Should I do my banking online?
Online banking is a topic that has not gotten much exposure on the Student Platinum blog, but has become very commonplace in personal finance. When I say online banking, I don’t mean the portals that brick & mortar banks (like Bank of America or Citizens Bank) give you to track your accounts, I mean organizations like ING Direct, Discover Bank and Ally Bank that exist 100% in the electronic world.
If you watch TV regularly, you probably have seen commercials for products like Ally Bank’s online savings account. They usually offer interest rates that are much higher (sometimes more than 4x traditional savings accounts) at the cost of physical convenience. Let’s break down the pros and cons of banking online and see if it’s right for you:
Pros
- Much higher interest ratesDue to the fact that these banks don’t have physical locations (and therefore significantly lower operating costs), they are able to pay you more to take care of your money while you are saving it.
- Many online banks reimburse most (if not all) ATM fees
- They are FDIC insured up to $250,000 per account, just like brick & mortar banks
Cons
- Deposits must be mailed in, can take a few business days for processing
- If you are transferring money from your online account to a normal bank account, it isn’t instant. Usually, there is a lag of one or two business days.
- The potential for customer service frustration is higher. You can’t just walk into a bank branch if you need to… all CS interactions will have to be via phone, email or online chat.
The Verdict
One thing about online banks that is especially applicable to students is ATM fee reimbursement. For most of you, you go to school at a college that probably isn’t close to home and therefore your hometown bank may have no footprint. A bank account that refunds ATM fees is super useful and will help you avoid getting charged $2-4 every time you want to take out money.
Otherwise, online banks really excel at providing excellent savings accounts. The higher interest rates just can not be beaten by traditional banks; if you want to earn the most interest you can in a risk-free way without penalties, an online savings account definitely satisfies those criteria.
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I bank online and have not run into any glitches or problems with it and have set up bill pay and no longer have to worry about paying my bills on time.
I am a student and I use online banking. I personally love it and find it useful
I prefer to pay online already
Online banking can be great. The accessibility, convenience, etc. I myself have an account set up by my employer through Skylight. The account itself is a big inconvience for me. I can not add funds to the account, if I use an ATM to access my money I’m charged a fee. To avoid the fees I can order “withdrawl checks” that have to be processed like a money order at a participating bank (I have only tried that method a few times; it’s confusing to the teller and an embarassment to myself because it turns into a big deal every time). The company itself is set up for individuals that do not have the credit to get a bank account; my employer made the accounts appear mandatory and did not allow the option for direct deposit into existing accounts. I have ran into a few instances where I can not pay bills online with the card because the company is either not registered with them or they do not view skylight as a legit bank (verizon, old navy credit card, maurices credit card). With verizon, my next cell phone bill was charged a fee because it appeared there were not enough funds in the account. With the credit cards, I was charged late fees because I did not catch the payment until the due dates had passed. I am sure there are other strictly online banks are not this inconveinent, but after this experience I will avoid them.
My regular bank account is a “brick and mortar” bank with the option to participate in online banking; I love it.
well there are still banks where you can check online and stuff. soo i think ill just stick to that
I think banking online is the best way to go, it easy and faster. It save me alot of money on stamp.
My mother banks online and she say it makes it simple for her being a single mom, because when she has to work she doesnt have to worry about calling on the phone listening to those automative system that sometimes dont work.
online banking is real convenient. Its so useful when you're on the go and have to transferm money real quick or just want to chech your balance to see how much cash you have. I love it
I do banking online, and i like it alot!
to me it is the right thing you could check your allowances quicker and more easier
This helps alot!
I love online banking; It is so convenient and easy.
very good to know.
I think a great way to go
i bank online. it makes it nice.
It’s a very interesting subject.
mmm….never wonder about this.
Banking online is awesome! I have a credit union in my home town so i can't have direct access to the bank.
Wow, interesting