If you are a good observer of the banking sector, then you may have noticed this. Online banks have been increasing in popularity over recent years. Also, you may be aware of its benefits so far. Online banks have two big benefits for consumers over more traditional banks. This revolves around the fact that:
They have either no or low fees on most products and services.
Also, they usually offer higher interest rates on deposit accounts.
Though this is enticing, there are more to online banks. In this article you shall get vital information concerning online bank. However, lets begin with understanding what is online bank.
What is Online Bank?
Online bank is also known as internet bank or web bank. It is an electronic payment system. It enables customers or other financial institution to conduct a range of financial transactions. This is done through the financial institution’s website.
Online banks are also convenient. They tend to fit into the digitally driven lifestyle that so many people embrace. They’re always open. Also, you can do almost anything you need to. This is in terms of managing your money online. Also, it is through an app.
Furthermore, they have customer service representatives who can help you when needed. However, not all online banks are created equally. Some excel in specific areas and are especially competitive.
Some Questions to Ask When Looking for the Best Online Bank
When you’re choosing an online bank, please take note. There are a lot of considerations to keep in mind. Below are some questions to ask when considering online banks:
How do you have access to your accounts and customer service if needed?
Are there any branch locations at all. If not, what are their online and mobile platforms like?
If you need to contact a person to ask a question, does the online bank make that easy to do?
What are the reviews about their customer service from current customers?
What kinds of fees are charged on accounts? Keep in mind that most online banks don’t charge any fees.
What types of accounts are available?
Also, can you do all of your banking in one place? Some online banks only offer one or two types of accounts, while others offer several.
Furthermore, what interest rates are paid on interest-bearing accounts?
The APY on a Discover Savings Account isn’t as high as what’s offered at some other online banks.
Also, there is no interest paid on checking accounts.
Here’s a step-by-step process for opening an account with an online bank:
Go to the online bank’s website. There, you’ll find a button or link that sends you to an account-opening page.
Make sure you have the necessary documentation handy. You’ll need your Social Security number. Also, you’ll need a valid form of identification. This is such as a U.S. driver’s license or other government-issued ID. Or a U.S. address for a physical residence (not a P.O. box). Also, you’ll need proof that you’re a U.S. citizen or resident alien.
Create an application login. This will also ask you to pick a username.
Pick the account type. If it’s a joint account, you’ll need the above documentation for the other account holder as well.
Fill out the application.
It is important you note this. To deposit money from another bank account to open the new one, this is needed. You will need debit card information, or routing and account numbers.
Your checking account routing and account numbers (in that order) are on the bottom of your check. However, if you don’t have another account, you still have options.
Some Pertinent Questions on the Opening Process
Can You Open the Bank Account Online, or with a Phone?
Online bank have a customer service line. You can call in to get assistance with opening an account. In many cases, you can open the account over the phone as well. If in doubt, be sure to ask as soon as you reach a customer service representative.
How Much do You Need for Your First Deposit?
Many online banks do not require that you carry a minimum account balance. Also, they don’t charge you any fees. This is the case even if you keep just one dollar in the account.
Even if there is no minimum, online bank will often ask you to start with at least $25 or more. Whenever possible, check in advance to avoid wasted time on hold.
How do You Get the Funds to the Bank?
If you have another bank account, you can transfer the money into your new account. If you don’t, it’s trickier. After all, you can’t send cash over the internet.
However, some online banks may work with you to remotely deposit a money order via their app. In that case, it’s definitely a smart idea to work with a customer service representative or online banker as you go.
How will I be able to Access my Funds once I Get them in the Account?
If you’re opening a checking account, you can usually write checks just as you would at any other bank. Online bank also have debit cards that you can use at ATMs or to get cash back at retailers. Also, you could also transfer your funds to another bank account you can access.
Online bank has better rates.
Also, online bank has lower or no fees.
There is lack of face-to-face contact.
However, it is non-exclusivity online.
There might be site disruptions online bank.
Also, there can be lack of track record for online bank.
In summary, it is important you note this. Online bank can continue to grow and expand their offerings. This occurs for the increasing number of consumers who rely on them.
Thus, using an online bank often means you’ll have more convenience. Also, you’ll earn higher interest on your balances, and you’ll pay lower fees. As online bank’s popularity continues to increase, it’s likely that more will come.
However, when opting for online bank, make sure you carry out a thorough research on them. This will guide you on, making the right choice, Also, make sure you make a critical comparison of online bank with other traditional banks. This is to help you know which is better.