Online Banks

In this modern age of the the World Wide Web, the banking industry has kept up. In addition to banks offering on-line access to accounts, internet bill paying, and other modern conveniences, there has sprung up a large number of "internet only" banks.

These banks generally have no "brick and mortar" locations (traditional banking branches), and their services are totally linked to the Internet. while there is some trepidation in trusting you money to a "virtual" bank (they are not totally virtual, as they have "brick and mortar" headquarters and offices), they can offer great benefits.

Most of these banks offer the same conveniences as traditional banking institutions. They have on-line bill paying (which is such a convenience especially for regular and reoccurring bills). They offer checking accounts, with check services and ATM/Debit cards.

Most also offer credit cards (if you need another one) and other loan services. Some, such as ING Direct, also offer mortgage services.

They also offer savings accounts, which are perhaps the greatest benefit to this incarnation of the banking world. Where as most traditional "brick and mortar" banks are offering something in the range of 0.5-o.75% interest (my traditional bank is offering around 0.75% interest), these online banks are offering much higher rates. ING Direct (my choice for on-line banks), is currently offering 4.1% interest on their savings accounts. This means that your money is working harder for you.

While you will probably need to use a combo of both a traditional bank and an "Internet" bank, you can make great use of these services. My family and I keep our "working" money (the money we use for daily expenses such as groceries, gas, etc) in a traditional bank, to ensure easy access, we have chosen to put our long term savings in an Interent bank (after a lot of research and discusssion, we were a little uneasy at first about Internet banks, we chose ING Direct). This way, the money we don't need to get at fast is making us a ton.

ING Direct also allows you to link your traditional banking accounts to your ING account, so that you can easily transfer money between them.

At least ING Direct (and hopefully some of the other options), also offers incentives for signing up. They give you a certain dollar amount as a "gift" for signing up. You can also make more money by referring friends and family. ING offers a way for you to invite your friends (by sending them an e-mail), and if you friend signs up for an ING account using this invitation, they receive about $25 dollars in their account, and you will receive a $10 deposit in yours.

While these Internet banks can offer great benefits, make sure that you do research your options and understand the risks and requirements of doing your banking this way. I would recommend starting out with a small sum and seeing how your experience goes. I have also found it best to make sure that you have either made arrangements to get easy access to your funds, or only place money you don't need right away in this type of institution.

Here are the site links for two of the most popular Internet Banks. Ask friends and family for any recommendations they may have, since if you know someone who has had a personal experience with the bank, it might be easier to make a choice.

ING Direct

HSBC


Happy Savings!