Online banking has been quickly increasing in popularity over the past few years. As more and more people decide to use online companies for their banking needs, the pros and cons of online banking are becoming readily apparent. For some people, these qualities may be a deal-breaker and cause them to not want to pursue an online bank account. Others may look at the features and decide that online banking is the right choice for them. Whether or not you should consider online banking depends on your personal preferences and your current financial situation.
The Pros Of Online Banking
Many banking transactions are much easier for customers to perform online. Online banks provide their customers with ways to check their balances, transfer money between accounts, pay bills, and apply for credit products through their online websites. Some of these banks also allow customers to review brokerage accounts, make trades, and get free stock quotes. These transactions can be conducted at any time of day from the comfort of your own home when conducted through an online bank.
If you are concerned about security, you should know that online banking has become much more secure over the past decade. Online banks use some of the most sophisticated encryption software available to protect the data of their customers. There are also a number of other protections in place to ensure that customers’ monies are secure once deposited. Make sure that the online bank you are choosing has accounts that are insured by the FDIC, which makes the accounts just as safe as the ones held by traditional banks.
The Cons Of Online Banking
It can be difficult to make a deposit to an online bank without having another bank account. Because these banks rarely have physical locations, you cannot just do deposit a handful of cash on a whim. Most of these deposit accounts are funded by direct deposits of income sources and are accessed through a debit card connected to the account.
Unless you are making a purchase using a debit card attached to the account, it can be costly or time consuming to get your money out of the account. If you take money out of the account using an ATM, you may be subject to fees from your online bank and the owner of the ATM. Transferring the money to another bank account can take between 3 and 10 days, but the funds are transferred for you fee free.