How to Choose an Online Bank

Online banks are a great alternative to brick-and-mortar banks. They're open when you have time to bank, and they offer higher interest rates than traditional banks. Ready to make the switch? Read on to learn how to go about choosing the right online bank for you.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Internet access

How to Choose an Online Bank

1. Research the various online banks, and compare their interest rates to see who comes out on top. You can use a comparison site like bankrate.com to make this step easy.
2. Then, visit several of the banks' websites to compare account requirements. Look at the amount needed to open an account, minimum balance requirements, monthly fees, ATM fees and any other fees or requirements that may apply.
3. Now compare account features. Check to see if each bank offers ATM privileges, a check card and direct deposit. Also, check to see if they'll allow you to link your online account to a brick-and-mortar account--this makes transfers much easier.
4. Once you've narrowed your list down to a single bank, spend some time surfing around the bank's website to ensure that the interface is user-friendly.
5. Read through the bank's terms of service, and inquire about any details that aren't clear to you.
6. Verify that the bank is FDIC insured. There should be an FDIC logo on the website, but it's also a good idea to verify insurance by visiting fdic.gov.
7. Satisfied with all of your findings? Then, open and fund your first online account.

Tips & Warnings

• Many online banks offer a cash incentive for opening a new account. Do a web search for promotional offers before opening your account.