by Matthew Perry
(last updated February 21, 2009)
If you're looking to get into the online banking scene, you have a large pool of banks and credit unions to choose from. Of course, you'll want higher interest on savings and checking accounts, low fees, and flexibility, but you want all of that when you use a physical branch as well. The issues for online banking are a little bit different.
You want a bank with a user-friendly interface. You should be able to tell with just a little experimentation whether a certain setup will work for you. Large, clear labeling and stand-out menus helpful when you're just getting acquainted with a site, but they'll also make navigation easier later on if you decide to give that bank your business. Some banks even make it hard to get where you want to go by cluttering their pages with lots of offers that (let's face it) you're probably not interested in.
Even if the homepage works well for you, bank policies may send you looking in a different place. ATM fees, while technically a hanger-on concern from in-person banking, have a new aspect in online banking because if you work through a wholly online bank, you will always have to use another bank's ATMs, and the fees add up quickly. Check your wannabe banks for ATM reimbursement programs and rebates; some will compensate for a certain number of withdrawals or up to a certain dollar amount, but some won't compensate at all.
And finally, know how to make deposits. Some banks allow you to scan checks from home, but others require you to mail deposit slips to them. If you have to mail in deposits, know how long it will take them to reach your account so you can avoid bounced checks—those usually carry a nasty fee with them, and one or two slip-ups can wipe out all the money you save through lower rates and by not driving to the bank. The convenience of online banking may seem less worthwhile when you have to pay extra for it, so choose your bank well. A little looking will show small differences, and small differences add up, big time.
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