Internet Banks

Are internet banks any good?

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If, after looking into your bank’s fees, you have decided that it is time for you to switch banks, this article will help you find an ideal bank. While switching banks can be an unpleasant process, especially if you have been parking your money in the same bank account for many years, it is well worth the investment of your time.

We believe that brick and mortar banks are a thing of the past. Unless large banks adapt to their customers’ needs and start treating them more fairly, they will lose a large number of customers over the coming years. Due to lower operating expenses, internet banks can afford to pay interest on your money, as well as not to charge ridiculous fees for things like overdraft protection. In addition, many internet banks are FDIC insured, so they offer you the same protection as a traditional bank. Always make sure that all of your bank accounts are FDIC insured and never keep more than the insured amount (which is currently $250,000 per depositor, per insured bank, for each account ownership category).

We recommend you spend some time on sites such as bankrate.com and nerdwallet.com to find the ideal bank for your needs. No matter which bank you select, make sure that they have no maintenance fees, no minimum balances, no minimum number of transactions, no overdraft fees, no bank-to-bank transfer fees, and the bank needs to be FDIC insured.

As of this writing, the two banks that we recommend are Ally Bank and Capital One 360. Ally Bank currently pays 0.10% on checking accounts, which isn’t great, but they pay 0.85% on Money Market Savings accounts. In addition, if your checking account ever drops below zero dollars, they will simply transfer money from one of your money market accounts (if you have one) to your checking account for free. You can open an account at www.ally.com*.

As for Capital 360, they’ll pay you 0.75% on savings accounts and between 0.20% and 0.80% on checking accounts, depending on your balance. Should your account balance ever drop below zero, they do not charge you an overdraft fee. Instead, you pay interest on any money that they loan you until more money is transferred into your account. In most cases, the interest comes out to only a few pennies. In addition, they help you save for different goals (such as a down payment for a car) by opening a separate Money Market Savings account for each goal. The process of opening an additional account (or closing it once you’ve reached your goal) is very simple and only takes a few minutes. Find out more about Capital One 360 at www.capitalone360.com*.

Enjoy the savings!

*The author of this article is not affiliated with either bank and does not benefit in any way from you opening an account with them.

 

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