3 signs you shouldn’t be using an online bank

As far as banks are concerned, the number of physical establishments is steadily decreasing as online banks attract their customers. While there is certainly a lot to like about online banking, from fee-free promises to a high annual percentage return (APY), they aren’t a great option for everyone. Consider sticking with your physical bank if any of these scenarios apply to you.

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1. You do not have a secure internet connection

If you live in the middle of nowhere without a secure internet connection, online banking probably isn’t for you because it won’t be easy to go online to pay bills or transfer funds. And if you go for online-only banking, there is often no other way to access your money. A physical bank is therefore probably a better option for you.

It is also better to use a physical bank than to try to bank online using a public wifi network and run the risk of being hacked. To avoid giving hackers access to your financial information, do not log into your online banking account on a public wifi network. Instead, stick with a private, password-protected internet connection. Or use your smartphone’s mobile network rather than wifi.

2. You often have to deposit cash or large checks.

It is not always possible to deposit money into an online bank account, although a few online banks have networks that include ATMs that will take your deposit. Still, it’s a bit more of a process of depositing money this way, and you might not feel comfortable doing it if you’re handling large sums.

Some banks also do not allow you to deposit checks over a certain amount through mobile deposit. If you get a big check every now and then, depositing it into a physical account and transferring it to your online banking might not be a big deal. But doing this over and over could get tedious.

3. You prefer to deal with someone face to face

Online banks have lower fees and better rates largely because they don’t have to pay to operate a large branch network. But the unfortunate side effect is that it’s not easy to get live help when you need it. And when you talk to someone, it’s usually over the phone or live chat, and you never talk to the same person twice.

Some people are fine with this form of communication because they rarely deal with their banker anyway. But if you prefer to work with someone who knows your name, a physical bank can offer that.

How to choose the right physical bank for you

If online banking isn’t for you, there’s nothing wrong with going with a physical institution. But physical bank accounts tend to have higher fees and lower APYs, so you need to research them carefully.

Start by looking at which banks operate in your area. You probably don’t want to drive an hour to deposit your cash or paper checks, so look for those that have branches within a reasonable distance.

Then compare the fees, balance requirements, and APYs on their deposit accounts to decide which one is right for you. If you’re stuck, see if any of them offer relationship benefits, like higher APYs for opening multiple accounts with the bank or lower interest rates on loans. Think about other bank or loan accounts you might want in the future and make sure the bank you choose offers them as well.

If your circumstances change later, you can always consider opening an online bank account at that time. But for now, focus on finding a physical bank account that checks all of your boxes.

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David A. Albanese

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