Pros and Cons of Online Banking

Online banking is appealing to the eyes since most have a higher interest rate then most traditional banks. These higher interest rates can lead to hundreds of dollars if you have a large amount in a savings account, yet what are the pros and cons of banking online. There are some risks and drawbacks to online banking as wells as the pros like higher interest rates.

Pros

The pros of online banking including the discussion of high yield interest rates we have already talked about. Since the overhead with online banking is lower then a traditional bank, they have the ability to over higher interest rates. With no branches, tellers, mangers, or even a clean staff to pay for, the expenses of a online bank are much lower and the savings they have is passed along to their customers. Online banks have very sophisticated websites since 99% of the communication is done through the website. They have plenty of features and a quick response time. Lastly, opening an account with an online bank is easy and you don’t have to wait for a bank to open to be able to do it. You just simply log on and complete whatever transaction you wish to do.

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Cons

On setback of a online bank is their website can go down. Although it isn’t a very often happening, it can happen which leaves you using the phone or waiting to complete your transaction. If you are one you loves talking to someone face to face, especially when there is a problem, then you won’t be able to do it with an online bank. This face to face interaction is important to a lot of people when it comes to loans, mortgages, or car notes vs. doing it online. Lastly, while their saving accounts are higher, their certificate of deposit rates are lower.

All in all, the idea of a higher savings account rate makes them very appealing and are probably great for savings accounts since you are just depositing money into an account and letting it sit, but for everyday transactions, I am not so sure that I would be okay with not being able to go down to the bank and talk to someone. As an everyday bank, an online bank wouldn’t be for me, but then again it might be for you.