Still my favorite online bank
Written: Feb 26 '05
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Pros: Decent interface, above average interest, Quicken Direct Connect, free bill pay
Cons: Same cons as all internet-only banks, not as good as they used to be
The Bottom Line: Internet-only banks are not what they used to be, and they were never an option that worked for everyone. They're still a good deal, though, and FirstIB leads the pack.
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| parsonsj75's Full Review: First Internet Bank of Indiana |
Two things to start out with:
-First, internet-only banking isn't what it used to be
-Second, internet-only banking is definitely not for everyone.
Those being said, FirstIB is still my favorite online bank.
I joined FirstIB in the end of 2000. I joined after I stopped working for a bank, and no longer qualified for the special employee fee-free benefits. I had learned about internet-only banks before, ironically after reading an article my bank (Home Savings of America, later bought by Washington Mutual) gave out in flyers to customers, showing our bank as the second best in America. The best was an internet-only bank.
So when I decided to go with an internet-only bank, I researched thoroughly. At the time, the two with the best benefits were FirstIB and Umbrella Bank. I went with FirstIB because I liked the interface better. (I just checked out umbrellabank.com today, and I still don't like the layout of their pages, and their interest has gone almost as low as brick-and-mortars.)
About Internet-Only Banks
At the time I opened my account, internet-only banking was a too-good-to-be-true setup--I got about 5% interest on my checking account, with no minimum for interest, no service fees, free bill pay (unheard of at the time), and ATM surcharge rebates. Since then, no internet bank provides anything close to that (partly because interest rates have gone even lower than I ever imagined possible--I still can't get over the fact that the national average for savings account interest is actually below 1%). Now, I only get 1.06% APY on checking, have to keep an average monthly balance (note, still not minimum daily balance, like most banks) above $500 to earn interest and avoid a $4 service fee, and free online bill pay is not as rare as it used to be (many brick-and-mortars are doing it now). ATM surcharge rebates are still awesome though.
I still think internet-only banking is worth it, but it's not for everyone. Some people just don't feel comfortable having a bank with no branches. If that's the case, there's nothing you can do. For any other concerns, there are some workarounds. Here are the potential issues:
Deposits. This is a big one. If you rely on checks (or cash) getting into your account ASAP (especially if you don't have direct deposit), internet-only banking is probably not for you. There are many deposit options, most of which either take a while or cost you a fee.
Direct deposit of course is fantastic. Also, if you have a brick-and-mortar account you can deposit to (it could even just be a free plain savings account with no minimum balance requirement), you can use it as a vehicle for deposits. With FirstIB, you have to set up the account 14 days ahead of time, in writing. After that, just deposit to the brick-and-mortar, go to the FirstIB website to request an ACH transfer, and you're done. If you request by 3pm Eastern, it's available in your account the next business day. Later, and it will be the day after that. Not perfect, but not too bad.
Also, if you keep a little padding in the account, a few days' wait is no big deal. (And if you don't have a little padding, you should--really, no matter where you bank. Anyone can save money, no matter how much you make--but I'm getting off topic, you can read about that elsewhere.) The padding can even be in the form of a linked FirstIB savings account, where you can earn more interest, and if your checking overdraws, they transfer from the savings.
Personally, I have direct deposit and a linked savings account. When I have a check to deposit, I send it in the mail. I have another account at a brick-and-mortar, but I never use the ACH method because I never get around to going to the bank, and a mailed check will credit quicker than I can make the deposit. But that's me.
Withdrawals. Workaraounds galore on this one. Yes, there are no branches, but fast, free withdrawal options abound. With ATM surcharge rebates, I can use more ATMs for free than any brick-and-mortar customer. To avoid surcharges altogether, I just go to a surcharge-free ATM, like Washington Mutual. (Just an aside, but I always thought it was a little unfair that Washington Mutual, while not charging other banks' customers the ubiquitous $1.50 surcharge on their ATMs, they still charge their own account holders $.75 to use another bank's ATM....)
But you want to withdraw more than the $500 daily limit? That's easy if you have a debit card. (I know some people hate these, but I've never had a problem, and I love them.) Just go to any bank, walk up to the teller window and ask for a cash advance. It's not really a cash advance, though, because it's withdrawing from your checking account. Any bank that does cash advances will do this, regardless of where the card is from. There is generally no limit on cash advances. You can even have the money in the form of a check. (Some banks will charge a fee, though--look for a bank that won't.)
But you need a cashier's check? First, you can have one sent from FirstIB. If it's payable to someone else, you need to request it in writing, by mail or fax. Otherwise, just do it at another bank (like above), paying cash, or possibly even using a personal check. Again, look for one without a fee.
Accessing account information. Well, it goes without saying that if you're not comfortable accessing your account electronically, internet-only banking is not for you. Paper statements are usually charged. Of course, you can always print your own from the electronic versions you get online. You also won't get your checks back in the mail, but with many banks (FirstIB included) you can see photos of the front and back online, earlier than you would get them with a statement.
Rating FirstIB
As I said before, they're not as good as they used to be, but no internet-only bank is. In the current climate, here's how FirstIB stacks up:
Interest Rates. Still one of the best. Always above average, and generally in the top 5%, for all accounts--checking, savings, money market, and CDs.
Fees. Also among the best. Some accounts have monthly fees if deposit requirements aren't met, but there are free accounts, too. The free ones don't pay as high interest, though--just as much as free accounts at other banks. Considering the difficulty of depositing, it would be nice if they didn't charge fees in those categories. One that irks me is a relatively new one (greater of 3% or $10) for inbound transfers from another bank's credit or debit card. It can be avoided by using ACH, and they probably did this to encourage customers to use ACH (credit/debit transactions are expensive for the party receiving payment), but I still find it a little annoying on principle.
Account Access. Again, one of the best. I like the visual design and organization of the website, and they offer Quicken DirectConnect, which is very nice if you use it. Bill payment is easy to use and set up.
The interfaces for online banking and bill payment have changed over the years, and I have to admit I like a lot about the old ways better. But some of the problems mentioned by other users were actually user errors, and I certainly wouldn't say they are "unusable" if you do a lot of online and automatic bill payment. For example, one person said you can't filter histories. While I know what they're talking about, and I liked being able to do this, say, to look at all of my checks in the last 2 months, or see all my bill payments to a single payee, this is still very easily done by sorting. For the checks example, I call up all transactions, click on the "check number" heading, and all my checks are at the top of the list. For the payee example, I do the same thing, clicking on the "payee" heading. In the end, the bill payment interface is not my favorite, but it's very usable.
Customer service. No complaints here. Well, maybe one. It would be nice if I could talk to a person 24/7, on the rare occasion that I need it. As it is, they're only open during regular business hours, with an automated teller the rest of the time. This is pretty common with most banks, though.
When I have talked to customer service, they have always been very helpful and knowledgable, and with little or no hold times. Once, I accidentally made a transfer deposit into a new CD (wanted to see how the process worked, thought I had one more confirmation step before sealing the deal). I called the next day, and they transferred the money back immediately (it was a FirstIB CD), and without any early-withdrawal charge. Another time, I was having problems with my Quicken DirectConnect. They tech supported me through the problem (not a simple one, either), even though it was an issue with Quicken and not the bank.
Final Comments
Keep in mind, things are always changing. Interest rates change and banks add fees on a regular basis (remember when ATM surcharges didn't exist?) Usually, once one or two banks add a fee, the rest eventually follow suit. This starts with brick-and-mortar banks, follows with credit unions, and finally follows with internet banks. Reviews on this kind of thing lose their currency quickly, and you'll have to do your own research on current conditions. I will say, though, that over the past 4 years, throughout industry-wide changes, FirstIB has remained at the head of the pack, so they probably will stay that way.
Recommended:
Yes
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parsonsj75
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