52% of Americans Do Most of Their Banking Online. Here Are 3 Benefits of Digital Banking

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

KEY POINTS

  • New data reveals that a large number of Americans have switched to online banks.
  • If you're used to a physical bank, these arguments make the case for a change. 
  • You could enjoy higher savings interest rates, easier money transfers, and knowledgeable customer service reps. 

If you're not banking online yet, you may want to make the switch.

There was a time when having money in the bank meant having to go to a physical building to deposit a check. Nowadays, that's not necessary. Thanks to the convenience of online banking, you can handle all of your banking matters without having to leave your home.

A recent report from Morning Consult found that 52% of Americans now do the majority of their banking online. If you're someone who's used to a brick-and-mortar bank, you may be hesitant to make a switch. But here are three benefits you might enjoy if you move over to an online bank.

1. A higher rate of interest on your savings

It costs a lot of money to operate a physical bank. You have to pay rent to a landlord, hire staff, furnish that space, and cover the cost of utilities. 

Online banks don't bear those same costs. Sure, they have to hire employees -- everyone from customer service representatives to tech people to internet security specialists to make sure bankers' data is protected. But still, online banks don't have nearly the same overhead as brick-and-mortar banks. And because it costs them less to operate, they tend to pass savings on to customers in the form of higher interest rates in savings accounts

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

APY
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn
$0
APY
5.00%
Rate info Circle with letter I in it. 5.00% APY for balances of $5,000 or more; otherwise, 0.25% APY
Min. to earn
$5,000
APY
4.25%
Rate info Circle with letter I in it. See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn
$0

If you have a decent chunk of cash in savings, a higher interest rate on your money could make a big difference over time. And even if you only have a small amount of savings, you might as well earn more interest on it rather than less.

2. Easy transfers between accounts

When you do your banking online, you can seamlessly transfer money from one account to another. Let's say your checking account has $1,400, and you need $1,800 to cover a car repair. If you have that $400 in savings, you can click a button and make that transfer happen on the spot. That's a lot more convenient than having to go over to the bank and get that money moved around.

3. Great customer service

Customer service reps who can only interact with customers over the phone or internet chat face a challenge. They can't offer up service with a smile because their smiles can't be seen. As such, they tend to compensate by being really knowledgeable so they can give customers the service they deserve. 

Now, this isn't to say that physical bank employees aren't knowledgeable, or that they're always smiley. The point, however, is that online banks tend to put a big emphasis on great customer service because they know they need to make up for the fact there's no face-to-face interaction. 

You may be used to banking at a physical storefront. But before you write off the idea of using an online bank, it pays to read more about the benefits you might reap. Clearly, there's a reason why more than half of Americans do most of their banking online these days, so you may want to open an online bank account without closing your current one and at least see where that takes you.

These savings accounts are FDIC insured and could earn you 11x your bank

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 could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

Two of our top online savings account picks:

Rates as of Jun 19, 2024 Ratings Methodology
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SoFi Checking and Savings Capital One 360 Performance Savings
Member FDIC. Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
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= Fair
= Poor
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor

APY: up to 4.60%

APY: 4.25%

Min. to earn APY: $0

Min. to earn APY: $0

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