Open a Bank Account Online

Every day of the week thousands of people open a bank account online, either through an existing offline bank or through a bank with which they’re already familiar. We’ll compare the benefits of online bank accounts with offline banks to see if the switch is really worth it. We think it is.

Benefits of banking online
There are several benefits to opening a bank account online, most of which result from the lower operating expenditures online banks encounter in servicing customer accounts. Since most online banks have only a handful of phone lines, and absolutely no tellers (it’s all online!) it would make sense that customer accounts wouldn’t be all that costly to maintain.

As a result, online banks tend to provide their customers with greater online services while complementing these services with fewer fees and higher returns for savings accounts and money market accounts. One of the largest benefits that comes with an online bank account is free checking, which in an era of declining bank revenues are becoming hard to find. This service alone is worth as much as $120 per year at the typical rate of $10 per month!

Lower rates for loans, especially on personal loans for cars, or small cash loans usually have lower rates than do other, offline banks. Again, this benefit is tied to lower operating expenses and better management of accounts with fewer personnel.

Downsides of online banking
Customer Service – Because you’ll be banking online, don’t expect to be able to interface with banking staff for small problems or issues. Where you might be able to walk into a traditional banking office to speak to an account representative face to face, online banking establishments are notorious for having outsourced call centers with limited control over their customer’s accounts. Be advised that this isn’t always the case, but in order for online banks to run less expensively, they do have to cut somewhere.

ATMs and Cash availability – Another difficulty in online banking is accessing your money. While banks are more than happy to issue debit cards to their customers, accessing cold hard cash isn’t always so easy. This is because many online banks have very weak offline infrastructure and while some offer rebates for ATM charges at other banking institutions, many offer very little value for customers who wish to spend cash rather than swipe a card.

You May Still Need a Traditional Banker – Analysts have noticed that even despite a massive shift toward banking online, most customers are likely to open two accounts rather than have a single account. In doing so, they can keep most of their cash assets in online banks where the rates are better and they receive the maximum returns for their money, while they also maintain an offline account for customer service issues and benefits like ATM networks and convenient check-cashing or other services. Plus, with the advent of electronic funds transfers and ACH deposits, moving funds between accounts is as easy as clicking a button online.

Opening an online bank account
When you’re ready to make the switch to online banking, consider first the option of working with the bank with which you’ve already formed a relationship. In doing so, you’ll avoid the hassle of verifying again your credentials and filling out the paperwork necessary to open an account.

However, if time isn’t of very serious concern, seek to shop around for an online bank willing to pay you for your business as there are several. It is routine to see online banks (which don’t have the marketing of having thousands of open offices) to offer new customers $25, $50 or even $100 for opening a new account!

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