Here’s the thing most people don’t get; online banking is not for everyone, nor is it even the best solution for everybody out there. There seems to be a very common misconception that leads people to think that simply because most people around them are doing it, they should too. No, that’s really not how it works, nor is it as straightforward as all that. Even the aspects of banking pickup and cash pickup are just as important in the grand scheme of things.
What you need to keep in mind is that each person's particular scenario is different.
If you happen to:
- have limited computer access
- make a large number of withdrawals and deposits on a frequent basis
- get paid in cash often
Online banking is probably not the best option for you. And as hard as it may be for some of you to believe, there are still a lot of people like that.
However, on the other hand, if you have a large portion of your savings that you don’t need much access to, online banking will end up being a great option for you. It ultimately boils down to your own priorities and personal situation. I personally feel that online banking has worked out extremely well in this regard.
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On that very note, let’s take a closer look at the three main advantages of online banking.
The aspect of high-interest rates
Online saving accounts on the whole end up offering much better interest rates. Apart from most other normal banks, they don’t have the problem of too many people or too much waste and space needs. On the whole, it’s a much cheaper and easier-to-maintain business model on the whole, plus there is a certain level of comfort in high-interest rate services on the whole.
Because of how much they end up saving, most online banks even end up passing a part of their savings to you in the form of some of the highest saving rates. However, it is not always the case that you will be offered better savings account interest rates. In the unlikely scenario that you find your high-interest savings account rate spiralling downwards, you may want to start thinking about switching banks.
Lower fees
Online banks end up offering better interest for pretty much the same reason that they lower fees for aspects like monthly account maintenance to checking overhead drafts as well. Not only do they tend to have lower fees on their investment accounts, but even debit cards are usually free. Other free services such as online bill pay are available as well, and I would highly recommend that you try them out for yourself.
Having the proper mindset
One thing is that with an online savings account, your money is not that easy to get to. However, with a savings account, that is actually an advantage as it will discourage any form of impulsive spending. Being a compulsive buyer to the core, it’s needless to say that it helped me out a great deal.
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Here’s what you need to remember - the moment you get down to comparing the different savings account interest rates, you can be sure that opening an online savings account will be much easier. Not only are they quick to open and easy on the whole, but the moment I linked my new savings account to my existing checking account, I was a lot more at ease regarding the overall state of my savings. Once that is taken care of, you can do a variety of tests to try and see whether those interest rates hold up or the aspect of the customer service.
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The moment you are confident enough about the bank you are dealing with, you can decide whether you want to make the switch with your checking account as well. I personally did and I have no regrets, whatsoever. At the end of the day, there are a great many advantages to be found in online banking with aspects such as low fees, convenience and great interest rates. So make sure that you do your homework when it comes to finding out the best saving rates.
Sarah Williams
Latest posts by Sarah Williams (see all)
- 3 Advantages of Online Banking - November 20, 2017
Nice post Sarah. These are some solid reasons to go online. There is one hidden disadvantage that people don’t know about. Online banks do not offer the gold medallion guarantee. This is something required if you want to transfer property between brokers and companies.
We use Ally bank and really like it! Great customer service, pretty good customer service, etc.
We have our checking accounts in brick and mortar banks but savings online, the rates are much better!
I love my online savings account. Much better rate than the B&M banks.
Nice article!
I’ve heard that Ally is a great online bank for freelancers. I read that with some of the others, if they realize you’re using the account for business they give you a hard time.
Hey, Sarah!
Great post with sound ideas. “Stevie G.” Steven Goodwin is fortunate to have you post here. Maybe you’d consider doing so at Money is not Taboo.
Anyway, I like how you shared the “Mind Sets.” Many folks don’t realize that the most important tool for Financial Success is “Money Mindedness.”
Great info, for sure and I’m “Plugging” this post in the next Terrific 10 at Money is not Taboo dot Com.
As such digital transformation has already started and very soon every market will have to evolve and start the digital ride before they put themselves last in the race. Look at the major banking technology trends that we can look forward to in 2018: http://bit.ly/2oId5kz