The digital transformation of many industries and businesses, especially those that rely on in-person services, happened as a direct response to changing customer behaviors and preferences. The online tools that were created offer consumers the flexibility, convenience, and efficiency they craved in their day-to-day. What's more, these online services can often charge cheaper rates than their traditional counterparts thanks to lower overhead costs.
Online banking is a prime example of this movement, providing a convenient and secure way to manage your money from anywhere, at any time. Many of these financial institutions operate entirely online, without the need for physical branches, though some still offer a combination of both. Find which style the top online banks provide with our comprehensive comparison list:
These are the 10 key features that make online banking an excellent choice for modern money management:
- High yield accounts
- User-friendly online and mobile banking
- Low or no fees
- Faster access to money
- Quicker service
- Cutting-edge digital tools
- Security and protection
- Fee-free ATM networks
- Rewards and perks
- Innovation and flexibility
In this article, we'll explore how these 10 key features of online banks work together to save you time, money, and hassle in your routine financial activities.
High Yield Accounts
The lack of physical locations for select online banks often means lower operational costs, allowing them to pass the extra savings to customers through higher interest rates on savings and checking accounts. Many online banks offer up to 4% Annual Percentage Yield (APY) on savings, while the national average APY for savings accounts is only 0.06%.
User-Friendly Online and Mobile Banking
Digital services and mobile apps provides a user-friendly way to view accounts, review transactions, pay bills, transfer money, deposit checks, and so much more. Consumers can set up alerts and notifications to monitor account activity and security. Plus, some online banks have virtual assistants that can help you with your banking needs.
Low or No Fees
Oline banks typically charge lower or no fees than traditional banks because they don’t have to maintain physical branches and ATMs. You can often avoid monthly maintenance fees, minimum balance fees, overdraft fees, foreign transaction fees, and more that eat into account savings over time. Many even offer fee-free overdraft protection up to $200 so you can enjoy more flexibility and control over your finances month-to-month.
Faster Access to Money
Process money transfers faster than traditional bank thanks to the strong electronic networks and systems that online banks utilize. Send and receive money instantly instead of waiting long periods of time. Many banks have built-in digital wallets and peer-to-peer (P2P) payment services for a simpler exchange of money with friends and family.
Quicker Service
Eliminate the hassle and time of dealing with paperwork, waiting in line at the bank, or being put on hold on the phone. You can open an account, apply for a loan, or update your information all online, without having to visit a branch or mail in documents. What's more, many companies offer round-the-clock, 24/7 customer service support, so you can speak to a customer service representative however you prefer: online, over the phone, or simply by chat.
Cutting-Edge Digital Tools
Online banks offer tools and features that can help you manage your finances more efficiently. Enjoy free access to digital spending and budgeting tools to set monthly or yearly spending targets and track money habits. You can also access your credit score and financial products, such as loans and lines of credit, to improve your overall credit health. To help you reach your financial goals faster, some online banks even offer personalized advice tips, and mobile app features that can be tailored to your individual needs.
Security and Protection
In order to protect your financial and personal information, online banks utilize advanced encryption and authentication technologies. You can also find features such as fingerprint sign-in, card lock/unlock, and two-factor verification to enhance your account security. Similar to traditional banking, reputable online financial institutions are insured by the Federal Deposit Insurance Corporation (FDIC), which means your deposits are protected up to $250,000 per depositor, per institution, in case of bank failure.
Fee-Free ATM Networks
Select online banks may not have their own ATMs nationwide. When this is the case, the banks regularly partner with other companies and networks to provide access to thousands of surcharge-free ATMs all over the country. Using your debit card or mobile app, you can withdraw cash, check your balance, or deposit money at these ATMs without paying an out-of-network fee.
Rewards and Perks
The competitive cash-back rewards and perks offered by online banks can save you time and money, significantly enhancing your overall banking experience. Get cash-back on your purchases, discounts from merchants, and additional benefits, including: travel insurance, roadside assistance, and cell phone protection. These rewards are often applied at the end of your first year.
Innovation and Flexibility
Online banks are constantly innovating products and improving services to meet the changing needs and preferences of their customers. When customers wanted simpler, seamless service, banks began offering cutting-edge digital features and functionalities, such as biometric authentication, voice banking, and robo-advisors, that can make banking easier and smarter. Online banks are also better equipped to adapt to changing economic situations and circumstances, e.g. the Covid-19 pandemic, to provide the quickest relief and support to customers in times of confusion and uncertainty.
Get Started Today
Online financial services provide a convenient, cost-effective alternative for managing money on a daily basis. This shift to online operations isn't new, with countless in-person services embracing digital tools and platforms for enhanced customer experiences. The features and benefits of online banking make it an excellent and even superior alternative to traditional banking, with added safety, security, greater financial control, and a potential for increased savings + lower fees. View this year’s top online banking services to enjoy the latest competitive APY rates, account deals, newest online features, and more, when you begin banking online today:
