Did you ever think that there would come a time when individuals could manage their money without ever having to set foot in a bank? Even as computers began to make their way into every area of our lives, certain things like brick and mortar banks seemed like they were more or less permanent fixtures in our daily lives. However, there are now financial institutions with names like First Internet Bank, Bank of Internet USA, and Ally Bank that exist solely online. They have no brick and mortar bank branch offices.
As someone who has never had an account at an internet-only bank, I am curious about these banks and what advantages they could offer a potential customer like me. I’m also picky about things like security, because about seven years ago my bank account was somehow compromised and money was stolen. Luckily, my local bank where I have the account was able to recover the money for me but I’m kind of paranoid about security and would want any bank where I put my money to be able to get it back for me if there were a security issue.
When I went online to learn about the internet only banks, I was pleased to see at least a few that are FDIC insured, and that offer an online safety guarantee that protects their account holders in the event of a security breach. Customers of online only banks also often enjoy higher interest earnings on savings accounts, cds, and even checking accounts. These banks offer the things that regular banks offer like debit cards, checks, online bill pay, and ATM access. Some, such as Ally bank, promise that you will never pay an ATM fee, no matter which ATM you use.
All that seems well and good, but the burning question in my mind was still “So how does my money get in there?”. Customers can fund their internet bank accounts by transferring money from regular bank accounts, mailing in their paychecks (some even supply postage paid envelopes), direct deposit, or wire transfer. I did read some customer reviews for online banks, and there are a few things that you should be aware of before opening an account with one. Most customers are very satisfied with their internet banks. However, you can not use debit cards for online banks to pay for certain services. I am pretty sure that people with debit cards from regular banks sometimes run into this issue too. I know that if I had only an account with an online bank, I would be a little concerned about how long it would take to mail in checks and have them credited to my account. At any rate, it seems as though internet banks are gaining popularity. Only you will be able to decide whether it is time to ditch your brick and mortar bank, open an online bank account in addition to your regular accounts, or neither.
Photo by kevinrosseel on morguefile.com.