The case for branches
There are still reasons customers prefer bricks-and-mortar to online banks.
"Customers are often more trusting when they can see branches," says Ely. "A lot depends on their situation. If they want to tap into their cash, it's important to have some sort of relationship locally. One of the reasons is that there will be no ATM charges, or there are times when you need to be in a branch. Deposits in particular are slower if you have only an online relationship. Now there is still some float delay or wire charges."
At Washington Mutual, a spokeswoman says the bank's in-branch offerings are priced competitively and offer benefits only available to branch customers.
"While we may not have the same offer in the store, we sometimes have a similar offer in other products or CD terms," she says. "For example, we may offer an attractive rate online for a six-month CD, while in the stores a similar short-term offer may be with a seven-, eight- or nine-month CD."
At AmTrust, Tutkovics says that before the bank introduced its online operation, customers used multiple channels, including phone, Web and the branch network, to do their banking. "When we designed the products for AmTrust Direct, we kept in mind the online preferences, so the features and functionality meet the needs of a typical online customer."
She expects customers will continue to use multiple channels.
"The customer drives their own channel preference," she says.
What does this mean for consumers?
With so many options available, should consumers look online or at their local bank branch?
"A lot boils down to personal preference," says McBride. "Do you want the convenience of having all your accounts in one place or being able to walk into a branch, or do you want the best return on your money? If you want the best return on your money, then it pays to be a free agent. You may have your checking account at a local bank with access to branches, but for investments such as CDs, you may want to put your money to work someplace else where you can get a better return."
McBride's advice to those shopping strictly for rate: "Cast a wide net. Use Bankrate's search engine to find the best rates online and in your local area. In addition, check the local newspaper tables and local credit unions."
For a closer look at our study, check out the Bankrate feature "2008 CD study results."