Online banks offer new enticements for checking accounts

September 13, 2011

| Money Rates Columnist

If you were initially attracted to online savings accounts because of their high interest rate but were turned off by the idea of an online checking account due to the inconvenience of depositing checks by mail, it might be time for you to take another look.

According to usnews.com, online banks have cleared many of the hurdles that prevented us from loving an online checking account by offering such things as ATM fee reimbursement, debit card rewards and the ability to make deposits by scanning them and depositing them online. And online banks still offer some of the best savings accounts.

Even those of us who find we still need paper checks to pay for certain things will have that option now; ING Direct, for instance, recently introduced paper checks to their previously "paperless" online checking account.

More seniors going online

These innovations come at a time when an American Bankers Association survey shows that more than half of bank customers over the age of 55 now prefer to do their banking online from their home computers or laptops.

According to the magazine Banker and Tradesman, the overall percentage of bank customers who prefer to bank online rose from 36 percent in 2010 to 62 percent in 2011. Only 20 percent said "branches" were their favorite places to conduct banking business, according to the San Jose Business Journal.

Other advantages

Although a Federal Reserve study found that the percentage of payments made by check is decreasing--it dropped 7 percent between 2006 and 2009--a quarter of all payments are still made by check. While many of us use online bill pay services through our banks or credit unions or pay our bills with a debit or credit card, some recipients can't accept those payment options and still need a paper check.

According to the New York Times, ING Direct's paper check system has added a level of security by requiring customers who receive paper checks to activate them online, the way they would a new debit card. The bank expects this to cut down on the risks of someone stealing the checks or fraudulently ordering new checks for your checking account.

Your responses to ‘Online banks offer new enticements for checking accounts’

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Celine Bowdwick

13 September 2011 at 6:00 pm

I don't make out checks anymore, I went to strictly cash and let me tell you it is a whole lot better.

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