Who are the true Internet-Only Branchless Banks?
These days online banking is very common at FDIC banks. Customer can log-in and access their account information, transfer money and pay bills. In fact, if your bank does not offer online banking they are living in the past. But what is true green banking? Is it good enough to just have online access. After all, this saves paper and carbon emissions. What about banks that are brick-and-mortar, but have online divisions with a separate online presence than the main bank? These banks offer great rate deals, but is it a compromise? Or finally, do you need to actually find a true internet-only bank to consider yourself banking eco-friendly? We break down some of the distinctions below between the different types of online banking:
True internet-only banks (no branches)
Starting back in 1995 banks with no branches popped up and offered banking services on the internet. NetBank, based out of Atlanta, Georgia, was one of the leaders and was a high-flyer with a rapidly growing deposit base. The stock of NetBank was one of the internet phenoms rising to over $240 a share from under $10 share. But like a lot of dots-coms of 1995-2000, what went way up also went way down. NetBank suffered huge growing pains and mortgage losses and was eventually closed down by the FDIC in 2007 with EverBank taking over the deposits of the failed bank.
But the NetBank story did not stop other internet banks from surviving or others launching based on the branchless bank model. If you really want a bank with a low carbon emission profile, you just can’t beat a bank with no branches. As long as verify that the bank is a real FDIC-insured bank (check FDIC.gov), there is no reason that you should be scared off by a branchless bank. On average, internet-only banks pay higher rates on CDs, money market accounts and savings account and charge lower fees. It’s that simple.
Examples of true internet-only banks:
Virtual Bank, American Bank, EverBank, Bank of Internet, First Internet Bank of Indiana
Banks with online divisions (internet-only access)
The next step down from a true web-only bank is a bank that has opened an online division and maintains a separate identity for that division. With this set-up, all deposits are still federally-insured under the same bank certificate number. But the online division will very often higher CD rates, checking rates, savings rates and money market rates. They can also have a different fee structure. These banks are rewarding customers who will bank online. This is green banking that you should consider. You are still reducing paper and your carbon footprint. You can also make money off your deposits and manage finances easier.
Examples of banks with online divisions:
Wilmington Trust (WTDirect.com), First National Bank of Omaha (FNBODirect.com), Presidential Bank (Presidential Online Bank), Summit Community Bank (SFGI Direct)
Brick-and-mortar banks with online banking
What about the big boys? Nobody advertises online banking more than the nation’s largest banks, yet they also make socially irresponsible loans, pollute on a larger scale and typically charge us higher fees. Sure you would still prefer banking online with a bank that has 1000 branches over banking with a local bank that has no online banking at all, but that might not be good often. The big boys offer online banking, but that is not enough to call them a green bank. Unless you can see a commitment to socially progressive policies and lending, try to find a bank that is a little greener than the mega-banks.