Thinking of an Online Only Bank or Credit Union? Think Again.
With our world becoming increasingly more reliant on technology and the internet, every single day we make decisions about whether to do things “behind our screens” or “in real life.” Whether it is shopping for a new pair of shoes, catching up with an old friend or even banking, there are options available to do all of these things at the convenience of your fingertips.
In 2017, 46%* of banking customers said they only interacted with their bank through digital channels, so it’s not surprising that online only banks are trending. However, when it comes to online only banks and credit unions, you may want to ask yourself a few questions before giving up on your brick-and-mortar institution. For any people, the services offered by traditional institutions like Piedmont Advantage Credit Union can’t be easily replaced, so it’s important to compare the differences before you make the switch.
What is the difference between online banking and an online bank?
Online banking includes a suite of services to take care of your money – from transferring funds and depositing checks, to paying bills or paying a friend– all by way of the internet. Most financial institutions like Piedmont Advantage Credit Union offer online and mobile banking, while also offering the convenience of visiting a nearby physical branch location if you want a more personal experience.
An online only bank or credit union however, does not have a physical branch location, so all of its services are completely accessed through their website, mobile banking app (if one is available) or via phone.
Why DO people choose an online only bank or credit union?
For some people with less complex financial needs, an online only financial institution may make sense. Here are some of the reasons they might choose an online only bank or credit union.
- Free ATMs - With an online only institution, you will typically have access to a free ATM network with thousands of locations nationwide. Many banks and credit unions are part of a nationwide ATM network as well, including Piedmont Advantage Credit Union.
- Easy and convenient - Wherever and whenever you have internet access – either on your computer or mobile device – you can access many of your digital banking needs at the click of a button.
- Less expensive - No physical branches often mean higher interest rates on savings accounts and lower fees. But, it’s best to read the fine print so you know exactly what you are getting.
Why DON’T people choose an online only bank or credit union?
Despite the allure of online only financial institutions, for many people, the pros don’t outweigh the cons. Some of the drawbacks of digital-only banks and credit unions include:
- Lack of Personal Service - Sometimes you have a need for someone to answer your questions in person when you need help. With an online only bank or credit union, you will have to rely on online-only help via chat or email, or by phone.
- Limited Products and Services – Online only banks and credit unions don’t typically offer the breadth of products and services that traditional brick and mortar institutions offer. Common needs like exploring home insurance coverage options or financial planning for college not always be available through an online only banks or credit unions.
- Cash Depositing Difficulty - Because there is no physical location to visit, it can become difficult to make cash deposits. Sometimes, online banks and credit unions require money orders to get the cash into your account, which can be a hassle. So, if depositing cash is a need, this is something to be aware of.
- Check Twice for Checking - Some online only banks or credit unions do not offer checking accounts. Typically most consumers need a checking account, so if that’s a must-have on your list, make sure to investigate furthe At Piedmont Advantage Credit Union, we offer a range of checking options including Simple+ Checking, Basic Checking, Interest Checking, and Silver Advantage Checking.
The steady rise of online only banks and credit unions has increased competition in the financial world and offered another financial choice to consumers. So aligning your individual needs and values with the pros and cons of both options will help you decide which type of banking institution is best for you.w