When opening a new checking or savings account, deciding between an online bank or an “brick-and-mortar” bank can be a tough decision. While many people assume they need a local branch, banks with online accounts have been chipping away at the advantages of local branches, offering services and features that compete with services you could only find at your local branch just five years ago. Starting a new relationship with a financial institution is a big decision, and it’s important to consider the accessibility, features and fees of your new bank or credit union before you sign that agreement.
Until recently, to deposit a check into an online checking account, you had to mail your checks to the bank. “Remote Deposit” or “Deposit by Image” is a service which allows you to deposit a check by sending an image of the check to your bank. You do not need to deposit the paper check, in fact, most of the time, the paper check is no longer needed and can be destroyed. There are two clear benefits of this service — you do not need to physically go to the bank to deposit a check, and the process of crediting the check’s amount to your account begins immediately after the digital deposit. Some banks even immediately credit a limited amount of the check to your account, like some banks already do with ATM deposits.
ATM Fee Rebates
ATM fees are generally so complicated, people want to avoid thinking about them altogether. They need to find the nearest bank when they’re out, or make sure they go by their bank every Friday to withdraw the amount the need for the weekend. With ATM Fee Rebates this is no longer necessary. It’s as if any ATM is your banks ATM.
Usually, you are charged two fees when you withdraw money from an ATM that doesn’t belong to your bank (a “foreign” ATM) — first from your bank, second from the ATM company. But often these fees subsidize many services of brick-and-mortar banks including branch maintenance and staff. To add to their appeal, online banks take advantage of these extra costs that they don’t have by first, charging nothing themselves for withdrawing from a “foreign” ATM and then rebating back to you the amount the ATM fee charged by the foreign ATM. While these rebates may take a few weeks to be rebated back to your checking account, you are, in effect, not charged anything for withdrawing money from any ATM.
Well, almost any ATM. If you withdraw money in a different country, exchange fees still apply usually, and some ATM Fee Rebate programs have limits, like only rebating the first 5 withdrawals each month. But, as these rebate programs are offered by many online banks (not all), this can be a great way to have access to your money.
If the online bank does not offer ATM rebates, undoubtedly they provide free access to ATMs that are affiliated with a network like “Allpoint” or “Star.”
Higher Interest Rates
If you are the type of person who wants to earn top interest on every dollar in the bank, online bank accounts — both checking accounts and savings accounts — are the way you want to go. While rates for both these days aren’t very high, you can still earn around 3 times as much interest with an online account as you would with a normal bank account.
Online Banks Listed in FindABetterBank
There are many online banks. Currently, we list 4 that we think offer a great alternative to traditional banks and credit unions: