Are you considering switching to an online bank? Many people are, often drawn in by the lower fees and higher interest rates offered for the deposit accounts held at these banks. While the deals are attractive, some people are worried that an online bank may not be able to meet all of their banking needs. Here are some easy ways to tell if you are ready to switch to an online bank.
You Rarely Make Cash Deposits
With direct deposit and online account transfers so prevalent today, many people no longer need to make cash deposits at their local bank. Even if you need to deposit a check into a bank account, online banks offer the ability to deposit checks remotely through a smartphone app. To use the money that has been deposited, you use a debit card linked to the account or withdraw cash from an ATM, which will make the money subject to withdrawal fees.
You Rarely Use Bank Tellers
If you cannot remember the last time that you talked to a bank teller, then online banking may be right for you. Many people are used to obtaining the money that they need using checks, debit cards, or ATMs, eliminating the need to use a bank teller at a physical branch. If you are not using the services, why should you continue to pay for maintaining them through higher banking fees for your accounts?
You Are Tired Of Monthly Fees
In the past decade, the fee-free bank accounts that we used to enjoy have given way to accounts that charge significant monthly fees if the minimum requirements for the account are not met. Depending on the type of account used, there may be a minimum amount that must remain in the account, a maximum number of withdrawals each month, or a minimum number of times you must use the debit card connected to the account. Most online banks offer checking accounts that have no monthly fees, which means customers don’t have to worry about direct deposits or minimum balances on their accounts.
You Want A Better Interest Rate
The interest rates for savings accounts at many traditional banks are at record lows, making it difficult for you to grow your money at a faster rate than inflation. In contrast, many banks that operate solely online offer highly competitive deposit rates for multiple types of deposit accounts, including interest checking, money market, savings or certificate of deposit accounts. The main reason why these banks can offer such attractive rates is that a lack of physical branches means lower overhead for the bank, so they can still make a profit while costing their customers less.