It’s really ironic that a purely online account takes a lot longer to transfer money in and out of than an account based at a physical bank. Most of it has to do with security, and checking that the money really exists before it gets withdrawn or deposited anywhere. Fraud is not a large problem for online banks but they say that’s because they’re so careful and because they take longer to move money around.
If you are needing your money from an online bank in a hurry, here are a few tips that might help speed up your transactions:

• Plan ahead with your transactions as far as possible; or when you realize you need to make a transfer then do it online as early in the working day as possible and it will be more likely that your transaction happens a little faster.
• It might be possible to open a (small) checking account at the physical bank connected to your online bank. If you transfer money within the same bank (from your online account to a physical checking account) it will usually be available the same day.
• Complain to your bank if transactions are particularly slow, because there are rules about how quickly funds should be credited.

Apparently the European system already works a lot faster than that in the United States, so online bank customers can hope that things will improve in the next few years.

In these unstable times, plenty of people are worried about their savings in various bank accounts and insurance policies, so it’s worth getting some expert tips about what’s safe where.

Savings you have in a bank: The key thing here is the rules of what is covered by FDIC deposit insurance. The minimum that is covered in a savings account, per person, is $100,000. If you have a joint account with your spouse, that means $200,000. And that’s per bank. Additionally, if you have a “proper” retirement savings account (that is, an IRA or SEP, for example) then it is covered up to $250,000 per person.

Mutual funds or other investments that you buy through a bank get a bit more complicated. If your bank goes under, what you get for your mutual funds would be connected to their underlying value rather than any specific limit. But a money-market account investment through a bank is covered again by the FDIC deposit insurance rules.

Your finances and insurance companies: If an insurance company goes bankrupt, there are state guaranty associations which provide the financial back-up, rather than a federal arrangement as with banks. When the assets of the insurance company aren’t enough to pay out all the policies, then the state guaranty associations step in and pay up to certain limits, which vary between states.

photo credit: TheTruthAboutMortgage.com

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