Since today is Valentine’s Day, it’s appropriate that I am making a big relationship change – I’m dumping my old bank and opening an account with Ally.

Ally has been chasing me for years now.  I’m a huge NPR podcast listener, and Ally sponsors many of my favorite shows, including Planet Money.  I must have heard the words “This podcast is sponsored by Ally Bank” a couple of thousand times now.  Their daily plugs kept them in the front of my mind, and I saw favorable reviews of Ally in various news sites.

Ally is an full-service online bank.  There are no physical branches or ATMs, so you just use whatever ATM you want – they automatically reimburse the fees the other banks charge.  You get real checks and online bill payments, and you can deposit checks electronically.  You never need to go to a branch or find your bank’s ATM.  Best of all, no fees.

Before now, I’ve never felt the need to switch, because this is exactly what my current bank provides.  For the last six years, I have been using E-Trade Bank, which is also virtual.  When I switched to them six years ago, I was attracted for all of their online features, but they were also offering some of the best interest rates available (this was pre-Great Recession, of course).  They were sending a strong message of “we are a virtual bank, and we want your business by offering you the best rates and the best services”.

For many years I was happy with E-Trade bank, but as the Great Recession took hold, I saw that great interest rate start to fall… and fall… and fall… I did notice that Ally Bank kept showing up in various news articles as having high customer satisfaction and offering one of the best interest rates available, and ever time I would hear them on NPR, I would think to myself, “gee, they seem to be offering good interest rates.  What is going on at E-Trade?”  Still, I wasn’t ready to abandon my E-Trade relationship.  I knew the financial markets were tough, and switching banks is a royal pain.  I remained committed to my bank.

Until a month or two ago, when E-Trade basically spit in my face.

While balancing my checkbook, I noticed that my savings account paid less interest that month than my checking account did, even though it had a higher balance.  What?  As I looked closer, while the checking account interest rate had fallen to tiny amount  (0.05%), the savings account interest rate was actually even lower at 0.01%.  In other words, it was zero.

I was convinced this had to be a mistake.  I understood times were tough, but there is no way that a checking account could have a higher interest rate than a savings account.  I sent some emails and later had a phone conversation with an E-Trade representative, and they confirmed that there was no mistake.  The rates for savings really had dropped below checking.

I’m not sure what kind of business E-Trade is running, but this is just insulting.  They suggested that I explore some other account types that may have higher returns, but the damage is already done.  Checking and Savings accounts should be the bread and butter of banking.  If the savings account is actually a worse place to store money than the checking account, something is seriously wrong.

I looked at the current interest rates at Ally, and they are paying 0.9%.  In other words, they are paying 90x the interest on a savings account that E-Trade is.

That’s it, I’m done.  Switching bank accounts is a pain in the ass, but Ally clearly wants my business.  It’s time for a new banking relationship.  Thanks for sponsoring my podcasts, all these years – it finally paid off.