Hudson City Savings Bank (OTC:HCFB) which serves the Connecticut, New Jersey and New York markets, is now offering some of the best CD rates in America, paying out 2.50% APY on 24-month certificates of deposit and a 3.00% APY on 36-month CDs.

As far as I’ve been able to find, there are no other banks that offer higher CD rates than this, although Flagstar Bank is offering the same interest rates on their 36-month CDs.

Here are the current terms of the CD as of this writing:

• 3.00% APY 3-Year CD ($5,000 minimum balance)
• 2.50% APY 2-Year CD ($5,000 minimum balance) 
• 1.75% APY Internet Money Market Savings ($2,500 minimum balance)

If you want to invest in the 3-Year CD, it’ll cost you $5,000, but if you live in the three states Hudson City Savings Bank serves, you can get in as low as $500. 

There are no other local limitations, and you can apply for the CD at the national level, i.e. it doesn’t matter where you live in the U.S., you can get in on the great interest rates.

Hudson City Savings Bank has been named as “The Most Efficient Bank” more than once, which allows them to offer better rates than the majority of their competitors, as you can see with the CD rates I mentioned here. They have 125 branches in the 3-state area they physically operate in.

CDs acquired from Hudson are insured by the FDIC for up to $250,000 until the end of 2009, where, along with all banking investments, will revert back to the former $100,000 per customer, unless that is changed. For now that is the known circumstances concerning insuring all banking accounts under the FDIC umbrella.

Do go to the bank’s web site to confirm the CD rates, as then can change quickly. But as of October 2, the CD rates stand as I’ve written here.

WTDirect is among the top five percent of U.S. banks for savings rates, and they even give you a chance to test drive the account with no risk to yourself.

At the time of this writing, opening a savings account with WTDirect gives you a return of 1.66 APY for the first two months no matter how much you put in the account to begin with. Once that two-month period is over, you then must maintain a minimum of $10,000 in the account to get the highest savings rate.

That’s a nice feature because a number of banks bring down the interest rate in a savings account as the account gets bigger.

There is also no restrictions on needing have a checking account with the company in order to have a savings account with a higher interest rate. Another nice feature is there is no minimum amount needed to open or maintain an account, and no fees regardless of how much money you have in it.

Also included is the current FDIC guarantee of up to $250,000 for your savings. As with all U.S. FDIC-guaranteed accounts, that will revert back to $100,000 as of January 1, 2014.

What’s nice about this for savers, depending on how you like to do your banking business, is this is one of those built-in savings accounts which can work good for those not concerned over moving their money in and out of an account. For two months you can get a good return with no minimum amount in the account, and no fees.

And if you like your experience, and have $10,000 available, you can always just keep your money in the WTDirect savings account if you choose to in order to get the higher interest rate.

You are also allowed to transfer any of your funds between your WTDirect savings account and other financial institutions you use; something not all banks allow.

After declaring bankruptcy, GMAC has re-branded itself as Ally bank, and in efforts to generate new customers, is offering high yield savings account with a rate of 1.73 percent, and an APY of 1.75 percent, as of this writing.

There are several other features of the High Yield Savings Account at Ally Bank which also make it attractive:

• You can open an account with $0
• There are no minimum balances required
• Interest is compounded daily
• All accounts are insured by the FDIC
• No monthly fees

Do remember that the no monthly fees is based on usual practices. If you exceed 6 withdrawals or transfers within a statement cycle, you would be charged $10, and if a deposit item is returned, there is a $7.50 fee. Don’t be put off by the 6 withdrawal or transfer rule, that’s actually mandated by federal law, and all savings accounts have it.

But as far as minimum balances and normal use of the savings account, there are no hidden fees, which can give you peace of mind in contrast to other banks’ High Yield Savings Accounts which many times penalize if you drop below a required amount.

In contrast to most other large banks, this is a great interest rate and deal, as I couldn’t find a better savings rate for a no-minimum bank in America.

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.

Beverly National Bank Online is the e-banking for Beverly National Bank located out of Beverly, Massachusetts. To say this bank has been around for awhile is an understatement. It first open its brick-and-mortar door in 1802. Beverly National Bank online currently offers 3.10% APY.

This is not a bad yield to get; however, it states point blank that you need $5000 to open an account. Too many people are currently scrapping together to get money together to make the mortgage and groceries so this is a little high for the average joe. It also states that if you let it fall below $5000 anytime during the month, you will get a $15 fee charged. Ouch!

On the plus side, they do use VeriSign to secure the accounts. It also uses Secure Sockets Layer technology (SSL) .

To open an account, they will need your name, address, social security number, date of birth They will also mail statements monthly or you can grab it from your Free Internet Banking production on line twith them.

Like many savings account both on and offline, you are limited to six withdrawals each calednar month thosugh you can make as many deposits as you want. Deposits are pretty simply made by mail or ACH direct deposit. They currently cannot transfer bank to bank as of October 6, 2008. Access is very hard to get as you can only transfer funds between the online account and other accounts at Beverly National Bank.

Deposits are made only by mailing in a check or direct deposits via ACH. Doesn’t help if you need money in a hurry for an emergency, especially one that is so tied down.

After looking this over, the e-Success online account with Beverly National Bank is not the best bank out there for someone who lives outside of the area. Though the money is secure, it is difficult to get the money back out unless you live in the North Boston area and can get to the bank. Given that this review is for the people out there looking to begin savings, $5000 is a hefty amount to put down. In addition to the other limitations, I would suggest going to another online bank.

Providentdirect was created for people who use the internet to do their banking as part of an online division of Provident Bank located in Maryland and Virginia. Currently, what they require to open an online account is that you are eighteen years old, can provide your home address, social security number, driver’s license number with issue date and expiration date. There have been some complaints that customers have a hard time getting their issue date for online. Since the Provident Bank is headquartered in Maryland, this may be something that is on Maryland licenses and not universally used around the states. Call customer service to explain. Lastly you need to either electronically transfer funds from one of your other checking or savings account or send a check. Like many of the banks I review, this one is insured by the FDIC. Your ATM card will arrive within seven to ten business days after opening the account.

Providentdirect takes direct deposits, automated transfers which you will be able to being within a week of your account being open. You can get both paper and online statements (let’s be green here and get the statements online and print them out or better yet, save them to your computer).

Providentdirect does have a maximum initial deposit of $200,000 and the maximum allowed once the account is open is $500,000.

Like similar online savings account, you will need to validate several small deposits in your funding account if you are using automatic transfers.

Providentdirect has a $100 minimum to open for $3.75% on all balances. Please be aware however, like all accounts, the interest does change. They also charge for excess transactions for $5 per excess transaction. You have six months before you can withdraw from this online savings account or you will incur a fee of $25.00.

Overall, Providentdirect offers 3.75% APY (as of August 22, 2008), a minimum of $100 to open, ATM card, comparable fees to other online accounts and allows up to $500,000 in this online savings. However, since FDIC only covers $100,000 per account, your best bet would be to put that money in separate accounts.

I think this is a reasonable account for someone transferring funds around looking for better rates. The minimum being $100 to open may not be feasible for someone starting an account and Providentdirect does not provide for minor or business accounts. Outside of that, it seems to be a decent account to have and they appear to have taken care of many of the website issues that had incurred earlier this year.

ShoreBank Direct is the online banking piece of ShoreBank, a commercial bank formed about thirty-five years ago by four friends. It has over $2.2 billion in assets and is the first environmental bank in the United States. It has a pretty serious mission statement on community development and conservation lending. Conservation loans finance preserving natural resources while their community development loans help in communities that are below the Chicago median levels. They now have two banks held by the ShoreBank Corporation – one which is in the communities of Chicago, Cleveland, and Detroit and the other – ShoreBank Pacific – in the Washington and Oregon areas.

ShoreBank Direct has online access, $1 to open, direct deposit, and 3.5% APY. To open an account with ShoreBank you need to be 18 years or older, have a U.S. bank account, social security number, driver’s license or state ID, and information on loans and other ways to further identify you.

Now, this is only available to individuals so businesses cannot apply. They also list that ShoreBank Direct is able to keep their rates high due to the “online” piece which allows banking to be handled 24/7. Once you are approved, you will get an email telling you about the trial deposits that have been placed in your funding account. You need to check with your funding bank and verify those amounts to ShoreBank Direct online, like with most online banks. Your first transaction needs to be with your U.S chartered bank and the funding transaction could take three to five business days.

Statements on the online account follow the ecological footsteps of its mission statement and are available online and you will receive notice about it via email. You can always ask for a paper copy or just print it from your screen.

Now for some of the stipulations on having a ShoreBank Direct online account and getting good rates. You need to save! Which means more than six transactions a month and you will be charged a fee for each excess transaction. You do this too many times and ShoreBank will close your account. They are serious about this and the charge is hefty – $15 per each excess transaction. Most of you who read my blog know I believe savings accounts are for growing money – especially in a wobbling economy. Save it, don’t raze it! Anyways, this bank will charge you for this. You have been warned.

Another downside to the bank is if you do need to take money out for an emergency, there is no ATM card. You need to transfer from ShoreBank Direct to your funding bank and that could take some time, a few days.

All in all, I like this bank. They are no-nonsense, give you good rates, make it not too easy to blow through your savings, and are very environmentally as well as community oriented. I am all for saving!

FNBO Direct is the online savings piece of the First National Bank of Omaha. FNBO has been around for over 150 years; pretty impressive for a bank. Benefits offered by FNBO Direct are no monthly fees, no minimum balance and you can open your online savings account with $1. Not bad so far. Currently they are offering a 3.50% APY and is accurate up to September 27, 2008. That’s all good, too.

To open an account with FNBO Direct, you need the usual suspects: social security, driver’s license or state id, current bank account, and you need to be at least eighteen. Unusual, however, is that they also want information on any loans or mortgages you have to help them confirm you are who you say you are. When you first begin placing funds into this account, you will be subjected to a two to four day hold while transfers clear.

On the plus side, FNBO Direct does offer you an ATM card so you can get money out of your savings account as needed.

Most people need to remember that a savings account is just that…savings. Many of the complaints that were filed for FNBO Direct were because they could not access more than six transactions a month without a fee. Well, yeah! If you will be using your savings account as a checking account just leave the money in checking. You’ll save on the fees.

The pluses on this account are the facts you only need a dollar to open the account and there is no minimum balance. The current rate of 3.5% is good for all the savings account amounts, not just for accounts over a certain amount. Also, you will have access via an ATM card so you have access to your account anytime. You can apply for both an individual account as well as a joint account and bill pay.

Minuses are the fees on the ATM if the ATM is not attached to a FNBO bank. It is currently $2.50. There is no overdraft protection on BillPay. You may need additional proof of identity when you open an account. This is due diligence on account of the bank and are protecting you as well as themselves in case of fraud but it can be a pain.

All in all it is a good little bank and has been around for a long time. They are branching out into other areas such as online banking. However, due to the need for additional identification, you may want to look at others. It is a good deal but I believe there are better.

VirtualBank is a totally online banking account which handles mortgages, CD’s, Money Market, and of course, online savings. They no longer offer online checking. Unfortunately, there really is not too much to recommend when it comes to online savings with this bank at this time.

To apply, you will need to do the normal when it comes to opening an online account, need driver’s license, social, date of birth, but they also ask for employer and employer address. They also do not allow cell phones as their phone numbers. Hmmmm, wonder what that means as many consumers no longer have home phones having opted for cell phone use only.

They do offer you an ATM card. They also have your own personal banker when you call. Initial deposits can be mailed or transferred from your linked funding bank. You can directly deposit to your savings account regularly via your linked bank or by direct deposit from payroll or pension or by check.

To retrieve your money out of the account, you can withdraw from any ATM – with a VirtualBank ATM card – or request cash back from a POS sale. It is FDIC secured for individual. VirtualBank does not offer business accounts at this time and you need to be a U.S. citizen or resident alien with a valid social security card to open an account.

They market their savings account as a good starter account for children, not great, just good. Their website also goes on to tell you that there is no minimum balance or monthly service charge for children.

Well, I’m an adult and as of September 2008, 1.34% is not enough to get me to move my children’s account here. Also, not too pleased with the $1000 minimum balance I would need to begin the account. As you read the disclosures, there are some other issues. You can only make six transfers from your account each four week period, either by automatic withdrawal back to your funding checking account, telephone agreement, order, or instruction. However, only three per month can be made by check, draft, debit card, or similar (like POS transactions). If you do not keep $1000 in your account you will be charged a fee of $10 a month. If you close out within the first ninety (90) days you will be charged $50.

If you want the 3% rate with VirtualBank, you will need to get a Premium Money Market account with a minimum deposit of $5,000 and have a balance of $95,000. That’s a bit steep for me.

However, playing the devil’s advocate here, VirtualBank did have a good service and rate record up to 2007. Their customer service was unsurpassed at that time. It appears they invested too much into their mortgages, had some ARM problems, and because of that they seemed to have lost customers and have had a suit against them in California regarding not disclosing terms when it comes to ARM loans.

All in all, currently I would stay away from VirtualBank until they straighten out their issues and get their online savings account on track with some of the other online banks out there.