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Question:


Are there any major benefits in doing business with an online bank? I’m a bit hesitant, although the interest rates are pretty good.
-SLewis05


Answer:


You’re a full-service questioner. You asked a question and then supplied your own answer by alluding to the fact that interest rates tend to be higher at online banks. Fees are also generally lower too. That’s because they, unlike you, do not provide full service. Their range is generally limited to savings and checking accounts and occasionally mortgages, and they often limit the number of transactions that a client can make in a month. Online banks are no less safe than brick-and-mortar institutions, as long as you verify that deposits are federally insured, so that’s not an issue. If you’re looking for a no-frills account that you will not need frequent access to, then an online bank seems like the right place to go. A list of them, the rates they pay and minimum balances are available at Bankrate.com.
-Conrad de Aenlle



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