Online banks are great in today’s fast-paced world. These banks offer high rates than a typical brick and mortar bank. Nevertheless, high returns do not come without a cost. You have to be aware of the drawbacks of online banks to avoid ugly surprises later on. While online banks have several benefits and are extremely helpful to people on the go, there are also negative things that you should not overlook when considering an online bank.
First, with online banks, you have limitations on accessing your funds and withdraw anytime you wish. Moreover, fund transfers to a more accessible account could take a few days. You may also find that it will take several days to deposit funds to your online bank account. While most online banks offer fast electronic transfers from other banks, if you have to mail your deposit, it could take a few days to see the money reflected on your account.
Some online banks will let allow ATM access with other banks without fees. Nevertheless, most will charge a certain fee so there is no free ATM option for these accounts. Online banks could experience difficulties keeping open as a stable bank for a long period of time. In this regard, it is necessary to ensure that your accounts with the online bank are FDIC insured. Moreover, an online bank could have security concerns. While they put a lot of security in place in order to protect your account and money, there is always a risk with banking online.