As the current situation progresses, numerous countries are concerned over potentially contaminated banknotes. The U.S., for example, is making efforts to contain cash that may be dangerous and is bringing in ‘clean’ bills from abroad.
As the Fed is already pretty preoccupied with the economic fallout, banking customers are being urged to use online platforms for contact-free financial services and payments. This is in line with WHO recommendations as well as being on trend with the already established digital transformation of US banking. In 2019, 161 million Americans used online or mobile banking services – a 20% increase from 2014.
Handwashing prior to and following touching money can minimize the risks, and steps to disinfect or contain contaminated cash may likewise help the cause. But these are not the most effective solutions - the best course of action would be to switch entirely to online banking and payments.
Aside from curbing the circulation of “suspected” bills, moving to one of the best online banking companies is necessary as brick and mortar bank branches close their doors amidst government-led shut-downs to limit physical contact. While only a few bank branches are completely shuttered, most are cutting back hours and minimizing over-the-counter interaction. Even if some bank branches do remain open, the current situation mandates that people not congregate in groups - staying healthy means staying at home. And this means that if you have banking to do, it is high time to switch to online.
Switching to Online Banking
Avoid physical banking during the current outbreak by moving over to online and mobile platforms. Most traditional banks now offer online services, in addition to a new wave of online-only financial platforms, so whether you want to switch banks completely and close previous accounts, or just move online in your current bank, the choice is yours. Interested in setting up an Online Banking account? Check out our how-to article here.
Most online banks offer a complete host of services, including access to all of your accounts, anytime and anyplace, allowing you to transfer funds between accounts, pay bills, send money transfers, manage payments, credit card, and more. Plus, you'll likely be able to open an account without leaving home - a definite advantage during these trying times.
It is pretty easy and straightforward to open an online bank account - as long as you have a stable internet connection and a handful of official documents, you are all set. This is likely what you will need:
Identifying documents
- Social security
- Tax ID number
- Government-issued ID numbers with date of issue and expiration, this may be a driver’s license or passport
Contact information (can be from a utility bill or bank statement)
- Home address
- Phone number
- Email address
Financial and deposit information
- Some online banks require a minimum initial deposit to open an account
- Some online banks require a minimum balance to keep an account open
- Some online banks link to your current accounts or credit cards - you will need to provide this information in order to transfer funds into your new account
Electronic signature
- You will likely be asked to provide an e-signature to be used on official banking documents.
Once you have provided this information, it can take up to a couple of days to finalize the initial transfer of funds, but you can already start managing your account.
What to Look for in an Online Bank
With the current situation bringing a global recession and worldwide quarantine closer, getting control of your personal finances is vital. If you haven’t switched to online banking yet, then it’s time to move. As bank branches close their doors, getting all of your transactions done digitally is also about more than just convenience - it’s a matter of personal and public safety. More than half of Americans already prefer contactless online banking, with the highest usage among millennials – 92% of this demographic use online banking and close to 80% also use a mobile app for banking.
Of course, even in desperate times, you should check out a number of bank options before signing on the dotted line. Not all online banks are created equal, so choose carefully and consider the following points:
Make sure you’re insured:
Before you consider an online bank, especially if it is not a service offered by a traditional and known institution, make sure that it is FDIC or NCUA (for credit unions) insured. These agencies make sure that your deposits are protected up to $250,000, so you can rest easy knowing that your money remains safe even in tough times.
No more monthly fees:
Many online banks are able to waive monthly fees thanks to saving money on maintaining brick-and-mortar branches and employees. While some banks waive fees contingent on a minimum balance or other factors, you will likely be able to open an account without worrying about monthly charges eating into your cash. Make sure to read the fine print even if there are no monthly fees - you may be charged fees for transactions, including deposits.
Discover's online savings account, for example, has no monthly maintenance fees. The Discover online platform also doesn’t have a required minimum deposit to open an account and doesn’t require a balance to keep your savings account open, so you won’t be penalized if things take a bit of a downturn. Avoid surprises by knowing exactly what the terms are before picking your new online bank.
Earn more on your money:
Since online banks save on overhead, they often offer significantly higher interest on savings than traditional banks. A little comparison shopping will go a long way in helping you maximize your savings. One online bank that offers high yields is Barclay's online savings account. During uncertain times, putting some money aside is a good idea. With some of the highest APY rates on the market - as high as 1.60%, no minimum balance requirement (although no balance means no interest), and a user-friendly dashboard to help you manage your accounts, Barclays is a good option if you have some extra cash and want to make it work for you.
Hassle-free online access:
The biggest perk of online banking is being able to manage your finances anywhere, anytime. But this can be a big hassle if the bank's online dashboard or mobile app isn't user-friendly. Take a few minutes to navigate the platform to see if you'll be comfortable with it before you commit. While for some traditional banks, offering online features is not top priority, for next-generation online-only platforms, this is the driving force of the business model.
Chime, for example, boasts a full-featured desktop dashboard and an equally-endowed free mobile app to help you manage your finances without frustration. All of your banking details, including credit cards, external bank accounts, and investment portfolio details are displayed clearly, and Chime makes it simple to set up automatic payments and check scanning - all from the comfort (and safety) of your home.
Explore Leading Online Banks
1. American Express
With one of the highest APYs around, American Express savings 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.
Pros | Cons |
|---|---|
|
|
2. Varo Bank
Varo Bank is a hybrid online and mobile bank. It offers online banking and savings accounts plus cutting-edge banking services like early direct deposit, phone notifications, and the ability to connect other financial accounts to manage your money in one place.
Pros | Cons |
|---|---|
|
|
3. SoFi® Checking and Savings
SoFi®* is a hybrid online and mobile bank offering high-interest checking and savings accounts. Key features include early direct deposit, no account fees, and access to an extensive ATM network. The user-friendly mobile app provides tools for automatic savings, financial insights, and peer-to-peer payments, ensuring all banking needs are met in one place.
| Pros | Cons |
|---|---|
|
|
Summary
In the difficult days we are facing, banking should not be another burden. Moving to online banking is an easy way to minimize physical contact and streamline your financial management. With a wide range of options available, check out reviews and features before committing to ensure you get the services you need.
Still haven't decided? Check out our reviews page.
*SoFi Disclosure
1. Up to $300 Bonus Tiered Disclosure
New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.
SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
2. APY disclosures
SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn
1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
3. Fee Policy
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
