Bank of Internet USA, one of the oldest pure online banks, is offering two competitive high-yield savings accounts offering 1.65% APY and 1.75% APY respectively.

The first offering, the Advantage Savings Account, offers a 1.65% APY interest rate and offers a free limited electronic bill payment service. The account allows you to make up to three online bill payments per month. The limit of three payments is likely due to federal regulations which prevent money market style accounts from writing more than 3 checks per month. The account is very similar to BofI’s second online offering, its original high-yield savings account, but has a slightly lower rate and offers the online bill pay service.

Bank of Internet’s second offering is its standard high-yield savings account that offers 1.75% APY, which is a very competitive rate in today’s market, but lacks the free online billpay service. To open either account, you need to make a $100 initial deposit, but after that there is no minimum balance required. There are no monthly maintenance fees and an ATM card is available. Interest is compounded daily and credited monthly. The initial funding can be done by an ACH transfer or by check. Both accounts allow for joint accounts, trust account and UTMA accounts. You can also choose multiple beneficiaries in the application.

The major downside of Bank of Internet’s two high-yield savings account offerings is that it does not offer an ACH electronic transfer service to its customers. This means that customers cannot make electronic transfers from their Bank of Internet accounts, but can initiate electronic transfers out of the account from other banks. For example, if you had an ING Direct Electric Orange checking account, you could link it to your Bank of Internet high-yield savings account and withdraw money out of your savings account into your Electric Orange checking account by initiating the transfer on ING Direct’s website.

Some have stated that the sign-up process to get a BofI high-yield savings account is that is they can be rather slow. This primarily is because you have to mail in a signed application before they will do the initial ACH transfer to fund the account. Some have stated it can take up to two weeks for the account application process to complete.

Bank of Internet has a 3-star “performing” rating from BankRate.com—this rate has been consistent over the last two years. Bauer Financial, another firm that rates the financial stability of banks, gives Bank of Internet a 4 star (excellent rating). Bank of Internet is an FDIC member.