Three Reasons to Choose an Online Bank
Data breaches have become so common that it’s impacting people like my husband and me. For instance, last year my debit card was compromised in the Target breach, and his was affected by the Home Depot breach. Our bank unexpectedly canceled our cards, causing a lot of hassle, especially since we didn’t have a credit card at that time.
Adding to our troubles, the bank sent us a letter recently saying they suspended our online bill pay account because it hadn’t been used for four months. This was confusing since we had just signed up for the service!
Fed up with the bank’s poor customer service, we started looking for better options and found three reasons why an online-only bank seemed like the best choice.
**Transfers Made Easy**
My husband and I met in college, and after getting married, I moved to another state for a job, which meant closing our local bank accounts and joining a credit union affiliated with my employer. This seemed beneficial because of higher interest rates and free checks. Two years later, I got another job, and we moved again, leading us to switch banks to another employer’s credit union. But when we moved a third time, there was no such credit union nearby, so we ended up with a local bank, which turned out to be disappointing.
By choosing a national bank, we could avoid the hassle of constantly shifting accounts every time we moved. Online-only banks solve this issue as you don’t need to worry about being physically near a branch; help is always available at your fingertips.
**Higher Interest Rates**
One big advantage of online-only banks is the attractive interest rates. These banks offer significantly higher rates for both savings and checking accounts compared to traditional banks. Surprisingly, you can even earn interest on checking accounts.
These online banks can offer such high rates because they save on the heavy costs that traditional banks usually incur.
**Attractive Perks**
Initially, we were concerned about ATM fees with online banking. Although we don’t withdraw cash often, we do need to visit an ATM a few times each month. Plus, since my husband travels frequently for work, there may be times when he needs cash quickly from any part of the world. However, leading online banks manage this by either reimbursing ATM fees or having a large network of ATMs without additional charges.
Moreover, the online bank we chose offers free checks, pays daily compounded interest, and doesn’t charge a monthly maintenance fee—benefits that our previous “national” banks nearby didn’t provide.
