Internet based banks have exploded in the last few years. Consumers are finally discarding some of their stereotypes about the safety of personal information on the internet and participating in online banking and opening internet based financial accounts. Many consumers are opening online brokerage accounts, and some consumers are opening online checking and savings accounts. One of the banks offering an online savings account is Virtual Bank. They offer a high-yield money market account offering earning 4.50%-5.00% APY.

Virtual Bank is based in Palm Beach, Florida and is a subsidiary of Lydian Trust Company. The company has earnings of 12.8 million in 2005 and is still a profitable company. In addition to operating Virtual Bank, Lydian Trust Company operates Lydian Wealth Management, Lydian Bank & Trust, Lydian Data Services, and Fortingent. Virtual Bank is one of the oldest online banks around, so the company has a lot of industry experience.

The account it self offers a 4.50% APY for balances up to $50,000. For balances between $50,000 and $100,000, the account earns 4.75% APY, and for balances above $100,000 the account earns 5.00% APY. There’s an account minimum of $100.00 to open the account, and has no monthly fees. The account is FDIC insured.

In order to transfer money to and from your online savings account, you’ll have to use what’s called an electronic transfer (ACH). This allows you to transfer money to and from your existing checking account to make deposits and withdrawals from your Virtual Bank eMoney Market Account. The company does not charge a fee for this service, which is par for the course in online banking.

The account has some limitations to be aware of. In order to open an account, you must be a US Citizen and be of 18 years of age or older. You have to have a valid Social Security Number as well. If you don’t use your account for 12 months, the bank will charge a $5.00 a month inactivity fee. There’s also a hold on transfers into the account of 10 days for the first 30 days of opening an account. After that it becomes 5 business days.

The bank offers a fairly decent financial product, but there’s nothing uniquely compelling about the account. The interest rates are competitive, but there are better rates out there. There’s no special security features or any other must-have features that the account offers that others don’t. There’s nothing bad about the account, there are just better options elsewhere.
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