8 Questions to Ask Before Opening an Online Bank Account

8 Questions to Ask Before Opening an Online Bank Account

Are you frustrated with the low yields that your local bank is giving you on your account balances? Many Americans are. They are tired of earning 0.1 percent interest rates and constantly dealing with new fees that banks seem to invent overnight. That is causing many to turn to online banks who offer higher yields and lower fees.

If you are one of the many people considering opening an online savings or checking account here are 8 questions you should ask first.

Is it FDIC insured?
Regardless of how attractive the interest rates may be, if the "bank" is not FDIC insured you should run not walk away. FDIC insurance covers you (up to $250,000) in the event that your bank defaults or goes out of business. All legitimate online banks will display "FDIC insured" very prominently on their website.

Are there any fees?
One of the advantages of online banks is that they typically have a very low fee structure. However, you shouldn't just assume that is the case. Check out fee's for ATM withdrawals, minimum balances, transfers, number of transactions, etc.

How safe is the bank?
Most online banks are actually affiliated with huge multi-national banks. Sometimes this is very obvious by the name, but not in all cases. For example, Ally Bank is part of GMAC Financial. Some online banks try to come up with names that sound like they are part of a much bigger bank, but check them out to make sure they are not just projecting themselves to be bigger than they really are.

How easy is it to deposit money?
Setting up direct deposits are usually pretty painless, but what about other situations? How easy is it to deposit a check into your online checking account? Are there time delays or fees involved? And if you want to deposit a wad of $100 bills, you are probably out of luck.

How easy is it to withdraw money?
Most banks make it as easy as possible to put money into them, but what you are really interested in is how easy is it to withdraw that money? How many ATM's do they have? Are there fees for withdrawing money? Are there limits on how many withdrawals you make each month?

What level of personal service will you receive?
One of the frustrations that people have with online businesses is that they can never get in touch with a live person. Certainly with an online bank you will not have the option to interact face-to face with a bank manager, personal banker or even a teller. The best online banks will have a customer service phone number displayed prominently on their website.

Is the higher interest rate worth it?
In most cases, online banks will be able to offer significantly higher interest rates. Not having the expense of a brick-and-mortar operation enables them to offer more competitive rates than your local bank. However, there are trade-offs that you will need to be prepared to deal with.

Does it meet your needs?
Really it all comes down to whether an online bank will meet your needs. For many people it will be a great move. They will earn higher interest rates and typically have fewer fees to deal with. However, others need the reassurance of a local bank that they can visit each week.

Originally found here

Picture originally found here

Related Articles

More From Gelt

Oh No! It's Not Taxes Again!

Well, tax time is here again and it strikes fear in the hearts of many Americans.
Oh No! It's Not Taxes Again!
The Tomorrow Trap

The Tomorrow Trap

Are you a procrastinator? You are not alone. In one study, 90 percent of individuals…
The Tomorrow Trap

Slash Your Grocery Bill

If you are like the majority of shoppers, you are feeling the shock of higher grocery prices.…
Slash Your Grocery Bill

Emotion Based Debt

We need to understand our relationship with money and buying habits to discover any hidden…
Emotion Based Debt

Saving Power

If you are not careful it can be very easy for the electric bill to get more expensive than you…
Saving Power
Photo of Two Dollar Bills illustrating the article Don't Be Sorry, Save

Don't be Sorry, Save 2

For those caught in betrayal, the new trend is for them to appear on television and, as…
Don't be Sorry, Save 2

Buying a House

A house is by far the largest purchase most individuals will ever make in their life, so it…
Buying a House

Easy Gain Easy Loss

If you want financial advice the wise King Solomon once said this, “Money that comes easily…
Easy Gain Easy Loss

Thrifty Lady

Okay ladies how can we save money on stuff? Guys don't have as many options in the clothing…
Thrifty Lady
Love and Money Part 2: Photo of briefcase filled with 100 bills, with some bills scattered around

Love and Money Part 2

In “Love and Money - Part One” we described the first three of the five financial…
Love and Money Part 2
FQs for Kids

FQs for Kids

When I was a teenager, the educators of my day believed that your IQ, or your Intelligent…
FQs for Kids

Outside the Box Finances

A number of years ago I read a delightful story about a highway traffic problem in which an…
Outside the Box Finances

Don't Let Pleasure Make You Poor

The wise Jewish King Solomon offered some good counsel. “He who loves pleasure will be a poor…
Don't Let Pleasure Make You Poor

Developing a Saver's Attitude

The strikes at both the American and the world economy keep coming. According to the February…
Developing a Saver's Attitude

Publish the Menu module to "offcanvas" position. Here you can publish other modules as well.
Learn More.


donation