Easy Money, a Click Away

Most of these high-yield accounts are pure savings vehicles, so they don't offer check writing, says Greg McBride, senior financial analyst at Bankrate.com. So now, online banks are expanding into checking, too. Most banks already allow you to use your checking account to pay bills online. But you probably earn no interest or earn only a nominal amount. At the top 50 banks, it's a meager 0.45 percent.

So how would you like to earn 4 percent on a checking account, with no fees and no minimums? That's the yield on ING Direct's new paperless checking account. Everything is paid online or by debit card. If you have to send someone a check, you fill out an online check form; ING creates the check and mails it for you the next day. Schwab's checking account pays 4.25 percent. HBSC will announce its own new checking account by June.

Online checking and some of the savings accounts come with free ATM cards. But you may pay a fee to the bank that owns the ATM you use. Online banks often refund some of that fee. Schwab refunds it all. At ING, you have free use of Allpoint ATMs, in stores and smaller banks.

Cyberbanks offer other services, too—certificates of deposit, mortgages, home-equity lines, auto loans, credit cards, retirement accounts and mutual funds. The best of them emphasize low costs, simplicity and full disclosure of fees. That puts them well ahead of a lot of bank officers in business suits.

What's next for online banking, once checking accounts get tucked away? Probably more help in managing your money. Intuit, owner of the Quicken personal finance programs, has developed money-management software for banks to include with their online sites. Among the options you'll be offered, says Intuit director Paul Rosenfeld: an online check register, so you can deduct written checks from your online account, and a program to help you with planning and budgeting.

Some banking customers worry that online accounts are open to hackers and theft. But I bank online myself, so clearly I think they're secure enough. I love the convenience, not to mention the higher rates. Besides, it's the 21st century. If you snooze, you lose.

Reporter Associate: Temma Ehrenfeld

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