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First Internet Bank Money Market Account 2020 Review

| Money Rates Columnist.

First Internet Bank of Indiana was the first FDIC-insured financial institution to operate entirely online.

Today, the bank offers a wide range of personal and business banking products, including a money market savings account. Read on to learn more about how the First Internet Bank Money Market Account works.

First Internet Bank Money Market Account Essentials

First Internet Bank offers a money market account to help you earn interest at a competitive rate and grow your money faster. Aside from being FDIC-insured, here are some other key features and benefits to know if you're considering this money market account option:

  • Earn interest at an APY that's more than 10 times the national average
  • Receive a free ATM card for convenient access to your savings
  • Make unlimited deposits
  • Schedule unlimited transactions via online and mobile banking
  • Open an account with as little as $100
  • Make up to six withdrawal transactions per month without a penalty fee
  • Get up to $10 in ATM surcharges refunded each month
  • Pay a low $5 monthly maintenance fee

We'll dive into those features in more detail in this First Internet Bank of Indiana review; but for now, let's look at the pros and cons of this money market account.

MoneyRates Editor's Analysis: Pros & Cons

Deciding where to keep your savings is a big decision. Before opening an account with First Internet Bank, here are the main pros and cons to know about this money market account option:

Pros:

  • Earn interest that's well above what you could earn with traditional brick and mortar money market savings accounts
  • Opening an account requires a deposit of just $100, which is good if you're just getting started with saving
  • Get up to $10 per month in ATM surcharges refunded when you use your First Internet Bank of Indiana ATM card to access your account

Cons:

  • There is a $5 monthly maintenance fee to be aware of; but there's also a way to avoid, which is discussed below
  • An excess withdrawal fee of $5 may apply after six withdrawals in a month

First Internet Bank of Indiana Money Market Account Rates

Any time you're researching deposit accounts, it's important to consider the interest rate you could earn and how that rate is applied. Specifically, you may be wondering which bank has the best money market rates.

The First Internet Bank Money Market Account offers one of the most competitive rates around for money market accounts. In fact, it ranked second overall for the best money market rates in the second quarter of 2020 in the America's Best Rates Survey.

Alongside other online banks, such as CIT Bank, it consistently rates as one of the best money market account options all around.

That's good to know if you're interested to grow your money as quickly as possible. The higher the interest rate and APY, the better.

First Internet Bank Money Market Account Monthly Fees

It can be bothersome if you're handing back some of what you earn in interest to the bank each month as a maintenance or service fee. When comparing online banks to traditional banks, you're typically less likely to pay a monthly maintenance fee with an online bank.

First Internet Bank of Indiana, however, does charge a monthly fee for its money market account. The fee is set at $5. But the upside is that you have a way to get around paying it.

How to avoid the monthly maintenance fee

If you have a First Internet Bank Money Market Account, there's a simple way to avoid the monthly maintenance fee. You can maintain a $4,000 average daily balance in your account.

If you don't normally keep that much in a money market account or you're just starting out with saving, the fee may be harder to avoid. So it's worth keeping in mind when weighing whether to open this account or not.

Other First Internet Bank Money Market Account Fees

Aside from the monthly maintenance fee, there are a few other fees of which to be aware with the First Internet Bank of Indiana Money Market Account. Those fees include:

  • $3 paper statement fee (avoidable when you sign up for electronic statements)
  • $3 fee per statement copy
  • $5 ATM card replacement fee
  • $30 insufficient funds fee
  • $20 returned item fee

Another key fee to know is the excess withdrawal fee. Unlike checking accounts, withdrawals from savings accounts and money market accounts aren't unlimited.

First Internet Bank limits you to six withdrawal transactions per month. Each transaction over that amount can trigger a $5 excess withdrawal fee.

That's important to know since this account does come with an ATM card. Withdrawing cash may be convenient, but it could cost you if you get into the habit too often and trigger the excess withdrawal fee.

More First Internet Bank Money Market Account Features & Benefits

There are two notable features about this money market account that are worth mentioning again.

First, you get an ATM card which can make managing your account easy and convenient. Not all money market accounts offer an ATM card or debit card, so this is a nice perk to have.

The second benefit ties into the first. When you use your card to make withdrawals or other transactions at foreign ATMs, First Internet Bank will reimburse you for up to $10 in ATM surcharges each month.

If you're curious about whether this money market account also offers check-writing abilities, the answer is no. But if you have a First Internet Bank checking account, you can easily move money between it and your money market account when needed.

Other Ways to Save with First Internet Bank of Indiana

Aside from money market accounts, First Internet Bank of Indiana also offers the following:

  • Checking accounts (including interest checking and free checking)
  • Free savings accounts
  • Health savings accounts
  • Certificates of deposit
  • IRAs (Individual retirement arrangements)
  • Tomorrow's Tycoons savings accounts for kids

The free savings account offers a high yield so you can earn interest on your money. The APY isn't quite as high as it is with the money market account, but opening an account may be easier for beginning savers. (The minimum deposit requirement is just $25. And best of all, there's no monthly maintenance fee or minimum balance requirement.)

If you're interested in First Internet Bank of Indiana CD rates, you can choose between these terms:

  • 3 months
  • 6 months
  • 12 months
  • 18 months
  • 24 months
  • 36 months
  • 60 months

The best CD rates are reserved for the 60-month CDs. First Internet Bank doesn't offer jumbo CDs, but you will need at least $1,000 to open any of its CD accounts.

Also keep in mind that First Internet Bank does charge a penalty for withdrawing money from one of its CDs prior to the maturity date. This penalty is a set number of days of interest earned.

In addition to saving with First Internet Bank of Indiana, you can also apply for home loans, personal loans, student loans and credit cards.

How to Open a First Internet Bank Money Market Savings Account

To open a money market account with First Internet Bank, you first need to navigate to the bank's money market page.

Once there, you can complete the application that's required for opening an account. You need to tell the bank your:

  • Name
  • Address
  • Email address
  • Phone number
  • Type of account you want to open
  • State-issued ID number (you can fill this in on a form or scan your ID)
  • Account information for the bank you want to transfer funds from to make your initial $100 deposit

You can open an individual money market account or a joint account. If you're opening a joint account, you'll need to provide the same personal information for the other person.

Once you plug in your information, First Internet Bank will review your application and open your account. First Internet Bank will email you a copy of your account disclosures. From there, you just have to wait until your ATM card arrives in the mail.

In the meantime, you can manage your account online or through the First Internet Bank mobile app. If you need help with your account, you can reach customer service by emailing bank@firstib.com or calling 1-888-873-3424.

Is a First Internet Bank Money Market Account Right for You?

If you're reading other First Internet Bank reviews, you may be familiar with the money market savings account already. But if not, this review has hopefully shed some light on what's good about this account.

Overall, opening an account could make sense if you're comfortable with an online bank and you want to earn interest on savings at the best rates. Compared to brick-and-mortar banks and even many online banks, First Internet Bank outstrips the competition in terms of the interest rate you could earn - and it is frequently listed among the top ten banks in the America's Best Rates Survey.

Just be sure to keep the $5 monthly maintenance fee in mind. You may want to look for another money market or savings account that has no monthly fee if you don't think you'll be able to meet the $4,000 average daily balance requirement in order to avoid the fee.

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