Online banks are free to use, generally don't have surprise gotcha fees, and are winning rave reviews from customers.
In general, online banking appeals to younger folks who don't want branches or even to look at someone face-to-face when they do their finances. USAA Federal Savings Bank, which caters to the military community, was a pioneer in online banking. They once allowed non-military customers, but they've since reversed that policy and are now military only.
But it was really ING Direct (now CapitalOne360) who popularized the trend of online banking. They went on to become one of the largest banks in the country without having physical branches.
Here's a look at a few options in the world of fee-free online banking
For years, Discover has offered savings accounts online. Now the financial service company is branching out to online checking accounts, savings, CDs and mortgages. In particular, Discover wants to be a big player in the mortgage market. So really it's like they're following the ING business model, though they'd never fess up to that!
GoBank.com is a mobile banking option that has eliminated overhead by eliminating branches and passed the savings on to you. That means no fees for mobile deposits; free withdrawals at more than 40,000 ATMs; free bill pay; and more.
Are you tired of being fee'd to death at your traditional bank? There could be a "simple" and free solution for you. Simple.com is a new banking alternative that's basically clean-sheeted the idea of what a bank should be. With it, there are no fees on ATM withdrawals, checking accounts, or anything else. Among the other features are depositing checks by taking a picture of them with your smart phone.
There's a great organization that has built a history helping those in the academic field to invest and save for retirement. It's called TIAA CREF. Now TIAA CREF has launched a full-fledged online bank called TIAA Direct. You need $25 to open the High Yield Savings account. Once it's opened, then you can deposit money on your smartphone. Plus, you can access your money at a network of 23,000 free ATMs across the country. Your statements are online. Pretty much everything is online. Like any other online bank, you can tie this one into an existing checking account.