Online banks are increasing in popularity, and many small businesses and individuals are opting to go this route. As a rule, online banking works best for individuals who are comfortable using computers and keyboards and have some experience with the Internet – whether conducting research or shopping online. It’s best for people who keep their computers, hardware and software, and Internet security up-to-date. If that sounds like you, here’s a rundown of the basic pros and cons.
- Faster – You can take care of routine transactions without standing in line or taking the time to visit a bank branch office. These include depositing checks with your PC or mobile phone, online person-to-person payments and paying bills.
- Extra privacy – you are not dealing with individuals in the locality where you work/live.
- Useful option for self-sufficient individuals who like the idea of transacting business on their own time frame in the privacy of their home or office.
- Cutting-edge technology – of all the banks, online ones tend to be most current when it comes to technology.
- Free checking – perhaps the biggest selling point of online banks. Most online banks offer free checking and don’t have stipulations on the size of the balance you maintain.
- Earning interest on checking accounts – many online financial institutions offer interest rates that are more attractive than traditional banks.
- Higher interest rates – another major selling point for online banks. Online institutions typically pay better rates on savings and CD accounts.
- Perhaps the biggest possible issue to consider is customer service. It is usually available through online chat, email and phone. If you discover an error, if your password suddenly fails or if there is a technical glitch, you don’t have a friendly local bank manager to help resolve the problem. Email, phone inquiries or online chats aren’t always the best means of solving more complicated issues. When the problems are complex, resolving issues with online banking can be a lengthy and frustrating process.
- Anonymous customer service via an 800 line means you don’t know who you are talking to, and they don’t know you either. You might get an experienced customer service agent, or someone who cannot depart from the standard script to respond to a specific issue.
- Websites crash from time to time, and online banking is no exception. If this happens to you, there is no alternative recourse. If having ready access to cash at all times is critical to your business, you might want to keep some funds in a local bank as a safeguard against banking website issues.
- Making purchases or retrieving cash from an online bank used to be notoriously difficult. Now, many online banks offer a credit card and/or a debit card that can be used at an ATM or to make purchases.
Online banking can prove to be a great option for some people; but for others, the old, tried and true bricks and mortar establishment remains the best.