How do I open an online account?
In order to open an account, go to the online bank of your choice and complete its application. This takes only a few minutes. Then you associate or tie one of your checking accounts with your new account, and your Internet bank makes two small transactions into your checking account. Once you receive these, go back online and enter the dates and amounts of the two transactions, and your account is then opened. Now you may make your initial deposit. Afterwards, you may move money in and out of your account with a mouse click.
Is my money available when I want it?
Your money is not immediately available. When you make a deposit, the bank holds it for three business days before the money appears in your account. If you make the request on a Friday, you may have to wait until Wednesday before your money appears in your account. At the same time, this forces customers to become savers, as their money is just a bit more inaccessible and therefore less prone to impulse withdrawals or purchases.
Is my money protected the same way in an online bank as in a traditional bank?
Yes. The FDIC's coverage is the same for online banks as for brick-and-mortar banks, protecting each account holder up to $250,000 per account.
Can I open an online checking account?
Online banks offer checking accounts that are truly paperless. Your statements and your check register are entirely online. You can set up automatic payments for regular monthly bills, and can easily transfer money to them in the form of an electronic check. You can also write checks for people the same way. The money is either automatically transferred into their accounts, or a paper check can be printed and sent. Since so much of what we do today is centered around online services, it is natural to use online banking.