Credit card companies jump into the online savings industry

In a world where people are writing increasingly fewer paper checks and paying more bills online through direct transfers, many may find their salvation from fees in the same place they find dates: The Internet.

In a funny turn of the tables, banks commonly associated with charging high interest rates for credit cards and nailing customers with fees are now paying high interest and charging no fees to consumers who open online savings accounts with them.

Banks like American Express, Discover, and Capital One have jumped into personal banking with fee-free high-interest savings accounts to head off the world's biggest consumer banks have ramped up fees and dropped interest earnings.

Some of the world's largest consumer banks, such as Wells Fargo, TCF Financial, and Bank of America, have already eliminated free checking, something consumers have banked on as a given for more than a decade. Other major consumer banks, such as HSBC, have started charging for debit cards and added fees for accounts that fall below newly imposed balance minimums.

While banks are required to inform consumers about the new fees, they are able to make announcements in their regular correspondence: the extra sheets of fine print that typically accompany monthly statements and end up in the trash can. As a result, consumers may not realize they face new fees at their old banks until they see the nickels and dimes deducted from their balances.

Consumers being dinged at the teller counter may find salvation in the most unlikely of places - with the banks that usually send bills instead of earning statements. Online banks like ING Direct have long offered high-interest online savings accounts. But the founders of the industry have new competition from banks traditionally associated with credit cards.

American Express, Discover, and Capital One are now luring customers to their online savings accounts with extra high-interest earnings potential. The credit card companies now offer 1.3 to 1.35 percent interest on online savings accounts, more than ING's 1.1 percent.

They also promise no fees and no balance minimums. Discover Bank, which entered the personal banking realm with its online savings account two years ago, bought all of E.Trade's online accounts last year and continues to offer 1.35 percent interest with no fees, no balance minimums, and fee-free online transfers up to $50,000 a month.

-Amanda H. Miller