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Ask the expert: Are online savings accounts worthwhile?

Q: I understand that like anything else, Internet banking has pros and cons. I'm a bottom-line type, so for me the question is this: Am I going to get higher interest rates from an online bank?

A: Is online banking worth it? The answer depends on what you are looking for, but if you are concerned with finding the best rates on savings accounts and money market accounts, the answer may well be "yes."

First, consider some of the more qualitative pros and cons of online banking. You won't have the kind of personal relationship you might develop with a local bank branch, and you might miss that if you depend on your bank for individualized advice and service.

On the other hand, for tech-savvy customers, great service might be defined more by having up-to-date information on their accounts available anywhere, anytime online. Of course, there are security concerns with online banking, but some sensible cautions can help reduce those risks. Frankly, banks keep all customer data electronically these days, so no customer is immune to the risk of electronic information theft.

When it comes to savings accounts or money market accounts, as opposed to a more transactions-oriented checking account or a more judgment-based lending relationship, the notion of old-fashioned personal service might not be as relevant anyway. After all, the idea is to put money in these accounts and largely leave it alone for a while.

So, taking personal service out of the equation to a large degree, the question with online savings accounts and money market accounts is whether they deliver in terms of higher rates. The answer in many cases seems to be "yes." According to the MoneyRates.com analysis of America's Best Rates, online banks were prominent among those consistently offering the best savings account and money market rates. So, at the very least, online banks are worth a look for these accounts.

Got a financial question about saving, investing, or banking? MoneyRates.com invites you to submit your questions to the "Ask the Expert" feature. Just go to the MoneyRates.com homepage and look for the "Ask the Expert" box on the lower left.

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