checking

Should you bank online?

And of course, some customers shy away from Internet-only banks because they want higher levels of personal service and feel more comfortable with a bank that has built up a solid reputuation over many years, Isler says.

"For some people, there's a certain cache in being a customer of a respected (brick-and-mortar) bank," he says.

Because Internet-only banks are not practical for depositing or withdrawing cash, many online customers maintain checking or savings accounts at traditional banks and transfer money to and from their Internet-only accounts.

Cindy Richards, editor of TravelingMom.com in Oak Park, Ill., is among those who use online and brick-and-mortar banking.

She likes the convenience of doing her banking online at odd hours. But she and her husband also rely on a local bank for business loans and savings accounts for two teenage children.

"It's nice to walk into a bank and somebody knows who you are," Richards says.

Safety and security

Security is a major issue for Internet-only banks and more traditional banks that offer an online banking option.

The No. 1 tip for safe online banking is to confirm that deposits in an e-bank are insured, according to the Federal Deposit Insurance Corp. Check the online bank's Web site for a prominent note saying "FDIC-insured" or "Member FDIC," and verify this information on the FDIC's Web site.

The FDIC also recommends using a private password to access an online bank account, securing your computer with antivirus software and reviewing the online bank's customer privacy policy.

More than 2,600 active Web sites use the practice of "phishing" to try to gain access to personal financial data, according to the FDIC.

Phishing occurs when scammers send e-mails to people in an attempt to dupe these customers into disclosing account information. The e-mails usually appear as if they are coming directly from the customer's actual bank.

However, banks never send customers e-mails asking them for personal data. Anyone who gets this type of e-mail should assume it's counterfeit and delete it, Meyer says.

"The simplest way to prevent fraud is (by) deleting e-mails requesting your personal information from a bank," he says.

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