3 Little-Known Perks of Online Banks

A few weeks ago, I helped a friend switch from her old-school bank (she'd been with them for over 30 years) to a modern online bank.

Now, instead of earning $4 a year in interest on her account balance, she now earns $4 PER DAY. Not kidding.

High APYs are one thing. But what most people don't realize is how many other perks come with online banks. Here are three I love.

1. Low or no fees

Most traditional banks still charge monthly maintenance fees, overdraft fees, minimum balance fees -- you name it.

And while some waive those fees if you jump through hoops, online banks usually just… don't charge them at all.

Personally, I haven't paid a single banking fee in over a decade.

That's because online banks are built differently. They don't have to maintain physical branches, so they pass those savings onto you and me in the form of free checking and high-yield savings accounts (HYSAs).

Here's a quick look at common fees you can dodge by going digital:

• Monthly maintenance fees: $0
• Overdraft fees: Many online banks offer free overdraft protection
• ATM fees: Reimbursed or free through large ATM networks
• Minimum balance fees: Often none

And that's not even including the higher APYs. Some online savings accounts are paying over 4.00% APY, compared to the national average of just 0.38%.

2. Big ATM networks

The biggest question I get regarding online banks is: But what if I need cash?

Totally fair. But here's the thing -- even though online banks typically have no physical branches, they partner with huge ATM networks like Allpoint or MoneyPass.

This means you get free access to 55,000+ ATMs nationwide. Funny thing is, that's often more than some traditional big banks offer.

And if you happen to use an out-of-network ATM, some banks like Ally and Axos will reimburse you for the fees -- automatically.

3. Built-in tools (that are actually helpful)

Online banks were born in the app generation. Which means their tech is actually good.

Not only can you set up an account in five to 10 minutes via a mobile app, but you can also manage most of your everyday banking with a few clicks or taps.

Need to transfer money to a friend quickly? Deposit a random paper check? Check your credit score? No worries! These features used to be "premium" at legacy banks. Now they're baked into most online accounts.

Pro tip: Some online banks also have built-in budgeting tools to help you allocate spending and track transactions.

Switch banks already!

The old banking system isn't broken… but it's definitely outdated.

Truth be told, I use two banks. I keep my traditional bank around with a little bit of money in it. But I've pretty much moved all my daily banking over to a fintech bank.

I pay no fees, earn a killer APY, and have all the modern conveniences at my fingertips.

If you've been thinking about making the switch, now's the time. With interest rates still hovering around 4.00% APY and tons of fee-free options, there's never been a better moment to go digital.

Explore the top online banks here and make your money work harder.