Banking

The Good and the Bad of Online Banking

Online banking is an up-and-coming method of handling your finances. Many traditional banks offer online banking. It’s commonly used to keep track of expenses, pay the bills, and even deposit money. Brick and mortar banks offer online banking for your convenience.

Nowadays, more online only banks are popping up. This means that there is no brick and mortar building because everything happens online. While there are many perks to using online banking, there are also some cons that you need to be aware of. Depending on your personal needs and how you prefer to handle your money, you may choose to switch to online banking. Or you may continue to use your traditional in person bank with its online banking. Let’s take a look at the good and the bad of online banking.

Pros

Less likely to spend cash

Because online banks don’t belong to a building, this also means that they are not connected to as many ATMs. This will make it more difficult to go to the ATM and take out cash, which means that you’ll end up spending less money.

Better interest rate

Some online banks pay a higher interest rate when compared to brick and mortar banks. This is beneficial if you’re looking to make the most out of your savings account. Paying higher interest means more money in the bank!

No physical bank

Online banking is quick, easy, and done from the comfort of your own home computer or mobile device. You won’t have to go to the bank in person and complete a transaction from there.

Convenience

Because online banking involves your computer or mobile phone, it’s incredibly convenient to pay bills or check your balance this way. Another benefit is that you can get your direct deposit checks a few days earlier than if you deposited it at the bank. It’s one less step to getting paid than if you had to use your traditional bank.

Can check on the go

Open up your phone and check your balance. This is great if you’re sticking to a strict budget and need to keep an eye on your expenses.

Cons

Security breach

Because everything is done online, this also means that there’s a more likely chance of a security breach. Choose an online bank that has tons of security protocols and is very trustworthy.

Standard password

Having an online bank may make you more susceptible to choosing simple passwords for your accounts. Keep in mind that to protect yourself and your funds, choose strong passwords to prevent theft.

You may lose your phone

If you lose your phone with your online banking information on it, this may make it easier for someone to steal your information. Always have an extra password on your phone and an additional one on your online banking app to prevent anything bad from happening.

No physical bank

No in-person interaction means that if something were to happen to your account, you’d have to contact their customer service with a phone call. And because it’s not in person, it might take a long time to see any changes you wish to happen on your account. If you belonged to a traditional bank, it would be easier to sit down with someone at the bank and discuss any questions you have.

Whether you wish to switch to online banking is up to you and your personal preferences. You’ll have to decide if the pros outweigh the cons and ultimately make a decision based on what suits you best. Online banking isn’t for everyone, but if you’re someone who’s always on the go and strives for convenience, then online banking may suit you best.

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