Q&A with Carmen: Are Internet Banks Safe?

Carmen Wong Ulrich
Carmen Wong Ulrich

By Carmen Wong Ulrich

Question: I was wondering if internet banking is safe for consumers. I have heard about them before and that some of them offer higher interest checking than most banks. Is that true?

        • -Catrice from Alabama

Answer: Online banking is very safe-some say even safer than regular banking since there's little paper floating around with your information on it. Mostly in order to compete in the marketplace (and with low overhead-no tellers or branches), web banks offer some of the highest checking and savings rates around, higher or as high as what we call 'brick-and-mortar' banks.

But if you're looking to make the switch, do it soon as rates at all banks may be heading down with lowering Federal interest rates-a good thing for lowering interest on debts, but a negative for earning interest on savings and checking accounts. To shop for a great internet bank with high-yield savings accounts and checking accounts that earn interest, head to Bankrate.com.