Choosing a bank account is a big deal. After all, you hand over probably the largest part of your money to the institution for safekeeping. You want to make sure that it is actually safe.
You also need to be able to access this cash for all of your daily operations, such as: B. Pay bills or cough up your share of the pizza.
In addition to choosing from multiple financial institutions, banking means another important decision in 2019 and beyond: will you use one of the many all-digital online banking options, or keep the old school by opening an account with Brick-and-Mortar Plant ?
Which bank you use is more important than you might think. Find out where to keep your money (and more!) In The Penny Hoarder Daily.
Are Online Banks Safe?
In a recent survey by The Penny Hoarder, over 50% of respondents said they would not consider an online bank, and over 19% were unsure whether to use one. Given how much of our life is online these days, we found this data point surprising.
On the other hand, we know how to have reservations when it comes to money. Stepping into a stately brick bank can make handing over your hard-earned cash less scary.
So are online banks safe? The truth is that there are a growing number of online-only banking alternatives that are indeed legitimate and safe to use. Online banks like Chime and Simple, like Bank of America and Chase, are FDIC insured for deposits up to $ 250,000.
And thanks to the magic of technology, you can use your money to do pretty much anything you need without ever having to visit a cashier in person: deposit checks on your cellphone, withdraw cash from a network ATM, or transfer money to a family member or Friend. You can even write checks … if you really have to.
However, it is true that you cannot go to a bank and speak to a cashier in person. What are the other important differences between these two banking methods?
Brick-and-mortar banking: pros and cons
Since almost 72% of our survey participants stated that they had visited a stationary bank in the past year, we would like to give this option their justification. Here are the cons and advantages of patronizing and old school banking – the way you can go to open your account.
Traditional banking professionals
Larger banks may offer one-stop shopping for your financial needs: they often make it easy to take out a mortgage, open a credit card, or apply for a personal loan with the same institution that you use to bank. (However, these products may incur higher fees than you would find when shopping for independent lenders.)
Some users just find it easier to go to a bank and ask about the service they need. This may be a better option for you if you don’t want to find out how to get what you need through an online banking portal or app.
Depending on the bank you choose, you may be supporting a local (or local) company, or at least a nationwide company that offers jobs in your area. Credit unions, in particular, are often community-focused institutions that attend local events and provide friendly, personal customer service to account holders.
Traditional banking cons
Depending on the bank you choose, you may only be able to access your bank locally. This can create problems for those traveling or at some point planning to move out of the state.
Large banks often have higher account management fees and other related costs. After all, they need to keep the lights on in a personal banking facility. Additionally, the amount you can earn from interest-accumulating savings and checking accounts can be less than what you get from a digital-only bank.
You probably already do most of your banking online. In fact, over half of our survey respondents said they do most of their banking online or through a mobile app. And with a personal bank, especially a small or local bank, the online banking portal or mobile app isn’t quite as fancy as the technical tools you find at a bank where those tools are the primary way to access Interact with your money.
FROM THE BANKING FORUM
Synchrony bank8 / 19/20 @ 12:19 PM
File for Bankruptcy 8/22/20 @ 8:29 PM
Chime Bank / Bancorp7 / 23/20 @ 9:32 AM
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Advantages and disadvantages of online banking
So what about exclusively digital banks? What incentives can they offer to offset the downside of not having a physical location – and what other downsides are there?
Online banking professionals
Because they don’t have as much overhead as banks with physical facilities, online banks often offer lower-cost banking options. Many have no monthly maintenance fees or credit requirements.
With an online bank, your money goes anywhere. You are not tied to the physical location where your bank has branches. Many online banks allow you to access your cash through a toll-free network of ATMs that extends not only across the country but also overseas. You always have access to the tools available on your computer and smartphone.
Some online banks and alternatives offer other financial products, such as mortgages and student loan refinancing. For example, check out Ally and SoFi, which also have investment products, educational resources, and more.
Many online banks offer a number of digital tools that you can use to take control of your finances. These include built-in budget trackers, automatic savings, and integration with popular third-party apps like PayPal or Venmo. While stationary banks also use and supplement these extras, fully digital banks usually have the edge when it comes to such future-oriented extras.
Online banking only disadvantages
No personal banking option. If you’re tuned in your way and don’t have to go through the learning curve figuring out the tools of a digital bank, a stationary bank might be easier. (That said, even large chains will install souped-up ATMs and route much of the queue to the machine instead of letting them interact with cashiers, so in the end, you might not have a choice!)
What should be considered when looking for a bank account?
Regardless of which type of banking option appeals to you best, keep in mind that not all banks are created equal, whether they live in real space or cyberspace. It is important that you do a thorough research of all the features and policies of your potential bank account before signing the paperwork.
Are you looking for a new home for your money? Check out our reviews of the best checking and savings accounts on the market today.
Jamie Cattanach’s work has been featured at Fodor, Yahoo, SELF, The Huffington Post, The Motley Fool, and other outlets. Learn more at www.jamiecattanach.com.