Online banks can offer some of the best deals on savings, checking, fees and convenience.
Online banks typically have few or no branch locations and can offer better rates than the traditional brick-and-mortar banks.
Because online banks don’t have the overhead costs of big banks with multiple locations, they can pass along their savings to you, offering rates above the national average-and low fees or no fees for many services.
Standard deposit account types (CDs, Money Market Accounts and other savings accounts) can be found through online banks. Consumers are attracted by the security, high yields and FDIC insurance protection offered by online bank deposit accounts.
Online banks offer high-tech services.
Online-only banking has become popular with consumers who want convenient banking, a safe place to put their money, and competitive interest rates.
With online banking you can make electronic deposits and withdrawals, pay bills, check account balances, move money between accounts-virtually everything you’d have to stand in line to do at a traditional bank, you can do effortlessly with online banking. Many online banks are now offering these services through their mobile banking platforms for customers who have smart phones.
Online banks can provide greater convenience and control:
- 24/7 account access to your account activity and funds transfer requests
- Real-time, customizable account alerts-including alerts when a transaction has been made or you have a low balance
- The ability to make online bill payments
- Online calculators to help you develop and monitor your savings goals
- A downloadable archive of past transactions which you can sort by date, payee or other categories
Online bank savings accounts offer high yield and low risk.
If you’re interested in competitive interest rates plus FDIC security, consider interest-bearing online bank deposit accounts such as savings, CDs and Money Market Accounts. Some of the best interest rates are often found through online bank sites, rather than through traditional banks.
It’s important to note that the FDIC’s expanded insurance for deposits is currently $250,000 per depositor per deposit category. On January 1, 2014, without certain retirement accounts, the standard insurance amount will return to $100,000 per depositor, according to the FDIC.gov Web site.
Online banks offer high-tech security.
One of the biggest concerns for first-time online customers is safety. The safest online banks have sophisticated Web sites with multiple safeguards and firewalls, intrusion-detection monitoring and fraud alerts.
Web browsers use Secure Socket Layer (SSL) protocol for secure transmissions. SSL encryption uses different encryption and decryption keys—the more number of bits in the key the stronger the encryption. The highest Internet standard uses 128-bit encryption of your personal information and online transactions.
Online financial transactions can actually be safer than paper because information is encrypted, according to research by Javelin Strategy & Research. Thieves more commonly obtain personal data through low-tech methods like “dumpster diving” and stolen physical property.
Compare online banking ratings, services and fees.
Many online sites, such as RateNerd, FiLife, MyBankTracker and the Gomez Internet Banker Scorecard let you compare a bank’s online performance, fees, functionality, ease of use, services and resources, and security. You can also click on the Bank Find feature at the FDIC.gov Web site to find out specific information about a bank.
When comparing online banks, find out what charges there may be for check writing, customer service calls, a low balance penalty, bill pay fees, overdrafts, ATM surcharges, transfers to outside banks and monthly maintenance fee
Some other factors to consider when searching for an online bank:
When you’re checking out top online banks, there are a few more things to consider, beyond finding the best annual percentage yield (APY) and low fee or no fee services:
- The best online experience, user-friendly functionality and ability to link accounts
- The full range of products offered (checking, savings, CDs, Money Market Accounts, IRAs, loans, etc.)
- Terms, conditions and minimum balances are for each type of account
- Easy access to your money (debit card, ACH transfer, check writing, number of ATM locations)
- Customer service support
Online Banks Featured on RateNerd.com
Over the years, RateNerd has reviewed products and services from online banks both large and small. Banks we have reviewed in the past include Discover Bank, TD Bank, banks offering free iTunes rewards, banks good for checking account deals, and relatively unknown banks like Bank of the Sierra. Other banks such as ING, HSBC, Ally and others will be reviewed in the future.
Subscribe via Email
Subscribe via 
Subscribe via 
Subscribe via RSS
Follow us on Twitter
Free Credit Score Estimator - No Credit Card Required!
Find Credit Repair Companies Near You
Free Credit Guide "Your Credit Sucks". Download Now
{ 5 comments… read them below or add one }
I received a lot of good feedbacks about online banking from my friends and at first I wasn’t really convinced. But after I read your take on this I am now ready to jump ship and go for bigger savings! Thank you!
Hi Rate Nerd,
Do you have any specific online bank to suggest? Quite frankly I am skeptikal with most of the ones I have seem so far. Thank you.
True, online banking’s biggest selling factor is the convenience that most people wants. But the biggest thing to consider is how to choose the right online bank. Good thing that there are lots of great resources like Ratenerd to help us choose the best one so thanks!
Another great post ratenerd! I can attest to the major benefits I reap with my online account with TDBank. It was your review on TD Bank that convinced me to open an account with them so thank u!
Please be aware of TD bank’s policy regarding ACH fraud. Our business account with TD Bank became a victim of Online ACH fraud (7/13/10) and $48,500 was taken away. Basically TD Bank is taking a position of not responsible. This was our start-up business money and now we have lost our dream. We have filed police reports with City of Alexandria and Fairdax County Police Departments.
{ 2 trackbacks }