How To Pick An Online Bank?Submitted by Castlebar Asset Management on November 24th, 2015
Savers have you been frustrated with low interest rates offered from banks? I feel your pain! Universally clients always ask where they can get a little bit better interest rate for their savings accounts. I usually tell them that they need to be patient and interest rates will rise someday. Looking to online banks is a viable alternative. There are more attractive rates found from online banks in the current environment.
Before looking to sign up with an online bank you will need to ask yourself a few questions. Are you using this just for a place to stash your emergency or rainy fund or are you looking for this account to replace your current brick and mortar bank? If you are just looking for a home for your savings than your needs are pretty simple. Moving your checking, savings and other accounts from a branch to an online bank will have different requirements.
Finding a home for your savings is pretty straight forward. You are hunting for the highest interest rates at an FDIC registered bank. You can use NerdWallet or BankRate to find the best rates for money. You will also want to look at a couple of other items. Make sure there are no fees and your account size will be over their minimum. Be sure to check out the website functionality. If you try out the website and it does not seem intuitive then look around at another bank. You may not visit the site that often and that is good thing if you want to leave this money alone. Feeling tempted to grab it for non-emergency things is an important reason to move some of your rainy day fund to somewhere other than your day to day bank.
Replace You Bank
If you are taking the plunge and dropping your local bank you will have more needs than just a home for your savings account. The same rules as above apply but you will also want to take these additional items into consideration.
The mobile app will replace your local branch. You’ll be depositing checks using your phone and transferring money on the app. Take a look at an online banks mobile app in your app store so you are comfortable with its layout and functionality.
You will want to check out an online banks ATM fee rules. Most online banks will rebate you any ATM fees you incur since they don’t have their own ATM networks.
Just like you do before you hire a babysitter, go to a new restaurant or book a hotel – Google an online bank. Customer service is crucial with any financial institution. Since you are giving up a branch network you’ll want to make sure any online bank you choose has a great customer service track record.
Disclaimer: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.