It’s been a while since I’ve written about the best online bank accounts. Usually when I cover online banks, I’m focused on their interest rates, such as in this constantly-updated list of which online high-yield savings accounts are best.

But interest rates have been low for nearly three years now, and there’s not much difference between earning 1.11% on your savings at one bank and 1.09% at another. In an environment like this, how do you decide which online bank to use? That’s what Jennifer wants to know. She wrote looking for the best online bank accounts for service and security. Here’s her question:

I have a question about the pros and cons of online banks. I’ve read horrifying reviews from customers who have had problems accessing their money, with transfers, and with identity theft when using this type of account. I’ve been considering opening an online account to get a higher rate on my emergency fund, but each time I get close, I see another bad review and get scared away.

Have you (and other GRS readers) had bad experiences with online banking? Which online banks have people had success with?

Jennifer’s question is tough for one person to answer. Though I can crawl the web looking for the best high-interest savings accounts (or partner with Money Rates to do the work for me), there’s no easy way for me to test the service and security of every online bank. (Trent at The Simple Dollar once decided to make a project out of testing and reviewing online banks. That lasted just a single month!)

Reminder

Online banks offer the same sorts of products and services as traditional banks, but online banks don’t have storefronts, so you can’t walk in and talk to a teller. You have to make all of your transactions online, by phone, or via snailmail. But for many people, these aren’t drawbacks — they’re advantages.

Some folks are worried about online financial transactions of any sort. But the July 2009 issue of Consumer Reports Money Adviser cites research predicting that three-quarters of American households with internet access will bank online by the end of this year. And Money Adviser claims that online banking may actually be safer than traditional banking because there’s less of a paper trail and your transactions are digitally encrypted.

There are sites out there that allow customers to review varios online banks, but I think their methodology is flawed. Who’s going to seek out a place to review an online bank when they’re happy with the service? Instead, you mostly get folks who are disgruntled for various reasons. (And reading some of the reviews, it sounds like the problem is often with the customer, not the bank!)

So, if a single blogger can’t survey all of the online banks for safety and security, and if the review sites aren’t really that effective either, what’s left? Well, this sounds like a job for crowdsourcing. What one man can’t answer alone, maybe many people can!

Leaving interest rates aside for a moment, please share your experiences with online banking. From your experience, which is the best online bank for service and security? Which banks are not so good?

I realize this survey is completely unscientific — and that most of us will have tried only one online bank — but maybe our personal anecdotes can help paint a picture of which online banks offer the best safety and security. Maybe we can help Jennifer (and others like her) enter the brave new world of internet banking!

This article is about Ask the Readers, Savings