Segment: Special Reports
Publication date: Friday, February 08, 2008
# Pages: (83 pages)Abstract | Table of Contents
There are relatively few ingredients for a successful direct savings account (DSA) – an attractive account (with a high interest rate), an easy application, and a private site that allows customers to find information and make transactions with ease. In looking at 11 of the leading DSA firms, however, we found few that were able to meet each of these objectives.
The significant majority of accounts in this report offered the same basic features – high interest rates, no monthly fees and a low ($1) initial deposit. There was a wide spread among firms’ interest rates – the most eye-catching aspect of any DSA. The highest and lowest interest rates in this report were separated by a full percentage point. Two firms charged a monthly fee and three firms required higher minimum initial deposits ($25 or $50).
We noted the most variety and the most room for improvement in firms’ online application processes. Simply, many applications were too long and prevented users from setting up key account features such as online access. The best applications we tested were short, but did not skimp on features. One firm’s application (which was also one of the shortest we tested) allowed users to set up recurring transfers – an excellent feature. Seven firms allowed applicants to set up online access during the application process, and four allowed users to submit electronic signature cards – both are time-saving features that allow new customers to quickly begin using their accounts.
Because DSAs are online-only accounts, it is important that firms provide adequate account information directly on the private site. Firms, however, generally struggled to excel in all areas of account information. One firm provides account activity and online statement archives for the life of the account – an ideal offering. This firm, however, does not offer many activity search functions, making it difficult to sort data. Other banks simply did not provide enough data – five firms in this report offered transaction archives of four months or less.
Transfer centers are essential to DSAs – they allow users to move money into and out of their accounts. Most firms in this report offered at least adequate transfer centers. Seven firms offered unified transfer interfaces – the ideal layout for transfer functions. Six firms also automatically stored funding information from the online application so users could immediately begin making transfers. One firm, however, did not offer a bank-to-bank transfer service – a severe liability in the DSA space.
Subjects
Website Reviews/Company Reviews
