Online Banking Checking And Savings Accounts

Online Banking Checking And Savings Accounts [2021]

Online Banking Checking And Savings Accounts [2021]

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I was skeptical and even concerned the first time I considered moving my funds to online banking checking and savings account. I was starting to look into online banking services for improved technology, enhanced banking features, lower cost and higher interest rates that they offered. I was so used to years of being able to simply drive to my local bank and having that security and comfort of talking to someone to handle my banking needs. That is no longer the case. I’m now an online banking believer and I have no plans to ever go back to my local bank.

What is an online bank & online banking?

An online bank is a bank that does not have any physical bank branches and provides banking services over the internet through mobile and web-based banking interfaces. This allows you to bank directly from your smartphone or computer. These financial institutions have much lower overhead costs and in return offer more favorable higher interest rates, cutting-edge banking technology and lower banking fees.

Who is an online bank for and who is not for?

In my opinion, everyone could if they really wanted to transition to online banking. The exceptions are individuals or businesses that heavily rely on cash deposits or regular high value, high volume same day money market or bank checks. 

For everyone else, if you’re looking for fast, convenient, enhanced services and typically higher interest rates, then online banking is for you. I have found their support services world-class with typical 24/7 support either a phone call away or available through online chat.

Are online banks safe? Are they FDIC insured?

Please click on the FDIC guide on “Learning Bank – Checking & Savings Accounts

The answer is yes and yes for the most part. You need to ask and check with your financial institution but every bank online banking platform that I have used has been both safe and FDIC insured. All banks today, whether they are online, digital or your local bank, offer some type of digital interface to log in. So all of them for the most part are vulnerable to hacking. Online banks though typically have exceptional security, because they are highly technology-focused. These online banking digital platforms are even sometimes called Fintechs or financial technology companies, providing bleeding-edge, world-class cybersecurity features. This is not a guarantee or a general rule, but it is a typical growing trend based on these types of digital platforms and services being offered in the market today. Always check through an online search prior to banking with any bank for their historical reputation prior to opening an account. Also, just point blank ask them what they have in place for security and if they are FDIC insured.

Please click on the link to the free “Tips For Safe Banking Over the Internet” guide from the FDIC, Federal Reserve and Office of the Controller.

How to open an online checking or savings account?

To open an online account, you would need a government form of id, proof of address and a tax id, your social security number. This can be done all from a mobile app without any human interaction, it’s pretty amazing. I have found that online account approvals are pretty instantaneous as well. Sometimes online banking account approvals can be done within minutes.

Why I love online checking and savings accounts?

For me, it’s all about cost, technology, enhanced services, higher interest rates and convenience. With typical overhead costs much lower than traditional brick and mortar counterparts, digital online banking platforms pass these savings on to you. I have also never had an issue that I couldn’t resolve through the phone, online chat or email with an online banking platform. Their technology in my experience is also far superior in many ways. The best part of all is that online banking usually comes with no-fee checking accounts, higher interest rates and bonuses to new customers, as they’re aggressively growing and expanding their customer base. That is great for all of us looking to get the most out of our money today.

Top notch technology and services

You still get your traditional transactional checking, savings accounts, debit, credit cards and even paper checks with online banking. It is with the enhanced automation services where they really shine. This includes using machine learning and artificial intelligence tools to help you save more and spend less. You typically also find industry-leading mobile applications with a lot of smart and intelligent features built-in. Some examples of these enhanced features include automated integrated budgeting tools with goal setting savings options and spending alerts to name a few. Simply put, online banking services provide smarter, cheaper and higher interest rates than at your local bank. Your mobile phone has now become your banking tool of choice, no longer your checkbook or bankbook. You can make digital online payments, deposit traditional checks, schedule payments, get payment alerts and you can even pay in person using your phone at merchants or through peer-to-peer systems integrated with your bank like Zelle. We simply live in amazing times and banking has come a long way.

No fee and no minimum online accounts

You should avoid ever opening banking accounts with minimum balances and fees associated with them at all costs. You want to build your wealth and always get your costs under control. The last thing you want to do is park your money in a checking account somewhere where the financial institution is taking a cut of your money away from you in the form of fees. You want a banking platform that you can grow with and you that you can trust. Some online banking platforms even offer no-cost overdraft fees, bounced check forgiveness and more on their accounts. It doesn’t hurt to ask what all the perks are prior to opening accounts and parking your hard-earned money there.

Be sure to check out my personal finance pages, free monthly budgeting tools and guides so you get your online banking account in good order when you open it. 

Online account interest rates, promotions and offers

If you can get any interest on your money in a checking account go for it. Checking account interest rates are usually significantly lower than their savings account counterparts. Some banks do offer introductory rates and others offer high-interest rates for the first $1000 of deposit for example. Other’s offer integrated checking and savings solutions providing seamless banking with the high-interest benefits of savings accounts.

Bank accounts, checking, savings, CDs and money market account interest are subject to taxation. Please click the link to the IRS website for additional information.

Other services to take into consideration

Be sure the online bank you’re researching offers ATM services with minimum or no fees at all. Because you don’t have a traditional brick and mortar bank, your main way for cash to go in and out of your account is going to be the ATM. So, it is critical you find an online banking platform that can offer this necessary convenience at no cost to you. You are still going to need paper checks, money orders or bank checks from time to time as well. Check to see the costs and turn around for these particular services, and make sure you plan accordingly ahead of time if you need them.

Our #1 recommendation for online banking is Chime. Chime offers automated savings, high yield interest rate accounts, no minimum account balance fees, no overdraft fees and they even offer a service where you can access your direct deposit work payments 2 days in advance. Check out Chime below and try it today.

#1 rated for online & automated checking & savings

#1 Rated For Online & Automated Checking & Savings

If you’re looking for banking with no fees and automated savings then you have to try Chime. They offer no hidden fees like monthly fees, overdraft fees or minimum account balance fees. They also offer a service to get you paid up to 2 days early through direct deposit. With Round-Up, you automatically transfer spare change to the dollar into your savings account. Try Chime today.

Chime Mobile Card

Summary

I personally love the costs, services, high-interest rates and technology that online banking platforms offer. They are usually years ahead of traditional banks and they are always working hard to make the overall banking experience world-class in every way possible. Now with smartphones and the internet, the need for the local bank, the teller window and traditional banking needs is becoming less of a necessity than ever before. Online banking is here to stay. If anything these online banking platforms are growing and getting better all the time.

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Frank Makrides

Frank Makrides

Is a former financial technology industry executive, licensed realtor, real estate investor, an award-winning speaker, has been published, holds multiple patents and is passionate about all things personal finance and entrepreneurship. He is also a proud husband and father of 2 amazing children.

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