Online banks don’t have the costs associated with traditional brick-and-mortar institutions. As such, they tend to pass those savings on to customers in the form of lower fees, higher rates and intuitive digital banking products. But not all online banks are the same, and some offer better products and experiences than others.
Here are some other things to consider when choosing an online bank:
Pesky fees can quickly eat into your overall bank balance. Look for an online bank that keeps fees of all types to a minimum. That includes monthly fees, overdraft fees and ATM fees. It’s even better if the bank reimburses for third-party ATM charges. Analyze your banking behavior to figure out which fees you need to worry about most. You can often avoid fees with the right bank.
If you’re looking to get the most for your money, find a bank that pays a competitive APY on its financial products. Online banks tend to pay higher rates, so do some comparison shopping to get the best rates you can.
Lower minimum deposit and balance requirements generally make it easier to maintain an account. Find an online bank with minimum requirements that meet your financial comfort level.
The online bank you choose depends heavily on the products you need. Some online banks are full-service financial institutions, offering checking, savings, money market accounts, CDs and other products. Others limit their offerings.
If having access to cash is important, look for an online bank that offers an extensive surcharge-free ATM network. Check the bank’s site to make sure there are ATMs close to your location or in the areas where you travel most.
Online banks typically don’t offer branch access, and if they do, it’s often limited. That’s why it’s essential to keep customer support in mind when shopping for an online bank. Look for a bank that offers easily accessible customer service representatives or online chat alternatives.
Digital Banking Experience:
Convenience is crucial in the world of digital banking. With an online bank, your primary interactions occur via the bank’s website and mobile app. The best online banks provide a simple online interface and highly rated mobile apps for banking on the go. Check out reviews of the mobile app on the App Store and Google Play.
Look for a bank insured by the Federal Deposit Insurance Corporation (FDIC), which provides up to $250,000 in insurance per depositor, per bank, for each account ownership category, in the event of a bank failure. At credit unions, make sure the account is insured by the National Credit Union Administration (NCUA).