Released: February 12, 2007

Online bank accounts aren’t for all

Source: Aleksandra Todorova, SmartMoney

How would you like a checking account that earns 3% or more? It’s one of the latest offers from online bank ING Direct and Jacksonville, Fla.-based EverBank. The catch: Both accounts are only available online. This means, among other things, that you have to be comfortable not having a local bank branch to deposit a check or make a withdrawal.

By now, many consumers have become used to the idea of online banks, at least for certain functions. High-yield online savings accounts currently offer yields of 5% or more, and roughly 8% of U.S. households are taking advantage of them, according to market research firm Forrester Research. Many more enjoy the conveniences of accessing their brick and mortar bank’s web site to pay bills and monitor accounts.

But are they ready to take their online banking relationship to the next level with an online-only checking account? As competition heats up, some banks are, well, banking on it.

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