With internet use increase, we are no facing a large dilemma. Should we move all our transactions online? Can internet banks be trusted? We are working constantly with online transactions, but can you put all your savings into an internet bank and know surely that the money will remain safe.
We are going to discuss some of the differences between regular and internet banks, so keep on reading.
When you decide which bank you want to choose, it always starts with figuring out the type of institution you want. Do you want a “regular” bank with a physical location or an online bank like Ibanbit about which you can read more on wibestbroker.
What is the main difference?
Both types of banks offer you online access to your account and transfer money or finish some other things on your online banking platform. They both have the same laws and regulations, and security is their utmost priority.
The main difference is that online (or direct) banks often offer lower costs and better interest rates. In contrast, institutions offer you face-to-face consultations, and maybe that can make you more convinced that the bank is right, plus they have ATMs, which is still not a regularity for online banks.
How it all began
Internet banking started way back in the 1990s because traditional facilities were looking for various solutions to offer a better experience and more comfortable options to their clients. Early efforts were limited but successful, so over time, many banks expanded their presence on the internet, becoming what we know now as “e-banking.”
Consequently, this led to internet-only banks. The catch was that they would also offer online banking and various services but without the central institution. The first completely functional online bank started working in 1995. They offered reduced fees and higher interest rates because there was no “main head” above.
Internet Banks Pros
There are a variety of advantages to online banking, and here, we are going to discuss a few, and why almost 60 percent of the population has some form of online banking when it comes to their finances.
Since there is a lack of overhead, internet banks can offer you higher interest rates, making a massive difference for your budget, especially long-term. Many of them include high-yield savings accounts, including certificates of deposit, and they won’t charge you an additional fee if you decide to withdraw your money early. This will keep you from giving money in vain and will make you able to be flexible with your accounts. You also have the privilege of making direct deposits or paying with a debit card.
Better Tailored Online Experience
No matter how many traditional banks are trying to invest in the marketing and digital presence, direct banks are still way ahead of their game. They have mastered the way of online banking experience, and that should be expected since it’s their primary way of promoting themselves and giving their customers the best experience. Traditional banks still lack the speed and simplicity online banks have.
Internet Banks Cons
Like with any institution, internet banks are not perfect, and we can name a few “flaws” which can mainly apply if you like being in direct contact with people when it comes to money and talking about your finances.
No Personal Contact
If you’re a regular at your physical bank, then it’s likely that you’ll get to know their workers better, which can lead to better service or simply somebody being kinder to you and more patient. Also, if they see that you are faithful customers, they can give you some benefits if your situation suddenly changes, because they already know you. This is not the case with internet banks.
For some people, this is a major deal. Sometimes having the time to go to a bank and talk to people there gives you all the security in the world. Also, correcting some mistakes is a lot easier when you can go and talk to someone in person. They will do everything to make sure everything is back the way it was before.
Transactions are not that flexible.
Surprisingly, international transactions may be more difficult with some internet banks, so we recommend checking the bank’s policy first. It takes some time for the money to withdraw, process or send but that is the case with all internet banks. You need to plan exactly what action to make
ATMs don’t exist everywhere
Internet banks don’t have their ATM, so you usually have to take money from any random bank’s ATM. The problem is, few internet banks will pay for the fee – it usually takes a lot for the amount you withdrew. Some banks have refunds, so check for that and review the limit of the ATM transactions you can make for free every month.
Both types of banks have their advantages and obstacles. It all sums up to you and your preference – whether you are more inclined to do everything via the internet or go to institutions whenever you need to finish some more significant business. It is still worth considering how much lower internet bank fees offer you even trading accounts and cryptocurrency wallets.
There is a choice where you can take the best of both worlds – if you still want to have a person you can talk to, even though there is 24/7 online support that internet banks offer, you can open a small account in a bank you deem trustworthy and have an account online as well. That way, you can have everything on your phone, on the internet in one place, including your trading account or whatever additional type of account you have. You will still be able to talk to someone more knowledgeable face to face when it comes to finances and dilemmas you can have.