Bank of Internet USA Review – Full-Service Online Banking

Bank of Internet USA (often referred to simply as “BoI” or “BofI”) is an online-only bank that offers a variety of deposit accounts and credit products for consumers and businesses. As is usually the case for U.S.-based deposit institutions, funds held in BoI’s checking, savings, money market, and CD accounts are covered by FDIC insurance, up to $250,000 per account.

BoI has a number of notable features, including an attractive Rewards Checking Account that can yield up to 1.25% and a full suite of business banking resources, which often aren’t available at consumer-facing online banks. BoI also offers real estate loans, including purchase loans, refinancing loans, home equity lines of credit, and multifamily mortgages (which are ideal for landlords).

Taken together, all these accounts and credit options make BoI a plausible one-stop shop for your banking and borrowing needs. However, if you’re not willing to put all your eggs in BoI’s basket and you want to use it solely for day-to-day banking, that’s fine too – when used frequently, Rewards Checking is one of the better online checking accounts available.

BoI has some other perks worth noting. All deposit accounts come with free, automatic enrollment in FinanceWorks, a Quicken-backed money management tool. FinanceWorks is similar to Mint in that it shows all your deposit accounts in one place, allows you to customize a budget, categorizes spending in budget categories, and identifies ways for you to save.

BoI’s checking accounts also sync with Popmoney, a third-party app that lets you send and receive payments. While some online banks (notably Ally Bank, one of the country’s most popular) charge for some Popmoney transactions, sending and receiving via Popmoney is always free for BoI customers.

Rewards Checking is BoI’s signature deposit account. It requires a $100 minimum deposit to open, with no minimum balance thereafter, and doesn’t require a monthly maintenance fee. You get a free Visa debit card and 50 personal checks upon opening.

Rewards Checking also includes access to Purchase Rewards, a BoI-administered shopping portal (similar to Chase Ultimate Rewards) that features exclusive discounts and cash back offers on select purchases.

Though Rewards Checking doesn’t automatically pay interest, it does come with a tiered yield system. Taking certain actions in a given statement period boosts your account’s APY by 0.4166% per action for the duration of that period, up to a maximum possible yield of 1.25% on balances less than $150,000. The three actions that can accomplish this are:

Note that using your debit card 15 or more times per month automatically boosts your yield to 0.8333% for that month, since you’d necessarily have met the 10-transaction threshold.

If you opt into BoI’s overdraft protection plan, you never pay a fee when you overdraft on your Rewards Checking account. On all other accounts, overdraft fees are $25 per transaction, up to $75 per day.

BoI’s Platinum Checking account yields 0.71% on balances above $5,000, requires a minimum deposit of $500, and reimburses third-party ATM fees up to $8 per month, regardless of how many transactions it takes to reach that level. This account also comes with a free Visa debit card, 50 free personal checks, and access to BoI’s Purchase Rewards program. Purchase Rewards is a proprietary online shopping portal that offers BoI customers access to shopping discounts and deals at retailers such as Sears and Kmart.

The CashBack Checking account earns a baseline of 0.5% cash back on all debit card transactions. If you maintain a minimum daily balance of $1,500, all debit card transactions earn 1% cash back, up to a maximum of $2,000 cash back per month.

This account does not have a balance requirement, nor does it charge a monthly maintenance fee. It also boasts unlimited check-writing privileges and unlimited ATM fee reimbursements.

The Essential Checking account doesn’t have a rewards program, but its lack of monthly maintenance fees and NSF fees is compelling for budget-conscious depositors. Account holders are eligible for unlimited ATM reimbursements, as well.

The Golden Checking account has no monthly maintenance fee, but it does charge NSF and overdraft fees. As long as your account remains open and in good standing, you’ll get a free order of 50 checks every 6 months, plus ATM fee reimbursements up to $8 per month. The yield is 0.20% APY on all balances.

As the name suggests, this product is marketed as an entry-level checking account for teens new to the wide world of money management. Structured as a joint account with an adult parent or guardian serving as custodian, it has no minimums or monthly maintenance fees and yields 0.25% APY on all balances. Daily transaction limits are $100 for cash withdrawals and $500 for all transactions. There are no overdraft or NSF fees, and ATM fees are reimbursed up to $12 per month.

This account yields 1.30% APY on all balances, requires a minimum deposit of $100 (though no minimum balance thereafter), and never charges a monthly maintenance fee. You can request a free ATM card, though BoI doesn’t reimburse ATM withdrawals from your savings account. By law, you’re limited to 6 withdrawals per statement cycle, with each withdrawal above the limit incurring a $10 fee.

BoI’s Money Market account yields 1.05% APY on all balances. Like the Smart Savings account, it requires a minimum deposit of $100, but doesn’t require a minimum balance thereafter or charge a monthly maintenance fee. You also get a free Visa debit card, 50 free personal checks, and free billpay – but, as with other savings-type accounts, you’re not permitted to make more than 6 withdrawals per month. Each withdrawal above the 6-per-month limit incurs a $10 fee.

BoI offers CDs with terms ranging from 3 months to 5 years (60 months). All require a $1,000 minimum opening deposit. Yields range from 0.55% APY on the three-month CD to 2.25% APY on the 60-month CD, rising proportionately with term. Early withdrawal penalties range from 45 days’ interest for the 3-month CD, to 24 months’ interest for CDs with terms longer than 48 months.

Through Bank of Internet Federal, an affiliate, BoI offers a full lineup of business deposit accounts, including several different checking accounts, a money market account, multiple CDs, and CDARS (Certificate of Deposit Account Registry Service, a special product that provides account holders with FDIC insurance on balances up to $50 million). Rates on interest-bearing accounts are customized based on deposit amounts and the business’s needs – you have to call or email BoI’s sales team for a quote.

BoI offers special savings accounts and CDs that can be structured as either Roth or traditional IRAs.

The savings account yields 0.15% APY on all balances up to $1,000 and 0.70% APY on balances above that threshold. A $250 minimum opening deposit is required here.

IRA CDs are available with terms of 12 months (0.60% APY), 18 months (0.70% APY), or 36 months (0.75% APY), all of which require a $1,000 minimum opening deposit.

BoI offers several different types of real estate credit products, including purchase loans, refinancing loans, and home equity loans and lines of credit. Loan APRs vary with prevailing interest rates, but they’re broadly competitive with the market. Also of note: as a Costco Preferred Lender, BoI offers special real estate loan rates to the warehouse club‘s members. The exact rates (and discounts to nonmember rates) depend on each borrower’s credit profile, loan size, and location.

BoI offers mortgage loans for multifamily and mixed-use (residential and commercial in the same building) properties through Apartment Bank, an aptly named subsidiary. Such loans are ideal if you’re a professional landlord or property manager looking to add to your portfolio. Loan amounts start as low as $250,000 and range up to $10 million or more.

BoI offers auto loan refinance loans starting at 4.04% APR for refinance amounts ranging from $10,000 to $90,000. There’s no payment due for 90 days from origination and no prepayment penalty. Auto loan refinance customers automatically qualify for a free checking account that earns up to 1.25% cash back on purchases.

BoI lets you deposit checks into consumer and business checking, savings, and money market accounts – though not CDs, as they don’t accept deposits once opened – from your mobile device or computer. To make deposits, you simply need to take a picture of the check and upload it through BoI’s secure platform.

Bank of Internet USA has Android- and iOS-compatible mobile apps that include all important online banking capabilities and most of the functionality of the company’s desktop website. If you plan on doing much banking from a mobile device, be sure to download the app, as BoI’s parent site isn’t particularly mobile-friendly.

BoI has a detailed FAQ section, an email support account (which typically produces prompt responses), and live phone support that’s available 6am to 6pm Pacific Standard Time, Monday through Friday. Phone wait times are usually minimal, though mid-days and late afternoons can be busier.

1. Rewards Checking Is a Great Primary Checking Account Option
Rewards Checking has a lot going for it: no minimum balance or maintenance fee, access to BoI’s Purchase Rewards program, potential yields of 1.25% APY, and no overdraft fees. With so many perks, it’s definitely a great primary checking account option. While there are plenty of other checking accounts with attractive yields, including at Ally Bank, TIAA Bank, and Capital One 360, none of them offer all these features in the same account.

2. Solid Mobile Functionality and Convenience
Between a mobile app that can handle virtually all banking functions and a mobile check deposit feature that makes it easy to deposit physical checks on the go, BoI has an above-average mobile experience. Contrast its functionality with BankDirect’s, which doesn’t even have a mobile app, or FNBO Direct, which doesn’t offer mobile check deposit.

3. Comprehensive Options for Business Customers
If you own a small or medium-sized business, or are responsible for your employer’s banking decisions, BoI is definitely worth a close look. Bank of Internet Federal, its business banking affiliate, has multiple checking account, CD, and CDARS options, as well as a money market account. Many other consumer-facing online banks, including FNBO Direct, don’t have anything to offer businesses.

4. Excellent Options for Real Estate Borrowers
BoI also has a full suite of real estate financing options. Whether you’re buying a fixer-upper house or refinancing your primary residence, or are investing in a rental property, BoI’s Apartment Bank affiliate can probably help. Even some popular online banks, such as Ally Bank, don’t offer mortgage loans.

5. Solid Returns on CashBack Checking
BoI’s CashBack Checking account offers solid returns on spending: 0.5% back on eligible purchases when your balance is below $1,500, and 1% back on eligible purchases when your balance exceeds $1,500. The latter rate is industry standard in the cash back credit card realm, sans the underwriting requirements.

1. Mediocre Yields on IRA CDs
While they’re not the worst in the business, BoI’s IRA CDs don’t have eye-popping yields – 0.60% APY to 0.75% APY, depending on term. Many of the bank’s competitors significantly outdo it in this regard. For example, Ally Bank and Synchrony Bank both offer IRA CDs with similar term lengths and yields anywhere from 0.50% to more than 1% better than BoI’s.

2. Customer Service Isn’t Available Nights or Weekends
Though BoI’s customer service team is reachable by phone for a 12-hour stretch on weekdays, it’s not available overnight or on weekends. If you have an issue that requires human attention, you could end up waiting a day or two for it to be addressed. Other banks with similarly comprehensive offerings, including Ally Bank and Capital One 360, have live, 24-7 customer support.

3. Savings Account Yields Could Be Better
BoI’s savings account yields 1.30% APY, which isn’t terrible. However, it doesn’t stack up to similarly flexible accounts such as Ally’s High-Yield Savings Account, which doesn’t require a minimum balance or a maintenance fee, and yields 0.99%.

Slogging through dozens of account disclosures and rate charts in search of the ideal checking account is not my idea of a good time. While I’m not sure I’ll ever find perfect consumer checking, BoI’s Rewards Checking account definitely has me rethinking my current banking arrangement.

If you’re willing to invest the time, energy, and money necessary to manage a presence with multiple banks, Rewards Checking should be a top contender – even if you choose to keep your savings elsewhere. When it comes to online banking, no one says you can’t play the field.

Do you have a Bank of Internet USA account?

Updated: August 9, 2018

Bank of Internet USA’s standout product is definitely Rewards Checking, a superior primary checking account choice for anyone who’s interested in earning high checking yields, pocketing cash back rewards, and avoiding overdraft fees. With a full suite of business and real estate options, not to mention value-added perks like personal finance software and free money transfers, BoI is a legitimate one-stop banking shop.

That said, mediocre rates on savings and CDs may drive yield-seeking savers to greener pastures.

If used to its full potential, Rewards Checking is excellent. Business accounts, real estate loans, and personal finance software help too.

Iffy yields on some key accounts hurt, as does spotty customer service.

Overall, though, BoI is among the most comprehensive and consumer-friendly online banks operating today.

Categories: Banking, Money Management, Reviews

Brian Martucci writes about frugal living, entrepreneurship, and innovative ideas. When he’s not interviewing small business owners or investigating time- and money-saving strategies for Money Crashers readers, he’s probably out exploring a new trail or sampling a novel cuisine. Find him on Twitter @Brian_Martucci.

Comments Disclosure: The below responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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