Review of FNBO Direct

FNBO Direct is an online division of the First National Bank of Omaha. Thanks to a recent post on the Money Blog Network, I learned that this bank was offering a teaser 6.0% APY rate for their online savings account. This is a fully electronic bank, no paperwork or forms. Even their terms and agreements you need to print out (and you should do so).

With my measly 4.5% rate at ING, I was looking for an online savings account that would offer me more. One of the first questions I had was what the FNBO rate would be after the teaser period, which ends in September of this year. Unfortunately, it does not say, and will likely be tied to the market after Sept. Fortunately they do provide their previous rate of 5.25%. This is very competitive with other online savings accounts, so I am confident that it will be okay. As always, check after the period ends to see what rate you are getting.

You have to sign up online through their website. They are fairly new, I learned, so there were some minor glitches. For one, I couldn't seem to return to my application after submitting a secondary user. It kept telling me that my session had timed out. I also learned that the site is not entirely compatible with Firefox. Indeed, I did run into some problems while using Firefox during the application process (however my specific problem was no better in IE7 either) but for regular access and transactions, Firefox has given me no issues. Fortunately I called FNBO and they were able to help me finish my application over the phone. I ended up calling a few times, as I went through the application, and their customer service reps were friendly and very helpful.

Through some of the sign-up process, you will have to wait until you receive confirmation emails (acct #s, etc) before continuing, so don't expect to finish the application in one sitting. In my experience the e-mails were quite prompt, arriving in a day or less.

My first transaction went smoothly and the funds were taken within a couple of days. Setting up direct transfers was easy and there was no 'test deposits' necessary, as there was with ING. It withdrew my initial funding, a dollar, and after that I set up my checking account for direct transfer within minutes. There is a period of 2-3 days when your transfer does not earn interest. Then it appears in your account. This is somewhat of an indirect 'transfer fee' that you need to be aware of. There is a third party that handles their website and transfers.

Outright fees apply to wire and foreign transfers, so if you use those you may want to shop around more.

The site itself is simple and easy to use, with no distracting junk. Read their membership agreement and privacy policy. They do admit to selling your information (and even your transaction behavior) to affiliated parties. If this concerns you, look elsewhere. So far I have not received any solicitations, but certainly if I did they would be lost in the sea of junk mail and credit card offers I get daily anyway.

Overall, I am satisfied with FNBO. It is FDIC insured and the bank has been around for over a hundred years. Hopefully the post-teaser rate will still be good.