Why Switch To Online Banking?
Banking has changed over the years. Here's why you should think about going fully digital.
There are endless factors to consider when deciding how to manage your money, and there’s no shortage of confusing options in today’s market. What we know for sure is that more and more people are opting to do their banking online or with an app on their phone instead of at a branch.
Studies show that online and mobile banking have increased by about 30% since the start of COVID-19 shutdowns, and experts foresee those trends continuing into a post-pandemic future.
So if you haven’t already, why say goodbye to in-person, traditional bank accounts? CARD wants to help you make the most informed decision possible when it comes to your money. Here are a few tips, tricks, and reasons to consider the switch to an online bank account.
1. Same Security, Same Access to ATMs
Most online banking companies partner with reputable retail banks to insure your money with the FDIC, just like the traditional banks. When choosing an online bank account, double check the company’s online info for that FDIC affiliation and keep an eye out for cybersecurity claims (like encryption, two-factor authentication etc).
What about when you need cash? Typically, online-only banks partner with large ATM networks to provide access to surcharge-free ATMs in a variety of retail and bank locations.
With traditional banks, ATM locations are usually dependent on the number of brick-and-mortar locations set up in any given area. So despite what you might expect, online banks often have *more* ATMs in more convenient locations.
2. Banking For All
Banks are supposed to be places where we feel like our money is valued and safe. But between credit requirements, balance minimums, and hidden service fees it’s easy to feel like big banking institutions are taking advantage. The banking tides are changing, and even older generations seem to be increasing their use of online financial services.
Many online bank accounts do not require a credit check upon signup, because they aren’t offering credit cards. Most companies offer prepaid cards or debit cards and require only a government issued ID, proof of citizenship, and some contact information for signup.
By eliminating discriminatory vetting practices, accounts like these are helping to make banking accessible to people of all financial backgrounds.
3. Say Goodbye to Hidden Fees
When opening a new bank account it’s important to search the fine print for potential ATM, service, or minimum balance fees your provider could charge. Big banks tend to load up the fees on their lower tier accounts and waive them for customers who can afford to enroll in “preferred” groups, rewards programs, etc.
Leave hidden fees behind completely by switching to an online-only platform backed by a reputable bank. Unlike the traditional banks, online banks (or neobanks as they’re sometimes referred to) can afford to say goodbye to those types of fees.
Without the overhead operating costs of in-person branches, online-only banking platforms can afford to take less money out of your account, and provide you with better overall rates.
4. Why Not Use An App?
Within the last year, 76% percent of Americans have used a mobile banking app (according to a 2021 Forbes survey). So what is convincing customers to give up a visit to their local branch and whip out their phones instead?
For starters, we’re all maneuvering life in a late stage of this global pandemic. Depositing your check or managing your accounts from your phone screen is an easy way to help keep you and your loved ones safe and healthy.
We depend on our phones in our everyday lives for everything from food delivery to GPS navigation. Why not conveniently manage your money with an app?
Because the business model of online banking companies prioritizes digital experiences, they tend to put more of their resources into developing incredible banking apps.
Look for a company with an app that has features like mobile check deposits, automatic bill pay, and push notifications to keep you up to date on your money moves. Plus, with an app you have 24 hour access to important information like your transaction history and balances.
5. Customize Your Features
There are a ton of internet bank accounts out there. Research, research, research. Before you open a bank account online and give out your information, make sure you know which features are built into a provider’s offer and which are optional.
The beauty of online-only bank accounts is that they tend to let you customize with features like optional savings accounts and optional overdraft protection.
Say you’re trying to save up for that fun beach trip, but don’t feel like you need extra backup when it comes to overdrawing your account. Opt into the savings account and grow your money confidently without big bank overhead, and say no thank you to extra overdraft protection.
Whether you’re looking for bare-bones money storage or a suite of protective features, there is an online bank out there for you.
Follow these tips to keep from being overwhelmed by options, and get yourself up to date on what companies have to offer. Take inventory of your financial needs, do your research, and find the online banking platform that’s right for you!