On-line banks generally have well-developed, easy to navigate websites since they conduct all of their business over the internet. While traditional banks offer on-line banking and may have a good website, they generally pale in comparison to on-line banks. Like traditional banks, on-line banks carry FDIC insurance up to $250,000 per account.
One advantage that people seldom consider is that an on-line creates a barrier of sorts between your money used to pay everyday expenses and money for long term use. By having to work a bit harder to withdraw the funds, you may pause before making a withdrawal. Should you need to make a withdrawal, on-line banks allow for easy transfers to a checking account, generally within two business days with no fee. Many also offer an ATM card, but there may be a minimal fee to use the card.