Online Banking Review

Online banking continues to grow

According to banking experts, online banks have many compelling advantages over brick-and-mortar banks. Online banking lets you check your balance and transfer funds from the comfort of your own home on weekends and evenings when other 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.

The line is a bit blurry 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 have a few brick-and-mortar branches or are affiliated with a traditional bank somewhere. 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. (It's worth noting that the ratings are dated September 2008, right as the U.S. economy tanked.) ConsumerReports.org discusses Internet banks but rates only traditional banks, some of which also offer online banking.

The Consumer Reports ratings are from a 2006 survey, but we found several much more recent reviews of traditional banks. The March 2009 scores at Keynote Systems, Inc., provide detailed rankings of 26 banks, and the April 2009 rankings of the five biggest banks at ComScore.com are also useful. ComScore even analyzes customer satisfaction with the banks' websites. The slightly older rankings at The American Customer Satisfaction Index (ACSI) are also useful. At BankRate.com, we found a useful article on the high-interest checking accounts offered by some small community banks.

For evaluating Internet banks, we found the most current all-around review at Kiplinger.com, whose December 2008 issue recommends the best Internet banks for online checking, savings and money-market accounts. We also found a plethora of news and reviews of Internet banks on blogs.