First Internet Bank Review: Pros, Cons, & Alternatives

Written by Justin EstesUpdated: 29th Sep 2021
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Online banking is so common today, and it’s hard to imagine a time when brick and mortar was the online option.

However, online banking didn’t always exist. When First Internet Bank launched in 1999, it became the first FDIC-insured online bank on the market.

While online bankshave long since 1999, First Internet Bank continues to adapt and remain relevant. As a full-service bank, they offer checking accounts, savings accounts, loans, and more.

Today we will discuss what First Internet Bank offers, how it compares to the competition, and ultimately help you decide if they are a good fit for you and your personal finances.

What Is the First Internet Bank?

Operating in all 50 states, First Internet Bank is a fully online bank that offers all the banking services you will need.

With an A+ rating from the Better Business Bureau since 2013, you can trust that First Internet Bank is a notable option when looking for a new bank.

Despite having no physical branches, First Internet Bank still provides great customer service and many other benefits.

What Does the First Internet Bank of Indiana Offer?

When banking with First Internet Bank, you will be able to utilize their variety of different accounts.

They offer checking, savings, money market accounts, and even CDs, which offer some of the best interest rates available.

First Internet Bank Banking Products

First Internet Bank is a great online-only financial institution because it offers a host of deposit accounts, loan options, and business solutions.

Let’s dive into some of their most popular account options to see how they operate:

First Internet Bank Checking Accounts

When using First Internet Bank, you are able to utilize their various checking accounts. Because of the numerous options, many people have found First Internet Bank to fit their needs.

If you overdraft your checking account, you may need to pay an overdraft fee; however, you can elect to set up overdraft protection if you link a First Internet Bank savings account.

If you overdraft your account, the overdraft protection will move $50 from your savings to your checking.

But be sure to do this less than six times a month; otherwise, you will pay an excessive withdrawal fee.

>> More: Compare the Best Checking Accounts

Interest Checking

With this account, if you keep an average daily balance of at least $500, you will receive an APY of 0.30%.

Your Interest Checking account offers unlimited check writing, and the first order of your checks is free.

Although this account does have a $10 monthly maintenance fee, it can be avoided if you maintain an average daily balance of at least $500.

You need a $100 minimum deposit to open this account, and you will also receive a Visa Debit Card.

Free Checking

Although this account does not require a monthly maintenance fee, it will not pay you any interest.

To open a bank account, you need a minimum $25 deposit, and it comes with a Visa Debit card.

With this account, you get unlimited check writing, and the first order of checks is free. You also get free Online and Mobile Banking, as well as Bill Payment.

First Internet Bank Personal Savings Account

First Internet Bank offers two savings accounts, including a Regular Savings account and a Free Savings Account. Depending on your personal needs will help you decide which option is right for you.

With First Internet Bank’s Free Savings account, you are not required to pay a monthly maintenance fee or maintain a minimum daily balance.

However, you are required to make a $25 opening deposit. There is a .25% APY on all of your balances.

Another perk of this account is the free ATM card. You are limited to six free withdrawals every statement cycle, and any excess withdrawals will be charged $5.

Their Regular Savings account is a bit more expensive. However, it has a higher APY. There is an opening deposit of $100, but it yields 0.50% APY instead of the Free Saving’s 0.25% APY.

There is a $2 monthly fee, but this is waived if you keep a $1,000 minimum balance. Like the Free Savings account, you are given a free ATM card with six free withdrawals per statement cycle. Any out-of-network surcharges are reimbursed up to $10 per month.

Overall, if you have more money available to you, the Regular Savings accounts will reward you with higher interest over time because of the higher APY.

However, the Free Savings account provides a cheaper alternative while also offering similar benefits.

>> More: Best High Yield Savings Accounts

Money Market Account

To set up a Money Market Account, you need an opening $100 deposit. Any balance under $250,000 will yield a 0.50% APY.

It is important to note that the FDIC only covers that first $250,000, so anything past that will have no federal backing.

There is a $5 monthly maintenance fee, which can be avoided with a minimum account balance of $4,000.

Similar to the Free Savings Account, you are given a free ATM card with six free withdrawals per statement cycle. You are reimbursed for out-of-network charges up to $10.

First Internet Bank CD Rates

First Internet Bank offers 8 CDs ranging from 3 months (0.25% APY) to 60 months (0.96% APY). All of these require a minimum $1,000 opening deposit.

If you decide to open a CD, make sure you are comfortable leaving your money in the account for the duration of the term; otherwise, you may have to pay an early withdrawal penalty.

>> More: What Is a CD?

Accounts for Kids

First Internet Bank provides savings accounts specifically for those under the age of 18. To open the account, there is a required minimum $100 deposit.

There are no limits to how many deposits you can make; however, you are limited to only six withdrawals per monthly statement cycle.

The account pays a 0.25% APY and has no monthly maintenance fee. When the child becomes 18 years old, their account will automatically change to a Regular Savings account.

First Internet Bank Lending Services

  • Personal Loans: First Internet Bank provides its customers with unsecured personal loans, with rates starting at 10.99% APR.
  • Student Loans: First IB offers financing for undergraduate and graduate tuition, as well as room and board and other supplies. APRs will depend on the borrower’s school, location, amount of money borrowed, and credit.
  • Auto Loans: First Internet Bank starts its auto loans rates at 3.50% APR while also providing loans for special vehicles like RVs, motorcycles, and boats, with rates beginning at 5% APR.
  • Mortgages: Customers can finance a home purchase and take out home equity lines of credit.
  • VA Loans: VA loans offer favorable interest rates to veterans and are available to customers of First Internet Bank.
  • Mortgage Refinancing: In addition to issuing new mortgages, First Internet Bank offers refinancing options for customers who want to lower their interest rate or monthly payment.

First Internet Bank Pros and Cons

Pros:

  • It is available in all 50 states
  • Almost no fees
  • Good interest rates
  • Full-service online bank
  • Provides business banking
  • Wide ATM network

Cons:

  • Low interest rates on saving accounts
  • No in-person bank branches
  • Monthly maintenance fees
  • No peer-to-peer payment options

How Does First Internet Bank of Indiana Compare to Other Banks?

The financial services industry has come a long way since 1999, and First Internet Bank has amassed many competitors over the last two decades. Let’s see how they compare to other banks and how they set themselves apart:

#1. First Internet Bank vs. Chime Bank

Like First Internet Bank, Chime Bank is a fully online financial company partnered with two banks to provide its checking and savings accounts.

Chime is FDIC insured and has no overdraft or monthly fees. Chime also allows you to round purchases up to the next dollar and lets you save the remaining money.

Although both of these are online-only banks, Chime is best for customers who only need the essentials from their banks, such as a checking and savings account.

Customers who want access to financing, mortgages, and loan management will do better with First Internet Bank because they have a much more robust suite of services.

>> More:Chime Bank Review

#2. First Internet Bank vs. CIT Bank

CIT Bankis another completely online alternative to physical banks. They provide various perks, including money market savings accounts, checking accounts, and high yield saving opportunities.

With CIT, there are no monthly maintenance fees, and they offer pretty good interest rates. However, unlike First Internet Bank, there is no free ATM network.

>> More:CIT Bank Review

#3. Axos Bank vs. First Internet Bank of Indiana

Axos Bank is another online-only service that has minimal fees and a good checking account. As an online-only company, they have 24/7 customer service that includes a phone line, online chatting, and secure Twitter messaging.

Axos offers high-yield checking and savings accounts and unlimited ATM fee reimbursements.

>> More:Axos Bank Review

#4. Chase Bank vs. First Internet Bank of Indiana

Unlike First Online Bank, Chase Bank is not an online-only financial company. As the largest bank in America, Chase Bank provides a wide range of features.

It offers auto loans, mortgages, and a large selection of credit cards. Chase has a good standard checking account, but Chase’s sign-up bonuses are one of the best in the industry.

Chase Bank is a solid option for those who want numerous branches and ATMs and looking for decent rates.

Frequently Asked Questions

Is First Internet Bank of Indiana FDIC Insured?

Yes – FIB is FDIC insured, which means up to $250,000 is federally protected per depositor.

Is First Internet Bank a Good Bank?

First Internet Bank holds the distinction of being the very first FDIC-insured online bank. Since 1999 First Internet Bank has offered excellent customer service and a large suite of services to its customers.

It is a great choice for consumers who want accessible online accounts and an all-in-one financing solution for large purchases.

Does First Internet Bank of Indiana Have Credit Cards?

Yes – First IB offers two credit cards. They have CONNECT Classic, which has a regular APR of 16.99%, and decent underwriting standards, making it a good option for those to build credit.

They also offer the Cashback Card, which has a regular APR of 12.99%, and a decent cash back rewards program.

They offer 3% cash back on eligible gas payments and 1% cash back on other permitted purchases. Neither of these credit cards has any annual fees.

Does First Internet Bank of Indiana Have Local Branches?

No – First IB is a completely online bank, so, unfortunately, there are no physical locations.

However, they offer great customer service, including a phone line that is active from 7 am to 9 pm on weekdays and 9 am to 3 pm on Saturday (Eastern Time).

Does First Internet Bank of Indiana offer Business Accounts?

Yes – First Internet Bank provides commercial and business banking options and lending options, and deposit accounts.

Bottom Line: First Internet Bank Review

First Internet Bank was a pioneer of online banking and continues to adapt and remain relevant today.

Many online banks followed in their footsteps and offered similar services based on First Internet Bank’s example.

However, if you are looking for travel credit cards or luxury rewards and perks, you may need to look elsewhere.

With various checking and savings accounts, financing opportunities, and even business banking, First Internet Bank has something for everyone.

Justin Estes
Justin Estes

Justin Estes is a Senior Personal Finance Writer who is a recognized small business accountant, consultant, and credit card expert. His background in accounting and finance led to a passion for helping people make the most of their money and matching them with financial products that enhance their lifestyle. Justin attended Charleston Southern University where he double-majored in Finance and Accounting. Justin’s areas of expertise are credit cards, small business finance, accounting, and taxes.