As time goes by, it is becoming more and more common for us to do our banking online. However, many consumers stick to traditional brick-and-mortar banks, either out of ignorance or fear. Unfortunately for them, many companies are closing branches, creating banking deserts and fewer physical options to go to. That’s why, Now they are wondering if it is time to switch to digital optionsFor those who are undecided, we will explain what each of the banking options offers you so you can make the most informed decision regarding your financial needs.
An online bank bears his name because Its financial services are offered solely and exclusively through electronic and digital means.They have no branches or physical presence.
Most popular online banks in the United States are Discover, SoFi and VaroThese online institutions have bank charters and deposit insurance and may offer deposit accounts such as checking and savings accounts and sometimes lending options such as credit cards.
As you see, They offer virtually any financial service or product that a traditional physical bank could provide..
These options have become popular among consumers, especially younger ones, because Many do not have rates.
With the advancement of technology, other types of companies have emerged that also offer banking services and products without being banks in themselves or officially. Fintech, a word that is a combination of the English words “finance” and “technology”, They can also provide some financial productssuch as credit cards and savings accounts, in association with one or more banks insured by the Federal Deposit Insurance Corporation (FDIC).
An example of fintech is Chimea company whose banking partners are The Bancorp Bank, NA and Stride Bank.
What is a traditional physical bank?
A traditional physical bank is those companies that They have physical branches for customer service as their main featureThey offer different financial services and products and the money is protected by the FDIC.
The largest traditional banks in the United States are Chase, Bank of America, Wells Fargoamong other recognized companies.
On many occasions, These banks charge maintenance fees to their clients in their checking and savings accounts, between $5 and $25 dollars per month. These charges are usually justified by the fact that they have high operating costs, including branch maintenance and salaries.
Traditional bank vs. online bank
The decision between a traditional bank and an online bank is purely a personal matter based on the needs of each consumer. For example, if a person values the attention of a face-to-face agent, a physical bank is for you, even if they are becoming extinct. On the other hand, if you know and can carry out your transactions digitally, such as online shopping, paying for services, among others, perhaps an online bank would be better for you.
One of the biggest complaints about an online bank is that without physical branches, you are forced to rely on other methods of communicationsuch as telephone support, email, chatbots or online forms.
Many online banks also do not accept cash deposits, precisely because of the lack of branches or commercial alliances.
Meanwhile, a point in favor of These digital options are that they usually offer higher rates of return. that traditional physical banks do not charge maintenance fees or high costs on loans and credit cards.
These are the types of features that you need to consider when choosing between a physical bank or an online bank.
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