Online Bank Accounts? Are they suitable for you?
I know you know about online savings accounts because I wrote about them in my emergency savings account post.
Did you know online checking accounts are an option, too?
Benefits of Online Bank Accounts
There are a lot of benefits of online accounts, both for checking and savings.
- Lower fees (sometimes no fees at all)
- Lower or no minimum balance requirements
- Easy access to your account through apps and the internet
- Free or discounted online bill pay services
- User-friendly interfaces make it easy to access multiple accounts
- Compatibility with budgeting apps like Mint or Cleo
- More accessible deposits via direct deposits or deposits by a picture (checks only)
- Some online providers boast that they process direct deposits quicker so you can get paid earlier
You may be skeptical that all the institutions providing online checking or savings accounts are sketchy or suspicious, but the truth is the opposite.
Of course, there are some scams out there, but you can go with a trusted name like Bank of America, US Bank, Regions, etc.
Just make sure the FDIC ensures the bank. It protects your deposits up to $250,000. However, insurance is not a law, so not all banks carry protection.
Drawbacks
The negatives of online banking mean that they are not for everyone.
- Some online banks don’t have branches, so you can’t drop off a cash deposit.
- Customer service can be hit or miss depending on what bank you choose.
- You will need to ask about ATM access in your area. If you go with a big-name bank, they will probably have ATMs you can use for free, but online-only institutions may only let you use certain banks without incurring charges from either bank.
- And in general online accounts may have more limited services than a bank with a local branch.
Are you considering an online account? Let me know in the comments below!
