X.com itself was a young startup, untested in the world of finance. It was full of gimmicks, and didn't seem too trustworthy. The X could have been a badge of defiance, or it could have been a moniker for a anonymous, shady character. I believe in the latter.

X.com was founded late last year by a young entrepreneur. It itself is not a bank, but a financial services company outsourcing its products to others. All of its banking services are provided by First Western National Bank, a truely non-internet bank. Its mutual funds are tied into Barclays, and others. The banking services are a convenience and lure for X.com's targeted market, the mutual fund shopper.

X.com had offered four funds through its website. One was a no-fee index fund, called the Premier S&P 500, which has no fees except for extremely low (versus industry average) operating expenses, which itself was waived.
X.com also offerred a bond fund, a money market fund, and an international fund. All of these funds tracked an index, and were passively managed.

As of December 1, 2000, X.com had ceased offering banking and mutual fund services, and was liquidating consumer accounts and mailing back assets. The reason X.com made such a move (announced late October) was that they wanted to focus on a more lucrative aspect of their business, PayPal.

I think the underlying reason that was untold was that PayPal was a big money maker, and X.com felt that providing checking accounts and mutual funds as consumer conveniences was an unnecessary and serious drain on resources, so you might as well get rid of the laggards, and concentrate on the leaders.

PayPal if you don't know, is a service that allows one to electronically send and receive payment. PayPal's growth is spurred on by online auction sites like eBay, as well as other merchant sites accepting PayPal.

Unfortunately, there may be some people not notified of the status of their accounts, and must go and manually close the account themselves. Although X.com claims that it will automatically close accounts, it didn't. I had to personally go in and close my account. Fortunately, I only had a few bucks in there, and sitting in one of their mutual funds, not the checking account, which started penalizing accounts with less than $100 in them.

The way X.com ran its operations, reminds me of another young relatively untested company in the same business as X.com, i.e., E*Trade. E*trade itself had some problems with crediting, and timeliness issues. Even with one mistake, or poor judgement. Noone will trust you, especially if you are dealing in finances. Don't trust X.com


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on a side note...
ING Direct Bank offers 6.5% APY savings accounts and 7.5% CDs, no minimum deposit, this is their regular rate. Plus you get $25.00 for opening an account (no minimum deposit) -- you only get the bonus if you received an email by an ING Direct customer, so email me with name if interested.

ING Direct recently opened a branch in the USA. It had already established itself in France, Spain, Canada, and Australia. The parent financial company has been operating in the USA for the past 100 years. This is NOT a X.com type of gimmick.
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Thanks



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