It could not be denied that online banks are beneficial in today’s fast-paced world. These banks provide high interest rates compared to a physical bank. However, high returns always come with a cost. To be able to manage your finances well, you have to be aware of the downsides to an online bank to prevent unpleasant surprises in the end. Although online banks have a lot of benefits and are considerably helpful for busy people, there are also negative things that you should consider when applying for an online account.
With an online bank, you are limited when it comes to accessing your funds and you cannot withdraw anytime you like. Furthermore, transferring funds to a more accessible bank account will take several days. It also takes a few days to deposit money to your online account. Although many online banks provide quick electronic transfers from other banks, in case you mail your deposit, it will take a few days for the money to be reflected on your account.
Some online banks allow for ATM access with other banks without a fee. Nonetheless, many will charge a fee so there is actually no free ATM choice for these accounts. Online banking may experience hardships keeping open as a stable establishment for a long time. Because of this reason, it is important to make certain that your account with an online bank is FDIC insured. Security is another concern with online banks. Although they put a lot of effort in security to protect every account, there will always be a risk involved with online banking.