period. Also, be aware there’s a monthly dormant fee of $5, and a $2 fee on each PayOtherPeople transaction.

As long as you avoid the fees, FNBO Direct is a good deal for saving online, and definitely deserves a consideration if you’re scouring the Web for the best yields on your high interest savings account.

We’re interested in hearing about your experiences with FNBO Direct’s high interest savings account. Post a message to let us know what you think.