About fifteen years ago, I moved back home from college and opened up an account at a local bank. It was a pain in the neck. I hated standing in line, I hated their hours, and I didn’t like all of their fees. At the time, I was one of the early adopters on the Internet, and I signed up for an account at an FDIC approved online bank. At first, I treated it just like a local bank account, writing checks to pay my bills. When I received a check, I used a postage paid deposit envelope to mail it in. When I needed cash, I just used an ATM. What I really loved was the great rates and lack of fees.
Later, the bank was purchased by a large multinational bank, and they added all of their traditional fees. I jumped ship and landed at another Internet only bank, where I have been ever since. They offer great rates, little or no fees, and excellent telephone customer service 24 hours a day. They even offer me a fee rebate on my debit card.
Even though you can now bank online with any company, the rationale for Internet only banks is still clear. Not having branches all over town saves money and allows them to offer low rates and fees. Not having to handle any cash must be a huge money saver as well.