Internet banking is increasing in popularity. Is it right for you? Find out more about online banking pros and cons.
These days, you have many banking options. You can bank with a local bank in your community, and you also have many online banking options. Online banking can make handling everyday personal finance matters more convenient. Let's go ahead and take a look at online banking pros and cons.
What Is Internet Banking?
Internet banks or online only banks are banks that are accessible online. You don’t have to reside near them to bank with these companies. Instead, you access your banking accounts through the web. You can do this through a mobile app or the bank’s website, and you’ll be able to conduct your transactions electronically.
Internet banking options have grown as more people rely on advancements in technology to handle their day-to-day affairs. With the popularity of online banking and no geographical requirements, you have more bank options. This can give you greater control over your financial matters, and you can seek out great online financial companies.
As an online bank account holder, you can do much of the same tasks as you would when banking with a traditional bank. The best part is that internet banking makes it possible for you to handle your money management needs from the comfort of home or while you’re out and about.
With an online bank account, you can handle the following tasks:
• Check your account balance
• Transfer, deposit, and withdraw funds
• Automate your savings goals
• View your transaction history
You may be wondering if your money is secure and safe when using an online bank. As long as you’re banking with a reputable financial company, your money should be safe and secure. Before seeing what you need to open a bank account or work with an online financial institution, look into its reputation and credentials.
Monorail is one such safe online banking and savings option. Like most banking apps, Monorail provides its services through a real bank that is registered with the U.S. Securities and Exchange Commission. The SEC is a federal agency that regulates the financial securities market. Always look for these types of credentials as you research online banks and related apps, including that your investment accounts are insured and protected by The Securities Investor Protection Corporation. The SIPC is a non-profit corporation that aims to protect investors.
Pros of Online Banking
You may be curious about what online banking pros and cons exist. Online banking offers many benefits. If you’re someone who doesn’t want to step foot inside of a local bank branch every time you need to handle your financial matters, opening an online bank account may be a good option for you. (You may even find that many big banks offer online banking as well.)
There are quite a few advantages to online banking.
Internet banks may offer better rates than your traditional bank. For example, you may be able to earn more interest by keeping money in your online savings account. Take a look at APY rates offered by your local banks and those rates offered by online banks. The higher the rate, the more money you’ll earn as you let your savings grow.
Many online banks charge lower fees (or no fees at all). Banking fees can add up quickly, and you deserve to keep as much of your hard-earned money as possible. Depending on what fees you currently pay, you may be able to save money by switching to an online bank. Online banking may be a good way for you to avoid monthly maintenance fees and open a bank account with no deposit.
Life is plenty busy, and it can be challenging to take time out of your day or week to head to a nearby banking branch. By opening an online banking account, you can make your life easier.You’ll be able to check your bank account balance as often as you’d like, and you can do so while on the go. Plus, you’ll save time and won’t have to wait inline. Or get your business done by closing time.
Access to Money Management Tools
Many internet banking apps give their customers access to helpful money management tools. These tools can increase financial literacy and improve financial habits. Examples of tools include auto-savings and auto-investment tools and tools that make it easier to organize different savings goals. The Monorail app makes it simple to make one deposit and then split a portion of the total deposit towards separate savings goals.
Cons of Online Banking
While internet banking can be beneficial, it’s not a perfect solution, and it may not be the best fit for everyone. Some disadvantages come with using online banking capabilities. Being well aware of online banking pros and cons before opening a new bank account is a must. Here are some of the cons of online banking:
Cash Deposit Limitations
When making deposits to your online banking account, you won’t be able to make cash deposits. Some internet banks are part of an ATM network. That means that you can deposit money into an ATM that is part of their network and deposit the funds into your online bank account. But this option isn’t always available.
Instead, you can transfer money from one bank account to another. Any cash deposits would be deposited into a local bank account, and then you’d transfer it over to the online bank account.This is easy to do, but it does require that you have multiple bank accounts.
Less Personalized Banking Relationship
If you’re someone who enjoys having a personal relationship with your local bank tellers, online banking will feel a bit different. Your interactions likely won’t feel personalized. But many internet banks have a great reputation for excellent customer service. Research options to find a company that treats its customers well, regardless of whether they bank in person or online. Make sure to read reviews.
Tech Issues Can Happen
Any website or app can have tech issues. While these occurrences are usually rare, there may come a time where you’re unable to access your internet banking account for a short time. But even traditional banks can have tech issues with their banking systems, and you may encounter glitches or delays when you visit a local branch in person.
Is Online Banking for You?
Now that you're aware of the online banking pros and cons, you may be wondering if internet banking is right for you. If you’re someone who likes the convenience of managing your personal finance matters from the comfort of home, it probably is an excellent option to consider. Plus, you may get access to more money management tools to help you make smarter spending, saving, and investment decisions. It all really depends on your level of comfort and personal financial literacy. If online banking is for you, and you're not quite sure how to make the switch, here is some information on the best way to change banks.
If you want to save for the future, Monorail is a great online financial tool to consider. Monorail makes it easier for people like you to save and make your financial goals a reality.
See Monorail Banking features.
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