Internet banks have been around for than a decade now, and yet, they’re still a very small part of the banking business. But they seem to be drawing more interest from customers these days (excuse the pun), and the reason is simple: Because they have lower overhead, many virtual banks offer better rates than brick and mortar banks.

For example, according to Bankrate.com, the average rate on a 1-year Certificate of Deposit is 4.81 percent. Look at what a 1 year certificate is yielding at these online banks: ING Direct 5.25 percent APY, Bank of Internet 5.42 percent APY, and Virtual Bank 5.45 percent APY.

Bankrate.com says the nationwide average yield for a money market account this week is 3.10 percent. Here's how what you can get at some online banks. At Virtual Bank, their e-money market account is paying 4.60 percent APY. Money market accounts at HSBC Direct and Emigrant Direct yield 4.65 percent.

A bank without branches does have its limitations – no ATMs or safe deposit boxes. You can’t drop off a deposit; you have to mail it in. Of course, paychecks can be sent in via direct deposit.

Clearly, online banking is not for everyone. Cyber banks tend to be best for people who have money they want to park for a while.

Before giving any money to any online bank, check to see that it is FDIC insured. You can do that by going to the FDIC Web site at www.fdic.gov

Make sure you know the easiest way to withdraw your money. Usually that's to have it directly transferred to a regular checking account.

You also want to find out how you can get some money quickly if you need it. Normally you can go to any ATM machine and make a withdrawal. Some online banks will pick up the service charge, if any. Be sure to find out about that.

Banking online still makes a lot of people nervous. The industry is aware of that and working on better security, whether it's longer passwords or having a customer use something other than a password to prove who they area.

So would I bank online? I already do.

For More Information:

Online Banking

What is Online Banking?

Security Worries Slow Online Banking Growth