When it comes to finances, there are a lot of options to choose from. You can go the traditional route with a brick-and-mortar bank or you can take advantage of the many online banks that are available today.
If you’re like most people, you probably do a significant amount of your banking online. And while there are many reputable online banks to choose from, not all of them are created equal. So how do you choose the best one for your needs? We’re going to look at some tips to help you decide.
Why Choose an Online Bank Instead of the Traditional Brick and Mortar Bank?
There are several reasons to consider an online bank over a brick-and-mortar bank. In fact, there are so many reasons that it’s hard not to switch to an online bank these days. Here are just some of the main reasons why online banking is becoming increasingly popular:
- You can do everything from your computer or other mobile devices.
- You can typically get better interest rates on your savings and checking accounts.
- If you live in a rural area or smaller town, an online bank might be the only option available to you.
- You don’t have to deal with long lines or wait for a teller to assist you when making a deposit or withdrawal.
How to Choose Your Online Bank
Now that we have a better understanding of why it might be in your best interest to consider an online bank, let’s take a look at some tips that will help you choose your online bank.
1. Only Use Trusted Banks
Every day, there are new Internet scams that try to lure unsuspecting victims into handing over their personal information and even their money. The last thing you want is for someone to steal your identity or drain your bank account because you trusted the wrong person or company.
So how do you know which companies you can trust? One way is to check with the Better Business Bureau. This organization rates companies based on how they conduct business and whether or not they resolve complaints in a timely manner. If a company has an unsatisfactory rating, avoid doing business with them.
2. Look for FDIC Insurance
FDIC stands for Federal Deposit Insurance Corporation. The corporation is an independent agency of the United States government that was created in 1933 to restore public confidence in the nation’s banking system following the Great Depression by insuring individual bank accounts up to a certain amount.
In the wake of the Great Recession, many people lost a significant portion of their savings when major banks failed and closed their doors. But because these banks were FDIC insured, every depositor got every penny back from the insurance corporation even though they lost access to it for a time.
As long as your online bank is FDIC insured, you can be assured that all of your deposits are safe and secure.
3. Consider an Online Bank with a Reputation for Good Customer Service
It’s important to choose an online bank that offers excellent customer service. Otherwise, if something goes wrong (which is rare), you may not be able to get it corrected. And without quality customer service, you won’t know if the bank is working on your problem or trying to resolve it.
Just like traditional brick-and-mortar banks, there are online banks with great reputations for customer service and those that don’t have them. So whatever bank you choose, make sure they have a good track record. Be sure to do your research before opening an account with any online bank. By doing this simple task, you’ll greatly reduce the likelihood of becoming a victim of fraud or identity theft.
Resources
https://current.com/blog/pros-and-cons-of-online-banks/
https://www.forbes.com/advisor/banking/best-online-banks/
https://www.nerdwallet.com/article/banking/best-online-banks
