If you're looking for a better interest rate for your savings, an online bank may be just the ticket. Many online banks offer higher rates...
NEW YORK — If you’re looking for a better interest rate for your savings, an online bank may be just the ticket. Many online banks offer higher rates than their brick-and-mortar counterparts.
Just like any banking decision, you’ll want to choose your online bank wisely. From Consumer Reports Money Advisor, here are four tips for how to evaluate an online bank:
• Get the best interest rate. You can check the most recent rates at Bankrate.com. But don’t stop there: Verify those rates with the banks themselves. Also, compare online rates with the rates of banks in your area.
• Know the fees. Many online banks come with a host of restrictions that trigger fees. For example, many online accounts limit the number of transactions each month. They also charge extra for printed statements and in some cases for calling a customer representative instead of banking online.
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• Choose the right account. Online accounts come in many forms. In addition to savings accounts, many include checking and money-market options. There may also be retirement, joint, trust and payable-on-death accounts. You may even be able to get attractive rates on mortgages or other types of loans.
• Be aware of rate changes. Remember that rates on accounts change often. You may receive alerts from your bank in the case of rate revisions, but you might not. If your bank’s rate ever becomes noncompetitive, think about switching.