For the savvy investor, there is little that a brick-and-mortar bank can offer that an online bank can not. Keeping in mind that many online banks are "real", long-standing banking operations that are merely reaching out to new clients, it is easy to see the benefits to be had from banking from home. The differences lie in the interest rates, accessibility of funds, and the comfort with which the investor can move and redeposit or reinvest his money.
The average online bank offerings include:
- Savings accounts
- Check-writing privileges
- Money Market accounts
- Jumbo Savings and MMA's (a balance of over $50,000)
- Money Market Mutual Funds
- CD's
- IRA's
- Investment accounts (online stock, bond, and other investment transactions)
- Life Insurance
- Mortgages
- Personal Loans
- Home Equity Lines of Credit
- Home Equity Loans
- Auto Loans
- College Financing
- Trust Accounts
- Online Transfers between banks
- Online Bill Paying
What they cannot offer is the hands-on products such as safe-deposit boxes. In most cases the fees are lower or non-existent, the interest rates on loans are lower, and the rates on deposits and investments are higher than those available in brick-and-mortar-only banks. Tax planning advice is available at some institutions.
Not all banks will offer all of the products listed above, so research is mandatory. Decide which options you are most likely to need, and open accounts at the banks that offer them. Perhaps the biggest benefit of banking online is that the customer has access, as never before in history, to more banks in more parts of the country (and outside it) with a wider range of products from which to choose. Even your local brick-and-mortar bank most likely has an online presence that allows you access to your account information and certain products and transactions. Do not hesitate to open multiple accounts at different banks if the situation warrants it. Online transfers among banks are easy and commonplace. Your local bank does it daily. Now you can do it yourself.
The wise consumer will check all options and make an informed decision. The wisest consumer will opt for the best deal and proceed with confidence that online banking is a suitable choice for anyone with access to a computer and a willingness to step outside the banking box.