When we are looking for a local bank and want to compare services, it is pretty easy to know where to start. You know the name of the banks you want to compare and all you need to do is get some brochures that tell you about their services. But where do you start when you are looking for an online bank?
One of the most important things is to make sure that your online bank is FDIC insured. Beyond that, it's mostly just a matter of preference. The FDIC Insurance website has a page where you can check to see if your online bank is covered. Most banks will display a logo prominently on their website showing that they are insured, but if you're not sure, go to the FDIC website.
Once you know your money is covered under FDIC insurance, think carefully about how you use banking services. Are you someone who stops at the ATM several times a week? You'll want to check out the availability of ATM's and the related fees. Do you pay everything by check or are you comfortable using a bill pay service? Some banks charge transaction fees if you have more than a certain number of transactions each month. Sometimes a paper check will be considered a transaction, but an online bill pay will not. You'll want to check carefully.
Be aware that banks often offer teaser rates. That great interest rate offered for the deposit or loan may only be good for a limited time. Be sure you have checked thoroughly and know what you are getting. Also, some banks may charge for paper statements or if you call a live representative instead of using an automated system.
Many banks may offer special interest rates or unlimited transaction rates if you have a direct deposit set up. Others will offer incentives if you choose to use their online bill paying service. If you need these services or are willing to use these services, check for a bank that offers specials and take advantage of them.
Be aware that if you need to deposit checks or money regularly, that it will take longer if you have to mail in the deposit. You may be able to find an online version of a local bank that work together. Then, if you have a deposit that you need to make, you can take it to the local branch. Don't forget to see if there would be any fees for using the local branch though. It might be worth the wait of mailing in the deposit rather than pay the fee.
One of the frustrating things about using an online bank is if the bank website is down or extraordinarily slow just when you need to use it. Gomez regularly measures banking websites to see how reliable their systems are. It might be a good place to check before making a final decision.
Consumer Search is one of many websites that has a ranking of various online banks. It certainly doesn't hurt to check several comparisons prior to making your final decision.