In order to choose the right Internet bank, you must first determine what it is you are looking for in a bank. An Internet bank is one that is only accessible online so for most choosing an Internet bank, they are looking for the highest interest rate possible. There are several websites that compare different Internet banks, but the one of the best ones by far is Bankrate.com. Feel free to cruise the website as you determine the top 5 things to consider when choosing an Internet bank:
1. Banking Services Needed
Most use Internet banks for banking and loans since it is easy to compare between banks. Perhaps you need an Internet bank that offers loans and banking or perhaps you just need one or the other. Or perhaps you’re just looking for investment options in your Internet bank. It’s imperative you determine first exactly what kind of account(s) you are looking for. For this article, I’m going to focus primarily on general banking services since that is what most people use Internet banks fro.
2. Interest Rates
The general rule of banking is you want to receive the highest interest rates on savings and the lowest interest rates on loans. However, don’t just pick the bank with the highest/lowest interest rate. Doing so could mean paying unnecessary fees or being locked in an account you cannot get out of for some time (e.g. certificate of deposit).
3. Minimum Balance Requirements
Another important thing to consider is minimum balance requirements. These actually come in two forms: initial deposit requirements and minimum balances necessary to avoid fees. Both are important to consider and both depend highly on how much funds you have available to deposit in the account. If you have no problem meeting the requirements (usually $1,000 to $10,000) then consider the account; if that poses a problem, ignore it.
4. Accessibility and Options
The next thing you want to consider is the accessibility of your account and what options the Internet bank gives you. First you need to know exactly how you are going to use the account: are you simply going to use it to hold funds or are you going to need access fairly regularly like you would a checking account? Are you looking to pay bills with the account? Did you want the ability to transfer funds automatically from another bank account on a weekly, bi-weekly or monthly basis?
Some Internet banks give you a checkbook or ATM/Debit card to give you access to the account. On the other hand, some are very limited and only allow you to make electronic deposits/withdrawals from another bank, which usually means you have to wait 3 to 5 business days for a withdrawal to be accessible in your personal bank account. Accessibility is key to ensure you pick the right bank account for your needs.
5. Reviews
After you have reviewed the available banks and found the one that has the best rate, best minimum requirements and best accessibility, the final thing you will want to do is a review of the bank itself. Depending on the Internet bank you have found, there may be reviews online for it or there may not be. If there are, then definitely take the reviews into consideration when deciding whether to choose this bank or go on to the next one on the list.
If there aren’t any ratings, keep in mind that there are risks (and no guarantees) when sending your money to an Internet bank. Use common sense (and the “too good to be true” adage) when determining if you want to do business with any bank and check out their website thoroughly before making a decision. If you do decide to use a bank that has everything you’re looking for but can’t find reviews for it, start the account with a small amount of money and slowly increase your deposits as you determine their trustworthiness.