Online Banking

Online banking is the more than the wave of the future – it’s here today.  Online banking offers greater convenience, lower fees, and better rates on savings accounts.  It’s also easier to keep track of your money and to switch it to where it can do the greatest good. 

All major national banks have online banking options, and some of them are quite good.  Also, many other players have jumped into online banking, sometimes even without having any traditional bricks-and-mortar bank sites.  Selecting one of these upstarts can bring even better returns, if you make the right choice.

Here’s a rundown of some of the best online banking options today.  (These are listed in alphabetical order, not in rank order.)

Ally Bank.  One of the largest internet-only operations.  Ally offers very competitive rates on all accounts, and it has generous policies about certificates of deposit (good rates and short terms).  Also, users rank its online customer service as excellent.

Bank of America.  Very convenient for people who use this immense national banking system. Bank of America doesn’t get the highest ratings from consumers for service, and it’s rates on savings accounts aren’t the best, but it offers free online bill-paying.

CitiBank.  Not a bad choice if you have a Citibank credit card.  The interest rates are on below the average for other online banks, but if you are already using the Citi credit card, then you can easily do your online payments and not worry about overdrafts and other mistakes.  And it’s totally safe and credible.

Discover Bank.  Tied to the well-known Discover credit card, this bank consistently offers interest rates for checking and savings accounts at the high end of the range. The only challenge can be withdrawing money from ATMs, where the Discover network is smaller than some others, and thus a user might incur a fee.

HSBC Direct.  Maybe the best option of the bunch.  HSBC Direct is affiliated with HSBC Bank, a huge, multinational institution. So you can do all of your banking and finance with this company – from checking/savings accounts to mortgages to financial planning.  The benefit of HSBC Direct is that you can shift your money between your regular accounts and the Direct account, thus gaining the high interest rates that the bank offers on savings accounts and certificates of deposit.

ING Direct. Probably the best-known online bank.  ING’s strength is offering great rates on savings accounts. Also, it does not have a minimum balance requirement, whereas many competitors require $1,000 in savings before any interest can accrue. The downside is that ING is purely a savings account; there’s no checking option.

More choices are emerging all the time, and rates change almost daily. It’s best to make a selection from a reliable source and stay with it, rather than to shift from one bank to another to get an extra 0.1% of interest.