4 Times It Pays to Close an Online Bank Account

Here's why you may want to consider dumping an online bank and replacing it with a new one.

There are plenty of good reasons to open an online bank account. For one thing, you might benefit from perks like higher interest rates on savings accounts and certificates of deposit (CDs). But if your online bank isn't working for you, then it's time to take your money elsewhere. Here are a few good reasons to close an online bank account.

1. Poor customer service

When you bank online, you can't walk into a branch and discuss an issue in person. Rather, you're limited to a live chat over the computer or a phone conversation. So if you have to wait on hold or sit at your computer for a long time before you're able to connect with a customer service representative, it's a sign that you may have chosen the wrong bank.

2. High fees

Banks charge fees for several reasons. Some do it when your account balance gets too low, while others charge for inactivity. If your bank is charging you too many fees, it pays to move your money someplace else that won't do the same.

3. Interest rates that aren't competitive

One big reason why so many people open online bank accounts is that they tend to come with higher interest rates for savings accounts and CDs. Online banks don't have the same expenses as physical banks. They don't have to pay rent to a commercial landlord and maintain branches. As such, they have the ability to pass some of that savings on to customers in the form of higher interest rates.

Our Picks for the Best High-Yield Savings Accounts of 2024

American Express® High Yield Savings APY 4.10% Rate info 4.10% annual percentage yield as of October 9, 2024 Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	APY 4.10% Rate info 4.10% annual percentage yield as of October 9, 2024	Min. to earn $0
Capital One 360 Performance Savings APY 4.10% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Sept. 27, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	APY 4.10% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Sept. 27, 2024. Rates are subject to change at any time before or after account opening.	Min. to earn $0
CIT Platinum Savings APY 4.70% APY for balances of $5,000 or more Rate info 4.70% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000 for max APY Open Account for CIT Platinum Savings On CIT's Secure Website. Member FDIC.	APY 4.70% APY for balances of $5,000 or more Rate info 4.70% APY for balances of $5,000 or more; otherwise, 0.25% APY	Min. to earn $100 to open account, $5,000 for max APY

But that doesn't mean your bank's interest rates are much to write home about. If you're seeing much better rates out there, whether at other online banks or even physical banks, then it could pay to close your account.

4. Frequent outages

Sometimes, websites crash or become temporarily unavailable for maintenance. But if your online banking site is down often due to outages or other issues, then it could be a sign that it's time to close your account.

Another benefit of banking online is getting to complete transactions quickly and efficiently. If technical difficulties keep preventing you from doing that, then consider going to a different bank.

Don't settle for the wrong bank

Given the number of banks (both online and physical) out there, there's really no reason to settle for one that isn't working for you. If the above situations apply to you, then it may be time to close your online bank account -- and find a bank that will better serve your needs.

In fact, if you've experienced some challenges related to the online-only nature of your bank, then it may be time to either switch to a brick-and-mortar bank or open a new online bank account elsewhere along with a new account at a physical bank. Online banking has its perks, but it also isn't perfect. And some customers ultimately do better having access to a bank they can actually go into.