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.

What To Look For In An Internet Only Bank

The bank should have virtually no fees. You should not pay any ATM fees, and in fact, they should refund fees that other banks charge you for using their ATMs. My bank refunds up to $6 a month in other bank’s ATM fees, which I have found to be more than sufficient. Your bank should also be able to accept deposits via ATM through a common banking network that is available in your area. In addition, they should give you unlimited, postage paid deposit envelopes for mailing in checks.

The bank should also offer quality, telephone customer service. Feel free to call up the customer service line some time and see how long their hold times appear to be, and how knowledgeable their agents are. If necessary, just call them up and quiz them on the terms that you read off their website. If they don’t even know their own policies down cold, you might consider another bank.

Another thing that I look out for is the ability to set up autopay with an online bank. For example, I carry a cash back credit card which I pay in full every month. I earn great rebates. But the reason is because I always pay off my bills and avoid finance charges. I like things to be automated. So this is a very important feature for me. There is no point having a rewards credit card and then losing your points because of accidental late payments.

Finally, do your research online. There are many sites like this and others where people go to extol the virtues and decry the failures of their bank. The 21st century is now old hat, and we no longer expect to hold a newspaper, pay long domestic distance phone rates, or purchase music at a store; now may be the right time to stop dealing with a banks that invests it’s money in branch offices.