It’s no secret that more and more people are flocking to online banks as opposed to visiting the physical locations of their branches. There are even banks that do the majority of their business strictly online.

With technology always pushing forward, it’s easy to see the benefits and convenience of doing all your online banking via your home computer or smartphone nowadays.

You can take care of things such as balancing your accounts, paying bills, transferring money, talking with a teller or just checking your balance all without the hassle of climbing in your car and driving to your nearest branch. If you’re thinking that it’s pretty hard to compete with that kind of convenience, you’d be right. But is online banking too good to be true? Let’s take a look.

Perhaps one of the first things you’re going to need to figure out is who you want to do your online banking with. Just like when selecting an institution at a physical location, you’ll want to use a bank that meets your financial requirements and also compliments your lifestyle.

The Pros of Online Bank Accounts

Increased Convenience – This is self-explanatory and certainly hard to beat. Being able to access your account from anywhere, at any time, and on various devices, can be extraordinarily beneficial.

Cheaper Fees – Since online banks generally have much lower overhead costs than their physical counterparts, they’re able to offer much lower account fee options. In other words, this means more savings for you. This is another aspect of online banking that is hard to argue with. After all, who likes paying fees?

The likelihood for Higher Interest Rates – Savings accounts that you open with online banks oftentimes come with the perk of higher interest rates. Many banks that operate primarily out of their physical locations offer somewhere around .01% APY, whereas you can see an APY of 2% or higher when banking with online banks. Higher APY is a good thing for you as it means your money is actively working to make you more money. This can lead to an increase of a few thousand dollars over just a few years as opposed to only a few hundred.

Security – You’ll want to make sure that the institution in which you decide to keep your money in has modernized security features. Online banking can be trusted in the same manner as traditional banking regardless of not having a physical location. The important thing here is that you make sure the bank you choose offers the following:

  • Encryption
  • FDIC insured
  • Fraud monitoring

No-Fee ATM Access– With traditional banks, there is generally no fee to use ATMs that are owned by the bank itself. But if you find yourself out of range and have to use any other bank’s ATM you’ll usually be met with a fee. When it comes to most online banks, you’ll be able to access tens of thousands of ATMs all over the country (and even worldwide) without catching any pesky withdrawal fees.

Advanced Technology – Since the banks operate solely online, the technology that they offer is generally superior. For example, you’ll oftentimes find better:

  • Online account info downloads (which is a huge plus when it comes to tax season.)
  • Automatic transfer options
  • Mobile checking options ( you can even deposit checks by snapping a selfie!)
  • Budgeting assistance

The Cons of Online Bank Accounts

Deposits Can Be Trickier – When it comes to banking the last thing you want to have is a problem depositing your money. Generally, things go smoothly with payroll checks as most employers will deposit them directly into your account with no problem. The issue here is when you need to deposit actual cash. With online banking, you’ll have to use a money order and physically mail it in or transfer the cash to a mobile app and then from the mobile app to your bank. Yeah, you read that right. It’s a lot of extra steps. If you don’t deal with cash that often, then you can disregard this con altogether.

Lack of Staff Interaction – This is another con that is submissive if this isn’t a feature or trait you look for in a banking institution. While online customer service can be great, some people prefer to have the option of talking directly to a human being. With online banks, you’ll be hard pressed to find this luxury and will either be dealing with bots, forums, or various representatives over the phone. Again, some people may never have to contact customer support or require to talk to someone in person which is why this is easily dismissible. In conclusion to this article just remember that you need to weigh out these pros and cons based on your own lifestyle. Don’t judge it just because it lacks a feature that you’ve never used or don’t think you will ever utilize. In the case of avoiding fees and ease of use, online will be the way to go for most. But to those who look for a more traditional bank setting, the brick-and-mortar physical location is more your speed. The best advice is to weigh your options and go with the one that fits your lifestyle best.