Technology has changed the way many tech-savvy customers do their banking. The onset of online banks has made it possible for customers to conduct all banking virtually, without ever having to visit a brick-and-mortar location. Choosing between online banking and traditional banking is mainly a matter of preference, but the latter does offer plenty of features many customers would consider a major disadvantage.
Accessibility at traditional banks is limited, as you can only conduct business at their brick-and-mortar locations. If you’re traveling or unable to make it into the location during standard hours of operation, you won’t be able to do business.
Getting in the car, driving to a bank and waiting in line to be served takes up your valuable time. It is more efficient to do your banking online, where you can open new accounts, set up auto bill pay, check account balances and transfer funds all from your own computer.
Lower Interest Rates on Savings
Online banks are typically able to offer much lower interest rates than traditional banks, because they have much lower overhead costs. An October 2013 study by MoneyRates.com, revealed that the average interest rate for a savings account at an online business was 0.569 percent, while it was just 0.123 percent at a traditional bank.
Greater Account Minimums
Traditional banks typically require you to maintain a much greater monthly account balance than online banks do. According to a May 2013 Business Insider article, traditional banks require an average of $4,700 to be kept in a savings account, without charging you a monthly maintenance fee, while online banks average just $350.
Yo9ur own bank usually won't charge you a fee to use one of its automated teller machines. However, if you use another bank’s ATM, you’ll typically be charged a convenience fee. This can make it difficult to get cash, because you may find yourself driving all over town to find your bank’s ATM, to avoid the fee. However, many online like banks have an agreement with ATM networks allowing customers to use a wide variety of cash machines free of charge.
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