Banking Reviews: FirstFedDirect’s Internet Advantage Savings Account

November 4th, 2007 • Related • Filed Under • by admin

Choosing a place to put your savings is a lot like picking out a shampoo; you have dozens of choices to choose from, and unless you really know what you’re looking for, you’re probably not going to get the best product. One of the more recent entrants into the online savings banking world is FirstFedDirect, which is the online division of First Federal Bank of California. The company is offering a 5.05% APY online savings account, but how does it stack up to the competition?

The account is fairly typical for an online savings account. There are no monthly fees to speak of, and the money in the account is FDIC insured. You’ll have online access to your account and will earn an interest rate of 5.05% APY, which is fairly competitive in today’s market. One odd facet of the account is that even though the bank is located in California, it does not accept deposits from California residents; this is likely to prevent the online division from competing with their actual branches.

FirstFedDirect offers two different methods to sign-up for their account. If you like to do things the old fashioned way, you can print out an application and send it in by mail. If you’re more technological and like to get things done fast, you can sign-up online for an account. The process they have is really quite smooth and will take you about ten minutes. Unfortunately, your initial deposit has to be made by check, but after that you are free to use electronic ACH transfers.

The one major concern with this bank is that they do not offer a customer support email address or phone number anywhere on their website. If you’re having problems getting to your money, you should be able to talk to a customer service representative. If a bank is going out of the way to hide that information, chances are their customer service isn’t the greatest.

There’s nothing terribly wrong with the FirstFedDirect online savings account, but there’s also nothing terribly right with it either. It offers a fairly competitive interest rate, but just haven’t done enough to put themselves ahead of the dozens of other online savings banks available to consumers.