The 4 Online Bank Stalwarts: VirtualBank, Capital One Bank, First Internet Bank, and Bank of Internet

One of the biggest questions asked about online banks and the deposit deals they offer is whether or not they will continue to offer competitive deposit rates or will new customers who open a promotional checking account, savings account, money market account, or CD find their rates lower in the future. The annoyance and cost of switching online banks can be frustrating, so banking customers are looking for online banks who are consistent and offer good service. Four banks have stood the test of time (+6 years) and have consistently offered deposit rates in the highest 5% of the rates posted by FDIC-insured banks, frequently posting rates in the top ten for a particular product. The four banks who earned the distinction of being recognized by The Savings Investor as the most consistent of the online banks are:

(1) Capital One Bank - Capital One absolutely tore up the competition with longer term CD rates that were at one time 30 points ahead of the competition. Worries about the profitability of the bank and loan losses cooled off their rate aggressiveness a bit, but their deposit rates remain extremely competitive on money markets and CDs. This bank is one of the very few to offer 5.00% yields on deposit terms from one year to five years.

(2) Bank of Internet - The most consistent of the four over the last six years, Bank of Internet steadfastly offers checking, money market, savings, and CD rates near the top of the list for each category. In addition the Bank of Internet has offered very unique checking accounts called Freedom Checking, Boomer Checking, and Senior Checking with special features based on the age of the accountholder. All three checking accounts are currently offering an APY over 3.40% over 7 times the national average on similar-type checking accounts. A customer at this bank has had a solid six years of being able to earn superior rates without any unfortunate rate surprises.

(3) First Internet Bank - First Internet Bank is a relatively quiet bank based out of Indiana. This bank exemplifies the positive side of online banking for consumers who earn high rates on their deposits and pay much lower fees than they would at a local bank or by banking with one of the large multi-branch banks. First Internet Bank has popped in and out of the rate lists over the last six years without every truly disappearing. Customers have reported a positive experience at this bank with customer services complaints very minimal. First Internet Bank is one of the few online banks who offer business accounts rates equal to or nearly equal to their consumer rates.

(4) VirtualBank - This online bank has not only posted deposit rates in the top 5% for the last 6 years, they have offered some of the best loan rates particularly on auto loans. VirtualBank has offered better deals on money market accounts and CDs over the years than checking and savings accounts and has even occassionally topped the list of best rate offered by a FDIC-insured bank on a particular term or product.

Congratulations to each bank for their distinction and earning our respect. Please visit each bank’s site for more information.