Should I Be Using Online Banking Accounts?

Online banking accounts are something that are becoming more popular all of the time. Everyone from business professionals to college students to stay at home moms are coming to see the benefits of banking online. Banking fees when dealing with brick and mortar banks are one of the primary reasons that many people are deciding to do their banking over the web.

Online banking accounts are something that are becoming more popular all of the time. Everyone from business professionals to college students to stay at home moms are coming to see the benefits of banking online. Banking fees when dealing with brick and mortar banks are one of the primary reasons that many people are deciding to do their banking over the web.

Banking fees just keeping worse and worse. Surveys that have explored bank fees have shown that the fees customers are expected to pay are exorbitant at traditional physical banks. There are ATM charges, overdraft protection fees, NSF charges and minimum balance fees among others.

A recent checking account pricing study conducted by Bankrate (a company that reports on banks and banking in general) discovered that customers who had interest-bearing checking accounts paid the highest fees. The average checking account of this kind earns approximately $0.27% interest while the monthly fees on it are as high as $10.86.

If the bank fees and standing in line at the bank have you totally fed up then it may be time for you to explore the world of online banking. While there are some traditional banks that offer some services online an even more economical alternative is to look to banks that operate solely over the Internet and do not have a presence in the real world.

You may be asking the question- should I be using online banking accounts? There are pros and cons to using Internet-only financial institutions. Let us investigate both sides of the coin.

Pros of Online Banking

The number one reason that many banking customers like banking through the Internet is because of cost. Banks that only work through the Internet do not have the same overhead costs as traditional brick and mortar banks do. They do not have the expense of running a number of branches and all of the costs that come with that (such as utilities).They also do not have to pay a long list of employees. The overall cost of doing business is much lower which is why they are able to pass these savings onto the customers that choose to bank with them. For you this translates to lower fees and higher interest for your accounts and your investments. This is definitely a good reason to decide to open an online banking account.

There is convenience in using an Internet-only bank because it does not close. That’s right; because it is on the web it is always accessible for you. You have 24 hour, seven day a week access to your account.

Banking online is free of charge (yes free!) and online banks offer all of the same financial products as traditional banks, this includes such things as checking accounts, savings accounts, certificates of deposits (CDs) etc.

Cons of Online Banking

If you like being able to talk to a teller at your bank or a banking officer then online banking may seem a little difficult and  impersonal to you at first. While you can reach someone at the bank on the phone there is no physical location for you to go to when you have questions, concerns, suggestions or inquiries.

Depositing money can be a problem when you have an online banking account. If your paycheck is not direct deposited into your account then you will have to rely on the postal mail which could involve a waiting period.

Banks that operate online do not possess their own ATM network. This means that when you use an ATM from another bank you will be charged a fee. This is a negative aspect that online banks are working to rectify.