Opening my first online bank account
I remember about 8 years ago when I opened my first online bank at Netbank. The thing that stood out to me the most was how much better the interest rates were than at the brick-and-mortar bank I was working in at the time. I remember thinking how Netbank was on the cutting edge and I wanted to buy stock in their company. Turns out it was a good thing I didn’t because if they haven’t gone out of business, they surely aren’t much of a competitor in the online banking arena.
Looking back, I think Netbank was trying to be a fully-evolved online bank, but they just weren’t there yet. The difficulty of withdrawing, depositing, and transferring money makes it clear as to why they fell out of favor and why ING Direct and others now shine.
Do you really need an online bank?
The primary reason that Linda and I bank online is to use ING Direct as a budgeting tool. We have a system in place that works very well for budgeting, so we are still sticking with it. The high interest rates that are normally a big selling feature for online banks have dissipated due to our current economic crisis.
I think some situations will always be more convenient to be in an “offline” bank, but until they catch up with features to their online peers, there will still be advantages to opening an online bank account.
Where should you open an online bank acount?
I have been with ING Direct for years and have loved them (apparently many CPF readers use ING as their online bank too).They are extremely feature rich and have good customer service as well. Also a study was done that indicated that ING was the safest bank. The downside with ING is that they don’t have the highest interest rates in town. Sure, they beat the pants off all the brick-and-mortar banks, but there are quite a few online banks that have slightly better interest rates. For me, I am okay with that, but I know some people just won’t stop until they find the highest bank rates.
I have also had a Virtual Bank account for a while as well. They are a very secure bank, but with not as many features as ING Direct. But they were named Money Magazine’s “Best Online Bank” – for what it’s worth.
Do you use an Online bank?