The Positives and Negatives of Online Banking

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Source: Thinkstock

Source: Thinkstock

Online banking has become a popular way to manage and keep track of money, and there are many positives and negatives to online banking. Some consumers are tired of all the changes that affect bank branches, including the fact that many banks are now getting rid of free checking. Of course, online banking isn’t immune to the many of the same issues that customers face with local banks or bank branches. Many banks now offer online banking, so if you bank with a national chain, your bank probably already has online banking. However, strictly online banks don’t have to pay rent or pay people to answer the phones or help customers, which helps cut costs. This isn’t to say that the best banks are those that only offer online banking, although that is an option. There are positives and negatives to online banking, whether the bank also has local branches or not.

According to the FDIC, if you are considering online banking, you need to take a few steps to make sure that you are trusting a reliable site. First, be sure that the online banking is legitimate and that your deposits are insured. Regardless of whether you are choosing a bank that also has physical offices or you are choosing a bank that only offers online banking, make sure you are using a legitimate site and not a phishing site or a fake bank. Look for the FDIC logo or statement saying that the bank is insured; you can also check if the bank is insured here.

There are many positives to online banking. Often, online banks have better interest rates, and also mortgage rates. Another advantage is that you can check on your account balance very quickly, and it doesn’t matter what time you log on. You can also transfer money at any time of the day, and usually if you transfer money between accounts, you can see the change immediately. You also have the advantage of opting out of paper statements if you want to; this can be done regardless of whether or not your bank has a branch office.

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