About a year and a half ago, the world of banks offering online savings accounts was shaken up by a new competitor, First National Bank of Omaha. They entered into the online savings market through a division they now call FNBO Direct. We decided to review their no-fees, no-minimums 3.50% APY savings account.

First National Bank of Omaha is a very well established bank. It’s the third largest privately held bank in North America and has over $17 billion in managed assets. It has offices in Colorado, Illinois, Iowa, Kansas, South Dakota, and Texas. It has about 7,500 employees and a number of subsidiary companies. It’s the fifth largest in house credit card processor and the sixth largest merchant processor. Oddly enough, First National Bank was the first United States company to use fuel cell technology as a primary power source. This bank is not the biggest, but it’s certainly no small potatoes.

The account it self offers a very competitive rate of 3.50% APY. This is about where the top of the market sits right now with a couple of exceptions, but those are really just promotional rates to grab in new customers. When FNBO Direct entered the market a year and a half ago, they were at the top of the interest rate ladder offering 5.25%, and as the Federal Reserve has dropped interest rates, they have continued to remain near or at the top.

The account has some pretty standard features otherwise. You need $1.00 to open the account, and after opening it there are no fees to speak of and no minimum balance required to earn interest. Interest is calculated daily and paid monthly. You will receive an ATM card that you can use at any of their ATMs for no fee and can make up to 5 withdrawals totaling $1000 per day. In order to deposit money you can use electronic transfers, wire transfers, direct deposit, or you can mail them a check.

Although the operation is only a year and a half old, First National Bank of Omaha already has a lot of online experience from their other divisions. FNBO Direct makes use of the Cashedge transaction system which isn’t the most pleasant thing in the world, but it gets the job done. Overall it seems like a very good account with no drawbacks, a great interest rate, and a very good feature set.

This entry was posted on Thursday, August 21st, 2008 at 7:53 am and is filed under reviews. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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