Online bank account

Online bank account

Online bank account
Online bank account

Online Bank Account

Online bank accounts offer convenient digital banking and money management via website and mobile app access. Without physical branches, online banks provide attractive features like high interest rates, low fees, robust tools and strong security. Consumers increasingly utilize online banking as their primary account.

Benefits of Online Banking

Key advantages online bank accounts provide include:

  • Higher interest rates on savings and CDs
  • Lower or no monthly account fees
  • ATM fee reimbursements nationwide
  • Full-featured mobile apps
  • Check deposits via app camera
  • User-friendly digital experience
  • Effective budgeting and money management tools
  • Easy transfers between linked accounts
  • check deposits via app camera

An online account can operate as a full stand-alone primary bank or complement an existing traditional bank relationship.

Types of Online Bank Accounts

Common online bank account options resemble traditional counterparts:

Checking – Primary spending account with debit card access. Interest-earning options available.

Savings – Accumulates interest on cash reserves. Passbook and CD varieties assist saving goals.

Money Market – Earns higher interest rates than savings accounts with easy access.

Certificate of Deposit (CD) – Locked interest rate and term provides predictable returns.

Evaluate needs to choose the optimal types of accounts. Many online banks allow linking multiple accounts seamlessly.

Top Online Banks

Leading purely online banks include:

  • Ally Bank
  • Marcus by Goldman Sachs
  • Discover Bank
  • CIT Bank
  • Betterment Everyday
  • Wealthfront Cash Account
  • Sofi Money
  • Chime
  • Varo

Study options to find the most attractive rates and features meeting your preferences. Some online adjunct accounts from traditional banks like Citi also compete well.

Compare Interest Rates and Fees

The biggest savings online banks provide is avoiding the overhead costs of physical branches. This allows paying higher interest to depositors and assessing lower account fees.

Shop rates across online FDIC-insured institutions for the highest yields on savings and CDs. Top online banks frequently lead lists of best national rates.

Also compare monthly account fees. Many online options offer low or no monthly fees while traditional banks average $12 per month just for a basic checking account.

Use online bank rate and fee calculators assessing your specific deposit amounts and activity levels. Factor both rate and fee benefits.

Evaluate Mobile Banking Tools

As online-only entities, digital banks invest heavily in user-friendly mobile apps integrating robust money management features. Assess options for:

  • Mobile check deposit via app camera
  • Budgeting and financial dashboards
  • Transaction alerts
  • Bill pay
  • Account transfers
  • Direct deposit and withdrawal
  • ATM locators
  • Credit score monitoring
  • Integrated loyalty programs

The best apps make routine banking and monitoring finances easy anytime, anywhere.

Review Access and Transfer Options

While online banks lack local branches, many provide complementary convenient access:

  • Nationwide ATM networks with reimbursed fees
  • Shared branching at credit union locations
  • Widespread acceptance of mobile payments
  • Check writing capabilities with provided checks
  • Transfers to external accounts at other banks
  • Night and weekend customer service

Look for banks easing access like issuing debit cards instantly printable at home for purchases before plastic cards arrive.

Understand Protection and Security

Online banks offer the same federally guaranteed protections against losses as traditional banks through FDIC and NCUA insurance up to $250,000 per depositor.

Robust logins, data encryption, multi-factor authentication and transaction alerts also keep accounts secure. Biometrics using fingerprints or facial recognition provide user-friendly security accessing accounts through mobile devices.

Consider a Hybrid Approach

Maintaining a local branch account in conjunction with an online bank combines personalized service and digital convenience into one optimal relationship.

Use the online bank for higher yield savings and certificates leveraging its rate benefits. Maintain the traditional bank for convenient branch and ATM access when needed for transactions.

Link the two through online transfers to seamlessly move funds as needed. Enjoy the best of both banking experiences.

Closing Thoughts

Online banking provides attractive interest rates, low overhead cost structures, strong digital tools and focused customer service without the expense of physical locations. Take advantage of benefits like ATM fee rebates, mobile interfaces, integrated apps and automation plus human support when needed. As technology expands offerings and security protects funds, consumers increasingly go online for banking convenience and value.

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