Online Banks such as Ally and Capital One 360 (the former ING Direct) offer higher rates of interest than traditional “brick and mortar” banks such as TD Bank, Androscoggin and Norway (which also offer online banking services).
But as always, it pays to read the fine print.
Ally Bank’s Money Market account for example, currently offers the highest rate of interest for a money market account that does not require maintaining a minimum balance (or a minimum initial deposit).
Ally does not charge any services fees with this account – plus you get free checks and a Visa Debit card that you can use for free at another bank’s ATM machine (fees are reimbursed to your Ally account).
However with Ally Bank’s Money Market account, you are limited to 6 transactions per 30 day statement period.
By transactions, Ally means ATM withdrawals, checks written and cash transfers to external bank accounts.
NOTE: deposits are not considered to be transactions. You can make as many deposits as you want.
If you exceed six transactions during a statement period, you will be charged a $10.00 “excessive transaction fee.”
Ally Bank’s Ally’s Interest Checking account has a lower rate of interest than the money market account but at the time of this writing does not have any limitations to the number of transactions you can make per statement period.
As with the money market account, you get free checks and a debit card (MasterCard) without any service fees or minimum balance to maintain.
You can make deposits to an online bank by mailing a paper check, electronically transferring funds from another bank or through a mobile phone application.
Ally offers mobile apps for both Android and Apple iOS devices.
Customer support for online banking customers is typically available through phone, chat and email.