New Dominion Direct Savings Accounts

Among the many personal bank accounts offered by NewDominion Bank is the traditional savings account. NewDominion Bank offers one of the best rates on a savings account in the industry (currently 0.7% APY). In fact, their current rate beats out nearly all other banks reviewed on this site.

Online Savings Accounts

Savings accounts are one of the staples of any bank, savings and loans institution, or credit union. They have been around since the first banks opened, and along with checking accounts are the most common accounts opened.  A savings account is essentially a reverse loan. In other words, a savings account is when a bank pays you to borrow your money. The bank, in turn, loans that money to others in the form or mortgages, home equity loans, credit cards, car loans, and small business loans. The bank makes its money by chargings a higher interest rate on loans than it pays out through its savings accounts. Since savings accounts are such a vital part of the success of any banking institution, it comes as no great surprise that even though online banking is still in its infancy, nearly every online bank offers a savings account.

Many of these online savings accounts offer higher interest rates than traditional savings accounts. This is in part because the overhead is much lower for an online bank than it would be for a traditional brick-and-mortar bank. Many banks have a very low required balance on savings accounts (compared to money market and CD accounts). We have a review of New Dominion Direct Money Market accounts for those who want the flexibility of a checking account with the interest of a savings account. If you are looking for the best rates, then check out our review of New Dominion Direct’s CD.

New Dominion Direct Savings Specifics

As we stated earlier, NewDominion Direct offers one of the highest interest rates on a savings account anywhere in the country (currently at 0.7%). On the other hand, they require one of the highest balances in the industry. In order to open a savings account through NewDominion, you must fill out an online application found on their website at www.newdominiondirect.com. You must also have an initial deposit of $1,500. You must then maintain at least $1,000 in the account in order to avoid a $10/month maintenance fee. This is extremely high considering many other banks only require $1.00 to open and have no minimum balance on their savings accounts. The high minimum balance is just the price that must be paid for one of the highest interest rates in the industry. NewDominion Direct also limits withdrawals to three per month before they begin to charge $5/withdrawal. There are several other features of NewDominion Direct’s online savings account:

• Interest is compounded daily and paid monthly.
• ATM card is free.
• Online banking is free.
• Electronic quarterly statements are available.
• Direct deposit is available.
• Accounts are FDIC insured (as are all accounts reviewed on this website).

Summary of New Dominion Direct Savings Accounts

With one of the best interest rates in the industry (0.7%), NewDominion Direct is an excellent option for an online savings account. However, with their relatively high required balance ($1,000) they are not for everyone. They are for the serious saver who wants a little more liquidity with their funds than is offered with a certificate of deposit but who is able to maintain a $1,000 balance for the period of time that they keep the account.