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 do online banking and i think it's a wonderful was to pay bills and shop. It frees up time for you to do other things such as work or just have a private like.
I personally don't find online banking a very wise choise. I mean technology is constantly changing and failing and you never know if information can be lost. Not to mention there are computer whizzes out there that can easily hack into your account. Sure they can do that in an actual bank, but not near as easily as if everything were strictly online.
Yes, online banking is the way to go. No more running out of stamps as you won't need them.
It is quick and reliable. I wish I would have signed up for online banking sooner.
I do online banking and I like it because I can always go online and check to see my balance before I make a payment. Plus it is free and safe!
i think online bnking can be useful, but in moderation. i would say have a certain account just for your online banking
I love online banking and also being able to check my balance BUT I also check to see if all my checks have cleared or not. AND just make certain the http:// has the added s for security – https://
I would warn a lot of you to make certain you keep a record of all checks, ATM withdrawals, debit withdrawals, etc. AND not assume that you have XXX amt of money with one or more has not cleared yet.
Unfortunately, some people do not reconcile their bank statements and just rely on what it says when they go online. NSF charges can occur. Just Beware!
I believe it is a good idea to pay online because you woudnt need to worry about stamps.
I just started using the online baking and i find it very cool. Its a strees freee way to pay ones bills and other payments. Even though iagree it could be dangerous, which is a probability of 0.1 . Oline banking is really cool.
I'm going away from home, and this is very helpful
It makes it easier when paying school bills because it decreases interest rates. Yay!!
I always keep track of my account activities through the bank's website… its the best way to see how much is being spent and keep track of payment deadlines.
With every new improvement in any society there are pros and cons, but I believe online banking is convenient and easy. Yes, there is a chance of hacking, but there is no good without the bad, and users of online banking should choose to rely on the process of online banks, or not by using their own discretion.
I think banking online seems like such a pain. I think i'll steer clear of banking online.
I personally prefer online baking. you can have access to your account all the time without driving miles to the bank
I love online banking, because it's free and it allows me to keep track of my account just by getting online. It's especially convenient when I have to go out of town for a while, and I can't go to the bank to check on my account.
thats interesting
interesting…
I cant understand why they would do that to people…
I would not do online banking. I'd be scared that someone would do something to my money. I would rather do my banking in person and know what is going on.
@ Shafina – All the online banks we list on Student Platinum are FDIC insured, so your money is covered up to $250,000 no matter what. Honestly they are the same thing as brick & mortar banks, you're just doing all your account activity online instead.
Having worked in the banking industry for 6 years in a number of capacities (i.e. sales, operations, cash management & customer service). I believe these banks offer a great opportunity. First and foremost any young adult should consider banking with multiple institutions. It may seem like more to manage, but the reality is it is opening you up to a number of future options in investing for yourself, as well as giving you a reason to pay a little more attention to your finances. My suggestion is consider investing in an “online” bank by opening a savings account…. Why? Higher interest rates benefit you… And what you don’t have at your finger tips you are less likely to spend! It’s a great way save! Set up a transfer from your regular bank for 5 or 10 dollars to transfer bi-weekly to your online bank (most have 6 transactions per month limits) and before you know it you will have a savings account worthy of paying off loans or making a first time home purchase! If you are young and reading this… know that I am only 26 years old and I am proof that you can’t start planning your future too early (if it’s what YOU want for yourself).
online banking is very manageable.it allows u too see where your money is going how u are spending your money and helps u stay away from overdrafts.
I love online banking… It's practically all I use.
I am a college student away from home it is very important for me to have online banking.
It is good to use online banking is quicker ,and the banks are not open 24 hours for you to go in to do a transaction or transfer fund or review accounts you can do that online at your own convenance
very interesting