It's no surprise that 80% of Americans would rather bank digitally than visit a brick-and-mortar branch. Online banking is simple, fast, convenient, and can be done anywhere, anytime. Not only do you have several banking options at your fingertips, but online banks provide all, if not more, convenient resources than traditional banks. If you are new to the idea of taking your checking and savings account fully virtual, this guide will answer all of your questions and put your mind at ease.
|Savings Account||Checking Account||Money Market Account (MMA)|
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|Debit card & check writing access||✗||✓||✓ (with federal limits)|
|Higher yield potential||✓ (varies by bank)||✗||✗|
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Q: What Are the Downsides of Having Online Banks?
A: The biggest drawback of online banking is the liquidity of your money. Yes, you can easily use an ATM to pull out a few hundred dollars, but if you need to access $700 or more same-day, that can be an issue. One way to get around this is to choose an online bank with traditional bank locations too. Chase is the best of both worlds since there is a good chance you have a Chase bank near you.
Q: What’s the Difference Between Net Banking and Mobile Banking?
A: Mobile banking is a convenient add-on for most banks. Depending on your bank, mobile banking might be limited, but most apps should allow for check deposit, account monitoring and quick bill pay. Net banking, or online banking, can refer to using your bank’s website on a personal computer rather than banking through an app. It can also refer to online-only banking where you perform all of your banking functions and purchase products via the web.
Q: Are Online Banks Safe?
A: Yes! Online banks, like traditional banks, are FDIC-insured up to $250,000. However, all banks and even credit cards with online access can be vulnerable to fraudulent conduct if a hacker gets to your account.
The easiest way to protect your account is to avoid clicking on links in any emails you receive about your bank. Scammers are notorious for sending emails that look like they came from your bank and usually make you want to click a link quickly. If you are unsure if an email is real, check the sender’s email address, not just the name. Then close the email and open up a new window and access your online bank account.
Q: How Can I Secure My Online Bank Account?
A: Choosing a unique and strong password is an excellent start to keeping your online bank account secure. If possible, enable Two-Factor Authentication. It takes longer to sign in, but offers another layer of security. Another essential step to keeping your bank account secure is to never log in to your bank account through someone else’s computer or through public Wi-Fi. If you need to check your bank account while at a local coffee shop, do it with your phone either through phone data or the app.
Online banks offer a fleet of services to help you stay on top of your money management and achieve your financial goals. Here are features you can expect no matter which online bank you choose:
Now is the time to reap the benefits of online banking. Even if you just use an online bank for a savings account, you will quickly see the perks of higher APY and have many money market accounts to select.
With one of the highest APYs around, American Express™ savings, Member FDIC, gives you an incredible edge over traditional banks. Plus, you’ll get the award-winning customer support, convenient online accessibility, and rock-solid security features that come from an industry leader like American Express™ *ˢᵖᵒⁿˢᵒʳᵉᵈ.
Aspiration is a socially conscious online financial services firm that offers users variable interest rates and gives some of its profits to charity. Aspiration is best known for its cash management accounts, where users decide their own monthly fee and earn conscious cash back.
While Chime does not resemble a traditional bank, users can reach their financial goals with this banking app. With Chime, you can choose a spending and savings account and rest easy knowing your money is FDIC-insured.
Get up to $600 with a 3% Cash Bonus Checking Offer when you open a new HSBC Premier checking account and complete the following qualifying activities. Open your new HSBC Premier checking account online by January 7, 2021; and Set up Qualifying Direct Deposits into your new HSBC Premier checking account; and then Enjoy 3% Cash Bonus, up to $600, on Qualifying Direct Deposits up to $100 per month, during the first 6 calendar months after account opening. You will automatically receive the 3% Cash Bonus in your new HSBC Premier checking account approximately eight weeks after completing that month’s qualifying activities. Deposit products are offered in the U.S. by HSBC Bank USA, N.A. Member FDIC.
Chime is a financial technology company. Banking services provided by The Bancorp Bank or Stride Bank, N.A.; Members FDIC
˜ Out-of-Network cash withdrawal fees apply. Third-party and cash deposit fees may apply.
^ Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
* Chime SpotMe is an optional, no fee service that requires $500 in qualifying direct deposits to the Chime Spending Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases initially, but may be later eligible for a higher limit of up to $200 or more based on member's Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime's discretion. SpotMe won't cover non-debit card purchases, including ATM withdrawals, ACH transfers, Pay Friends transfers, or Chime Checkbook transactions. See terms and conditions
¹ APY—Annual Percentage Yield. Effective December 9, 2020 the interest rate will be 0.50%. These interest rates are variable and may change at our discretion at any time. No minimum balance required. Must have $0.01 in savings to earn interest.
⁴ Round Ups automatically round up debit card purchases to the nearest dollar and transfers the round up from your Chime Spending Account to into your savings account. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more into your savings account.
¹Annual Percentage Yield (APY) is accurate as of Oct 1, 2021. All Varo Savings Accounts earn 0.50% APY beginning on that date. APY is variable and is subject to change. No minimum balance required to open an account. Balance in Savings must be at least $0.01 to earn interest. To earn 3.00% APY, the Varo Savings Account must meet these requirements: Account Holder must 1) receive total qualifying direct deposits of $1,000 or more to a Varo Bank Account or Varo Savings Account in the same qualifying period. 2) The daily balance in the Varo Savings Account must not exceed $5,000. 3) Keep your Bank Account and Savings Account balances above or equal to $0.00 the entire calendar month. If these conditions are not met, you will earn 0.50% APY on the Savings Account balance for that period. The Qualifying Period is defined as the first day of the calendar month through the last business day of the calendar month.
The Annual Percentage Yield (APY) PenFed offers on all its products are variable rate accounts and subject to change. The rates stated are current as of June 2021 unless otherwise noted are subject to change. The fees on your PenFed account can reduce earnings. This credit union is federally insured by the National Credit Union Administration (NCUA). Premium Online Savings account holders must agree to electronic delivery of account opening disclosures and monthly statements.