Dave Says: Are Online Banks Reliable?

Dear Dave,

How do you feel about using an online bank for your emergency fund?

Jared

Dear Jared,

I don’t think that’s a problem at all in most situations. Just make sure you do a little research. Know who you’re dealing with and that they’ve got some strength. A bank that is known as a “click and mortar”—one that has a physical location as well as online—would be my preference. Some of them have great debit card programs that include debit card rewards and high-interest checking accounts, too.

When it comes to an emergency fund, I like the idea of keeping it in a separate money market account. That way you get money market rates, plus you can attach check writing privileges to the account. Then when an emergency comes along, you don’t have to worry about shuffling money around. You can just write a check out of the account. Problem solved!

— Dave