Online Banking Review

Online banking continues to grow

Online banking lets you check your balance and transfer funds from the comfort of your own home on weekends and evenings when banks are closed. Some online banks even provide technical support around the clock. Furthermore, it costs banking companies far less to maintain an online bank than to staff and maintain brick-and-mortar branches. Even when interest rates in general are low, online banks can pass some of those savings onto account holders in the form of higher interest rates and lower fees.

In recent years, the line has become blurred between traditional brick-and-mortar banks (with branches you walk into) and Internet-only banks (accessible only by phone or online). Nearly all Internet banks now have a few brick-and-mortar branches or are affiliated with a traditional bank somewhere. And most national banks offer online banking services to their customers. Also, some small community banks are starting to offer nationwide online banking.

We found a few reviews that cover the whole gamut of online banking. BankRate.com, for example, not only stays abreast of interest rates, but also provides "Safe and Sound" ratings for bank stability, though these ratings are updated only a few times per year. ConsumerReports.org has an informative blog post that discusses online banking and ranks seven online banks in a chart based on interest rates and fees.

The ConsumerReports.org article doesn't cover customer service, but we found several more thorough reviews of traditional and online banks. The April 2010 scores at Keynote Systems, Inc., provide detailed rankings of 24 banks, and the May 2010 rankings of the five biggest banks at ComScore.com are also useful. ComScore.com even analyzes customer satisfaction with bank websites. The slightly older (2009) rankings at The American Customer Satisfaction Index are helpful, too.

For evaluating Internet banks, we found the most helpful all-around review at Kiplinger.com, whose December 2009 issue recommends the best Internet banks for online checking, savings and money-market accounts.

We found a plethora of news and reviews of Internet banks on blogs as well. However, many of these blogs, such as GetRichSlowly.org and DepositAccounts.com, focus on rates and features (both liable to change) without giving too many details about the customer experience. But such sites often have valuable reader comments posted, as do sites such as BankFox.com and StarReviews.com.