Finding great deals on savings and checking accounts is much more difficult today. Banks are charging higher fees on both, which makes it difficult to choose your bank. In the past couple of years, online banking has become a great alternative to the old brick and motor banks. More people are switching to online banking. If you are thinking about it, there are several things you will need to consider.
Here is a breakdown of all the pros and cons or subscribing to a virtual banking system
Online Banking Pros
You get higher interest rates
This is one of the greatest advantages you get with online banking. There is a slight bump in the interest rates for both the savings and checking account. For instance, traditional banks offer interest rates that range from 0.50 to 0.10% while online savings and checking accounts offer rates that range from 1 to 0.90. it may not seem like much to you but the rates can add up to much in the long run, especially for the savings account.
There is a lesser fee imposed
This is another benefit of online banking; you will be able to save more money on the fees. Traditional banks offer a wide range of fees some of them including minimum balance fees, late fees, direct deposit fees, over limit fees, debit card fees and check fees. Online banks have a lower operating cost and typically won’t leave you shelling out for all those charges.
They are very convenient
The greatest thing about online banking is that they are always on operation. You can access your account at any time you please from anywhere. Online banks allow you to set up automatic transfers, check your balance using the mobile banking app and even schedule bill payments. Some applications will keep you on track with the payments and even notify you on the balances.
They offer a sense of security
One common myth about virtual banking is that they are not as safe as traditional banking. In real sense, online banking will not necessarily increase risk of theft and identity theft from your personal information. Online banks have similar security measure to those of other banks when it comes to protecting your data. They have encrypted websites and a personalized code that helps you access your information.
The downsides of online banking
Making deposits on your account can be a hassle
When there is no physical location, adding money to your account will be a challenge. Depending on the bank, you can mail deposit or make a wire transfer when you need to make deposits. You will need to go to physical banks t deposit a check if you need to.
The services are less personalized
A great thing about traditional banking is that it allows you to build a personal relationship with the people who handle you cash. With online banking, the services are handled online, by phone or through email. You will not get the face to face interactions. If you want to handle problems with the account and need to talk to someone who knows your financial history/background you will need to visit a physical bank.