How to choose an online bank

  • Finding a good online bank is essential for managing money in the digital age.
  • Online banking can offer all the services of traditional banking, sometimes with even more advantages, such as higher interest rates for checks and savings.
  • This does not mean that online banking is perfect or that every online banking is the same. You will need to be careful with fees associated with maintaining a minimum balance or using off-grid ATMs.

Most of the traditional banks we use today tend to have robust online services, but

online banks

did it first: they are alone accessible online.

Because they don’t have the high overheads of traditional banks, they also tend to offer low-cost or no-charge services with smooth apps and websites.

But what to look for when selecting an online bank? There are a few things:

  • Basic security measures, including a secure website, FDIC insurance, and a high rating
  • Convenience, including a simple interface, robust account offerings, and helpful customer service
  • Minimal fees, including an extensive ATM network or reimbursement program to reduce off-network fees

And hey: if you find a traditional bank that offers all of the following, this might still be the best fit for you.

Basic security and protection

First of all: You want your bank to be FDIC Insurance. The FDIC is a government agency that insures American banks against problems and bankruptcy. In an FDIC-insured bank, each customer’s assets are insured up to $ 250,000. This is the norm in traditional banking, and just as necessary for online banking.

Read more: Robo-advisor Wealthfront Now Offers New High Yield Savings Account With Minimum Deposit Of $ 1 – Here’s How It Stacks Up

You might also be interested in the bank rating Bauer Financial when you compare your options. Bauer Star Ratings is the financial industry standard for assessing a bank’s policies, skills, and security. Banks and

credit unions

are rated on a scale of 1 to 5 (you will need to look for a score of 4 or 5 stars). Some financial institutions may not have a rating, such as banking startups that do not have enough data to be rated. You can buy more comprehensive reports from BauerFinancial, but getting a snapshot just from star rating should be enough for most consumers.

And while it might seem obvious, take a moment to make sure your online banking URL starts with HTTPS instead of HTTP. The “S” at the end stands for Secure, which means that all communication transferred between your browser and the website is encrypted. A secure site will also have a locked lock icon in or near the address bar.

Savings account offers from our partners:

As a general rule, do not submit confidential information to a website that does not have HTTPS, especially financial information, and do not make a habit of banking over public wireless connections.

Convenience, both online and on your mobile device

According to a study conducted by CitiBank, nearly a third of Americans use their

mobile banking

app more than any other app on their smartphone. And support for banking business through mobile apps has only increased in recent years. The same study indicates that the use of mobile banking applications increased by almost 50% in 2018 alone.

While online banking almost always has websites optimized for mobile browsers, let’s be honest: you probably want to access your banking services from your phone. Read app reviews on the Apple Where google play stores and think about what services you’ll need on the go, whether it’s just checking your account balance or setting up bill payment from your smartphone.

While traditional checking and savings accounts offer no interest, it is not uncommon to find high yield chequing and savings account options among online banking – and it has the potential to make you money. Ally is probably the best known option for high yield online accounts, while some smaller online banks and personal finance tools like Carillon and Figure also provide features to make it easier to automate your savings and keep a constant flow of money into your accounts.

And finally, there are times when you’ll need to talk to a real human, not just go through all the automated systems. Look at what the banks are announcing for the different levels of customer service. If the bank does not have a 24/7 phone line and guaranteed emergency online chat, you may want to consider other options.

Conveniences like the ability to temporarily lock your card or report it as missing may seem minimal, but can also make a significant difference to fraudulent charges or other abuse, which often occurs within minutes. the theft of your card.

Low fees, including a strong network of ATMs

Look for an online bank that offers a high monthly reimbursement of ATM fees or has an extensive network of toll-free ATMs.

Ally, for example, does not charge any fees for ATMs within the Allpoint network, and will reimburse up to $ 10 for off-network charges each month. TIAA Bank will reimburse all ATM fees for accounts that maintain a minimum of $ 5,000, and up to $ 15 per month for off-network ATMs otherwise. You can also use the site ATM locator to find toll-free ATMs.

While you’re on high alert for fees, keep an eye out for additional costs like minimum monthly (or quarterly) deposit requirements, paper check order fees, membership fees, in addition to their policies. overdrafting your account or having a rebound payment.

You want your online banking to be secure, convenient, and cost-effective – and if you find a bank that ticks all three boxes, you may have found the bank for you.

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David A. Albanese