by Christy Bieber | July 2, 2019
If you're still using a local bank, you're missing out. Here's why you should switch to an online bank.
In 2019, you don't have to get stuck banking with a brick-and-mortar financial institution. In fact, if you're still using your local bank, you're paying more than you need to and missing out on some big benefits.
It's time to come out of the dark ages. Make the switch to an online-only institution. Not convinced you should change your banking relationship? Here are five reasons why you should move your money.
Does your bank charge a fee if you don't maintain a minimum balance? Are you required to make a certain number of monthly direct deposits? These restrictions are common at local banks. Truly free checking with no strings attached is really hard to find.
Unless you enjoy your bank setting rules for your money, you should look for an online bank. Free checking is more common with internet-only banks, letting you break free of monthly fees.
Many online banks also allow you to take money out at any ATM without incurring a fee. They'll even reimburse you for fees other banks charge you. In contrast, local banks typically expect you to pay them for the privilege of accessing your money at an out-of-network ATM.
If you don't want to pay to get your hands on your own money, online banks are the answer.
Savings account interest rates are dismal, and many checking accounts pay no interest at all. Online banks tend to pay more interest than local banks, so you can get a bit of a reward for your banking relationship.
Do you plan to park a lot of money in a savings account? Do you tend to maintain a high checking account balance? Then it's definitely worth looking for a better rate from an online-only bank. You'll probably be able to boost your rate with just a few minutes of shopping around.
Some people think online-only banks are less convenient than brick-and-mortar banks because there's no physical branch. But do you really want to get in your car during bank hours and drive to the branch to get help?
You don't have to with online banks. Online institutions provide ample opportunities for customer service via online chat and over the phone. The availability of 24/7 service is more common with online banks, too.
And they typically have higher mobile deposit limits than local banks do. So you don't have to deposit a big check in person if you bank online.
The only way online banks are less convenient is when it comes to depositing cash. Fortunately, there are workarounds like buying money orders or using linked ATMs to deposit your funds.
Online banks need to tap into technology more than local banks. This means you can usually expect better, more full-featured apps.
Some local banks have kept up with the latest in mobile technologies. But others lack features like Zelle's instant money transfers. If you want to be able to do a lot from your phone or computer, an online bank is a better choice.
When you move for work or school, do you want to deal with switching your bank? Those first few weeks are busy, and opening new accounts isn't high on anyone's list. But if you bank with a local branch, you'll probably need to. If your closest local bank is hundreds of miles away, getting money out of an ATM or going to a teller isn't practical.
With an online bank, you don't have to worry if you move or travel far away. You can still continue using your account the same way you always did.
These five benefits of online banking should convince most everyone that moving to an online bank is the best financial choice. Open an account with a great online bank today and start the process of moving your money over. Then reap the benefits that only internet banks can offer.
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 12x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2021.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.