Personal banking just keeps getting more convenient. In the past, whenever you wanted to do anything with your bank account, you had to get in your car and drive to the bank – during office hours, of course. Or you had to call a 1-800 number and listen to endless options and prompts. Now, more and more of your personal banking can be done at home from your computer. We log on and check our account activity anytime we want. We read our statements online, schedule and make transfers, set up automatic bill payments, and order checks. Features are being added all the time, so the time we actually spend inside our banks is less and less.
When you think about it, do you even need to step foot inside your bank at all? Is it possible to just do everything online? Many people think it is, and they’re switching to online-only banks. Should you? Before you give up on traditional banking altogether and go online-only, consider some of these pros and cons.
Pros
Higher Interest Rates
Most people switch to online-only banks because the interest rates and annual percentage yields are almost always higher. Many online-only banks offer interest on your checking account, also, and many people are finding that the rates alone outweigh any disadvantages to online-only banking. That extra interest will add up very quickly, especially if you keep high balances.
Lower Fees
Because online-only banks don’t have nearly as much overhead costs as traditional institutions, they usually charge much lower fees. If you’re unhappy with the high cost of banking for you in a traditional bank, consider switching to online-only to save more of your money.
Free ATM Use
Many traditional banks are charging higher fees for using any ATMs they don’t own themselves. Most online-only banks will reimburse any ATM fees you pay, and they won’t charge you any fee on their end, either. You will need to check into the policy to find out how reimbursements are made and if there are restrictions on which ATMs qualify, but in general this can mean big savings for you.
Money Management
With online-only banking, it may be easier for you to manage your money, especially if you’re tech-inclined. Set up automatic transfers and bill payments, and you almost never have to think about your account. You can also view your activity and statements anytime, provided you have Internet access.
Cons
Deposits
Whenever you receive a check that needs depositing, you will have to mail it in, and this can be a hassle in itself. Then, you will need to wait a few days before the funds are available to you. If you can afford to wait and don’t mind using the post office, you’ll be fine with online-only.
Security Concerns
In truth, online-only banking is extremely secure and not very prone to phishing scams. Online-only banks do a lot to keep their websites safe, so you shouldn’t worry. But, if you’re the kind that will worry anyway, online-only banking might stress you out some.
Customer Service
Online-only banks are slightly lacking in the customer service department. It can be harder to reach a helpful representative immediately, and you miss out on the assurance that comes with speaking to someone face-to-face like you would in your traditional bank setting.
ATM Access
With online-only banks, ATM use can be a double-edged sword. Some banks do not reimburse for fees, but more commonly they restrict the types of ATMs you can use. If you need instant access to your money and don’t have an included ATM nearby, you will have to pay a few dollars per transaction.
Researched and written by Terry Ford from Grammarly grammar checker. Financial writing requires accuracy, to that end consider using a highly trusted tool such as Grammarly.
