Initial Internet Bank Review: Advantages, Disadvantages and Alternatives

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First Internet Bank was one of the first online-only banks.

Online banks are known for offering low-fee accounts, attractive APYs on savings, and other convenient banking features. However, not all online banks are the same, so it's important to shop around and compare features before opening an account.

First Internet Bank is the original online bank and offers a high-yield, interest-bearing checking account Money market savings, CDs and more. How does it compare to top names like Ally and CIT Bank? In this review, we explore everything First Internet Bank has to offer.

• Online bank without physical branches.
• Interest-bearing checking account and CDs with attractive conditions.
• The money market savings account offers most savers an APR of 3.77%.

What is the first Internet bank?

The First Internet Bank was founded in 1999 by David Becker. This financial institution was the first federally chartered and FDIC insured institution to operate entirely online. You can work with this bank from any state if you can conveniently do all your banking online.

What does it offer?

First Internet Bank offers various types of financial products, including business loans. However, for the purposes of this review, we will focus on the deposit account products.

Business audit

First Internet Bank offers entrepreneurs an interest-bearing checking account. As of this writing, you can earn 0.50% APY if you have an average daily balance of at least $10,000. There is no monthly fee or minimum balance to use this account.

In addition to interest, this account allows unlimited business transactions and cash flow analysis tools.

Business savings

You can access a Business Money Market Savings account and a Business Regular Savings account through First Internet Bank.

The Business Money Market Savings account has an APR of 3.46% for balances of less than $5 million. If the balance is over $5 million, the APR increases to 5.48%. The $5 monthly maintenance fee can be waived if you have a daily balance of $4,000.

The Business Regular Savings account has an APR of 0.91% on all balances. If you have an average daily balance of $1,000, you can avoid the $2 monthly fee.

Money market savings account

First Internet Bank offers a money market savings account.

At the time of writing, this account carries an APR of 3.77% for accounts with a daily balance of less than $1 million. If you have more than $1 million in this savings account, you'll benefit from an APR of 5.48%.

The account has a monthly maintenance fee of $5. However, you can avoid the fee by maintaining an average daily balance of at least $4,000. You need at least $100 to open this account.

Free savings account

If you don't want to worry about a monthly maintenance fee with no account balance, First Internet's free savings account is an option. The effective annual interest rate is currently 0.81%.

You need at least $25 to open this account.

Interest-bearing checking account

You can invest your money in an interest-bearing checking account at First Internet Bank. At the time of writing, the account has an APR of 0.50%. Although there is a $10 monthly maintenance fee, you can avoid this fee by maintaining an average daily balance of $500.

You need at least $100 to open this account. If you prefer a free checking option with no monthly fees, you're missing out on the interest-bearing features.

Certificates of Deposit

First Internet Bank offers a wide range of CD terms, many of which come with attractive APRs. Here is a look at the current CD tariffs:

• Earn 4.14% APY through a 3-month CD.
• Earn 5.18% APY through a 6-month CD.
• Earn 5.31% APY through a 12-month CD.
• Earn 5.04% APY through an 18-month CD.
• Earn 4.82% APR with a 24-month CD.
• Earn 4.66% APR with a 36-month CD.
• Earn 4.50% APR with a 48-month CD.
• Earn 4.55% APR with a 60-month CD.

When you open a CD, you are expected to hold onto the money for the life of the CD. If you need to withdraw your money early, you will face an early withdrawal penalty.

Entrepreneurs who want to save money can also use CDs.

Are there any fees?

Some of the accounts offered by First Internet Bank incur a monthly fee. In most cases, however, you can waive the fee if you have a certain daily balance.

Other fees that may apply depend on how you plan to use the account. Some include a $3 paper statement fee, a $30 stop payment fee, a $20 outgoing domestic wire transfer fee, and a $5 bank check fee.

How does First Internet Bank compare?

First Internet Bank may be the first online-only bank, but it's no longer the only option. If you're looking for an online-only banking experience, take a look at the competition here.

Ally Bench is a full-service online bank with attractive conditions for savers. In addition to an interest-bearing checking account, Ally offers credit cards, retirement accounts, car loans, personal loansand mortgages. If you want to manage all of your finances under a single roof, Ally Bank may be a better choice.

CIT Bank is another online banking option that offers an interest-bearing checking account, CDs, and more. One advantage is that CIT Bank allows you to choose accounts with no monthly fees.

How do I open an account?

If you want to open an account with First Internet Bank, it only takes a few minutes. First, provide your name, email address, mailing address, social security number and other personal information.

Is it safe and secure?

First Internet Bank is an FDIC insured bank, meaning your money is protected from loss up to $250,000 per person per account type.

How do I contact First Internet Bank?

If you would like to contact First Internet Bank, you can call 1-88-973-3424 or 317-532-7900. You also have the option to send an email to bank@firstib.com. The support team is available weekdays from 7:00 a.m. to 9:00 p.m. and Saturdays from 9:00 a.m. to 3:00 p.m. EST.

The bank has received 3.3 out of 5 stars on Trustpilot, 4.4 out of 5 stars on the Google Play Store and 4.8 out of 5 stars on the Apple App Store. The generally positive reviews suggest that you should have a pleasant experience with the bank.

Is it worth it?

First Internet Bank offers relatively attractive APYs. But savers need a whopping $1 million to take advantage of top rates. Additionally, there is a $5 monthly fee for money market savings. Most online banks, including Ally and CIT Bank, do not charge monthly maintenance fees. They also offer higher savings APYs.

If you're ready to secure your money, you can find attractive terms through the bank's CD options.

Overall, First Internet Bank is a worthwhile choice for savers who want to secure high savings rates, especially on CDs. However, be sure to shop around to make sure you're getting the best possible rates when you decide to open an account.

Check out First Internet Bank here >>

First functions of the Internet bank

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