Having access to a reliable bank for checking and savings accounts is very important. Over the past couple of decades, the traditional banking industry has been transformed and people now have the option of choosing between banks that have brick-and-mortar locations versus banks that purely operate online. There are various pros and cons of online banks that should be considered when determining which options are best for your situation.
There are various advantages of online banks to consider, which include the following:
One of the advantages of online banks today is that they tend to have lower fees and provide better interest rates than traditional banks. An online bank today will not have the same operating expenses as traditional banks as they will not have nearly as much real estate and staffing needs. This can save a considerable amount of money, which is often partially passed on to the customers through lower costs and higher interest rates.
Online banking is also a good option as you will receive many great security and convenience features. For example, those that use online banks often have complete flexibility when it comes to ATM usage. As opposed to only being able to use ATMs sponsored by their bank, customers can use any ATM in the world and often times will receive full fee reimbursement. Further, an online bank will have the same FDIC insurance and security features as traditional banks.
While there are plenty of advantages that can come with being a customer of an online bank, there are some disadvantages as well.
While you can complete basically any transaction that you want online using an online bank, there may come a time when you are having a challenge with your account and want to talk to a live person. With online banking, this is not often possible. However, many online financial institutions have dedicated customer service lines, online chat features, and other ways that you conveniently ask questions and have your concerns addressed.
One concern that anybody would have in the world today is the concern that data thieves will be able to access their online accounts. While there is always a risk of having an account hacked, online banks today have security protocols in place to protect customer data. Some of these protocols are required by the bank regulators. This can help to reduce the risk of someone gaining access to your account.
It is important that you have accounts with a financial institution that you can trust. As you are looking for accounts today, opening one with an online bank can be a great option as they offer a variety of advantages. It is important that you carefully consider the pros and cons of these online financial institutions to ensure you are making the best choice for your situation.