'Web-only' banks generate more interest

A typical bank checking account currently pays less than 2 percent interest. Bank money markets scrape along at 3 percent. One-year CDs offer less than 5 percent annual yields. And often banks demand high minimum monthly balances for these meager results.

Need an alternative?

Try a branchless "Web-only" bank. Only a handful of these banks exist. Yet due to their low overhead, they often pay more and require less.

For a minimum deposit of $100, you can open a checking account with Security First Network Bank (www.sfnb.com) and receive a 6 percent annual yield. Net.B@nk (www.netbank.com) is offering a 5.25 percent annual yield on its money-market accounts (minimum: $100). A one-year CD at Telebank (www.telebank.com) has an annual yield of 6.05 percent (minimum: $1,000).

"Web banks offer tremendous value to those who are rate sensitive," says American Bankers Association spokesman John Hall. "But they don't offer some of the conveniences that other banks offer," such as ATMs, local branches, and tellers.

If you decide that Web-only bank rates are too good to pass up, be sure to ask about the bank's monthly fee policies on small accounts or ATM withdrawals.

(c) Copyright 1999. The Christian Science Publishing Society