Internet banking used to mean using online services with your traditional bank. However, some have reshaped that definition by creating banks that exist only online. These banks have appropriately become known as Internet banks.
Internet banks may not have bricks, but they do attempt to offer the same service as corner banks. Now that banking is available solely as a virtual process, you must understand the advantages and disadvantages as compared to a brick and mortar bank, especially if you’re heading off to college.
- Internet banks are a viable option to traditional banks.
- Internet banks have many advantages.
- They also have some turnoffs.
- There are a few ways to deposit a check using an Internet bank.
Internet Bank Pros
As a student, the most important difference between an Internet bank and a traditional one is their convenience and accessibility. Internet banks are open 24/7 and are accessible from your dorm, out of state or out of the country.
This means no worrying about commuting to a local branch (if there is one) during restrictive banking hours, no lines to wait in and less physical handling of your money. Everything can be done online or through your smartphone.
Internet banks are also fast and efficient. You have access to all of your accounts (CDs, savings, checking, etc.) from one site, and can execute and confirm your transactions just like at an ATM. Most online banks also offer special tools like account aggregation, stock quotes, rate alerts and portfolio management.
Furthermore, because Internet banks are paperless and have almost no overhead they often are free, provide higher yields and charge lower fees. It costs nothing to open a checking account with most Internet banks, and you will earn a higher APY with fewer fee obligations, simply because your banking is performed entirely online.
For a student it seems like a no-brainer to bank online when you consider its convenience on top of all the other perks. But of course, there are many reasons people (like your parents) are wary to leave traditional banks.
Internet Bank Cons
A main reason people choose to bank at a brick and mortar bank is because of the safety and trust these banks instill. Banking online can be very nerve-racking when considering the high rate of identity theft, and few people are willing to take any risks when it comes to their hard-earned cash.
You may also be turned off when it comes to dealing with customer service. If speaking in person with a teller is an essential key to banking, then these banks aren’t for you. But even if it’s not, it can still be frustrating to not have access to live people. Some feel a sense of helplessness when they’re constantly put on hold or transferred too many times.
You must also weight the disadvantages of not having any local ATMs or branches, which changes the methods of depositing and withdrawing money.
Like normal banks, most Internet banks will apply a surcharge when using a foreign ATM. But unlike normal banks, Internet banks do not have branches of their own to justify the charges, and it also makes depositing checks a bit more of a hassle for some. (Most Internet banks reimburse a certain amount of ATM withdrawals.)
Think about the option of utilizing a normal checking account for quick cash and leveraging an Internet bank account for its superior rates.
Depositing a Check
To deposit money you can request deposit slips from your Internet bank and simply mail in your endorsed check with the slip. Expect it to appear in your account within four days. You can also make deposits using certain ATMs, or simply sign up for direct deposit.
Opening an Internet bank account can be intimidating and even worrisome, but they are superior to traditional banks in many ways. As a student, the key is to weigh the pros and cons to see what fits into your lifestyle.
- Internet banking may be a better option than using a traditional bank.
- Advantages include convenience, accessibility, efficiency and inexpensiveness.
- Disadvantages include questionable safety, lack of ATMs and spotty customer service.
- Depositing a check can be done through direct deposit, at an ATM or using a deposit slip.