3 Signs You Shouldn't Use an Online Bank

by Kailey Hagen | Updated July 17, 2021 - First published on July 3, 2021

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A person standing across from a teller at a bank counter and writing a check.

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Some people are just better off sticking with traditional brick-and-mortar banking.

When it comes to banks, the number of brick-and-mortar establishments keeps dwindling as online banks snap up their customers. While there's definitely a lot to love about online banks, from promises of no fees to a high annual percentage yield (APY), they're not a great option for everyone. Consider sticking by your brick-and-mortar bank if any of these scenarios apply to you.

1. You don't have a secure internet connection

If you live in the middle of nowhere without a secure internet connection, online banking probably isn't for you as it won't be easy to get online to pay bills or transfer funds around. And if you go with an online-only bank, there often isn't another way to access your money. So a brick-and-mortar bank is probably a better option for you.

You're also better off using a brick-and-mortar bank than trying to bank online using a public wifi network and running the risk of getting hacked. To avoid giving hackers access to your financial information, don't log into your online bank account on a public wifi network. Instead, stick with a private, password-protected internet connection. Or use your smartphone's mobile network rather than wifi.

2. You need to deposit cash or large checks often

Depositing cash into an online bank account isn't always possible, though a few online banks have networks that include ATMs that will take your deposit. Still, it's a bit more of a process to deposit cash this way, and you may not feel comfortable doing so if you're handling large sums.

Some banks also don't allow you to deposit checks over a certain amount via mobile deposit. If you receive a large check once in a while, depositing it in a brick-and-mortar account and transferring it to your online bank might not be a big deal. But doing this repeatedly could get tedious.

3. You prefer dealing with someone face to face

Online banks have fewer fees and better rates in large part because they don't have to pay to operate a large branch network. But the unfortunate side effect is that it's not easy to get live help when you need it. And when you do talk to someone, it's usually over the phone or live chat, and you never get to speak to the same person twice.

Some people are fine with this form of communication, as they rarely deal with their banker anyway. But if you prefer to work with someone who knows your name, a brick-and-mortar bank can offer this.

How to choose the right brick-and-mortar bank for you

If an online bank isn't a fit, there's nothing wrong with going with a brick-and-mortar institution. But brick-and-mortar bank accounts tend to carry higher fees and lower APYs, so you should research them carefully.

Start by looking at which banks operate in your area. You probably don't want to drive an hour to deposit your cash or paper checks, so look for ones that have branches within a reasonable distance.

Then compare the fees, balance requirements, and APYs on their deposit accounts to decide which one best suits you. If you're stuck, see if one of them offers relationship benefits, like higher APYs for opening multiple accounts with the bank or lower interest rates on loans. Think about other bank or loan accounts you may want in the future and make sure the bank you choose offers these as well.

If your situation changes down the road, you could always consider opening up an online bank account at that time. But for the time being, focus on finding a brick-and-mortar bank account that checks all your boxes.

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