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Online Banking

     Online banking is becoming the latest fad, but is it for you? You've seen the ads on TV, but what's all the hype about? The online banks are claiming they pay higher interest rates on savings accounts than local banks, and most of the checking accounts offered by online banks pay interest on your balance. They let you pay your bills online and check to see which checks have been paid right from your computer. They also claim lower mortgage rates than local banks that have the higher overhead of brick-and-mortar branch offices. Let's look at the facts. There are two types of online banking. There is the online banking provided as an adjunct service by brick-and-mortar banks and there are the services provided by banks that only have an online presence. It's this later group that is claiming you can get more services for lower fees through them than you can get down the street at a traditional bank. Being able to check balances, transfer funds between accounts, view paid checks, and pay your bills online are nice features for those with a computer, but if you shop around you can find a local brick-and-mortar bank that also offers these services. There are some drawbacks to online banking. The online application at an online bank is usually longer than you would find at a local bank. You deposit funds to your online bank account by mail, with its inherent delays. You can withdraw funds from an online bank by writing checks or at most ATMs, however you will usually be charged a fee for ATM usage since your online bank doesn't have any ATM's of its own. If you need a cashier's check or any other service at a moments notice, you'll need to walk into a local bank where you won't be recognized as a valued customer. If you need a mortgage, there are a number of online mortgage services offering all the advantages and reduced overhead of the online banks.

    So what are the advantages to using online banking? We didn't find any. If you make a couple of phone calls to your local brick-and-mortar banks you will probably find one offering a full featured complement of features you can access from your computer; interest checking; and above market rates on a readily accessible Money Market Account.


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