Should You Switch To An Online Bank Account?
It's no surprise that 80% of Americans would rather bank digitally than visit brick-and-mortar banks. Online banking is simple, fast, convenient, and can be done anywhere, anytime. Not only do you have several banking options at your fingertips, but online banks provide all, if not more, convenient resources than traditional banks. If you are new to the idea of taking your checking and savings account fully virtual, this guide will answer all of your questions and put your mind at ease.
Top 5 Benefits of Online Banking
Lower Fees: Online banks are able to offer little to no fees because generally, they don’t have to worry about maintaining hundreds of brick and mortar branches. Chime*, an award-winning financial app and debit card, offer overdraft protection up to $200 without fees on top of zero monthly, transaction, and foreign fees. *Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank N.A.; Members FDIC.
Better Interest Rates: Online banks typically have higher APY rates on its savings accounts, as well as select interest-earning checking accounts. According to Investopedia, “The most generous of them offer as much as 1% to 2% more than you'll earn on accounts at a traditional bank.”This is a significant difference once you do the math. If you kept $10,000 in a traditional with a 0.01% APY, you would earn $1 on your savings during the year. Alternatively, keep that money saved in an online bank account that earns 3.85% APY, like at CIT Bank, you will earn $50.
Accessibility: Just because your online bank is technically in the cloud, it doesn’t mean you are going to have a harder time managing your money. In fact, most online banks are connected to ATM networks, so you can withdraw money from your account almost anywhere. Varo has no-fee ATM withdraws from over 55,000 Allpoint® ATMs, which are conveniently placed in stores like Walgreens, CVS, Target, and more.
Better Online Experience: While most traditional banks have online bill pay and mobile apps, online banks still dominate the fintech space. You can expect better online customer service and more online options. You can even contact your bank representative late at night or on the weekend.
Many Banking Products Offered: Some online banks stick with a variety of checking, savings, and money market accounts. Other banks like Capital One offer a suite of banking products to keep all your finances in one easy-to-manage spot. Capital One offers savings, checking, credit cards, and auto loans.