E-Trade Bank has been around for quite a while in the terms of being an online brokerage and savings firm. Helping them out is that cute baby ad that started last Superbowl. Etrade Bank received accolades from Money Magazine in August 2007 “Etrade Bank – A really complete menu of bank features-and at the best rates.”

Currently, their savings account offers 3.30% APY. There are no minimums and no account fees to keep the savings account. They also allow free online bill pay in your online bank and alerts to your phone. Etrade banking also offers one click transfers to and from your Etrade accounts. Like all online accounts – 24 hour access. You can move money to your investment account, if you invest with Etrade. You can move money between your online savings and checking account.

Etrade offers an Automatic Savings Plan for either a one-time deposit or recurring transfers. Be aware however, that this does not limit your loss in during a down economy…it’s just a way to invest. Transfers also need to be before 4 p.m. ET on a normal business day to be processed that day. Which is the way my brick-and-mortar bank works as well.

To sign up, you will need a minimum of one dollar, 18 years or older, driver’s license, and a U.S. resident with a valid social security number to apply online. Etrade can be funded by mailing a check, wiring funds, direct deposit, ACH transfer, or a transfer from another Etrade account.

Be aware of closing your account too early. You need to keep your money in the online savings account for the first 120 days of opening. For new customers, funds from electronic direct deposits will be available on the day they receive the deposit. Cash, wire transfers, and the first $5,000 of the day’s total deposits will be available on the first business day after you deposit it. Excess over $5,000 will be avaiable on the fifth business day. After your thirty day probation period is over, it will be next day posting. You will be charged $25 for each stop payment and insufficient funds transaction. Cheaper than my bank!

Etrade will offer you an ATM card and you can withdraw funds from anywhere and Etrade will not charge you. However, the owner/operator of that particular ATM may. You are limited to six withdrawals or transfers per calendar month. You can also deposit to Etrade ATMs.

Now, let’s look at some of the complaints regarding Etrade. Almost all in this case were from people who were trading not saving their money. If any of you read or listen to Dave Ramsey, you know what he would say…”stupid tax”. Too many people are investing without researching. Margin calls, not knowing that trades do not always happen on the day you request them and do take a few days to clear, and just not being aware of what they can and cannot do. This is a topic for a different day.

After reading over everything, looking at their website and online banking demo, their rates, and their business practices, I think this is a fairly good company to use as your bank.