The financial implosion of big banks saw the formal introduction of smaller banks, credit unions and online financial institutions promising customers security, transparency and ease. And, for a while they did. Credit Unions saw a bit of a spike in incoming clientele as did online banks; partly because they lured customers in with higher savings interest rates, elimination of fees and free checks.
Call it a survival skill, but for a while it worked. Those promises helped build the reputations of online banks like ING Direct and American Express personal savings accounts, which not only offered all of those features but also highlighted the limited accessibility to the money a person stashed into an account. Those accounts typically require a three to five day lag time in transferring funds from the primary account to the savings account and vice versa.
So, it’s easy to feel overwhelmed with the online banking options. To help with researching these banks, consider a few things: are you going to be charged with a monthly fee? What is the average interest rate for the bank and where does that interest rate in comparison to other financial institutions nationally? Lastly, what are the fees (hidden and otherwise) associated with the bank?
For more on what makes a successful online banking relationship, head over to Reuters.