Can You Trust Online Banks?

Credit card and computer. Online shopping.

Think of all the money-related things you do online—pay your bills, check your statements, and even make deposits. Now think of the last time you went to an actual bank, whether through the drive-through or in the door.

Personally, I can’t remember the last time I went to my bank’s brick-and-mortar building. This got me thinking about online banks, or Internet banks. I’ve heard a lot about them but know very little. Something about them seemed very elusive to me, and while I never actually go to my bank, I like knowing it’s there if I need it.

So I did a little research, and it turns out online banks are completely legit—and kind of cool.

If you’re curious about online banks, here are some FAQs that can help you better understand the world of online banks.

 How do I make deposits?
To make a deposit at an online bank, simply take a photo of the front and bank of the check and upload it to the bank’s website. Many banks also allow you to do this with your phone or mobile device. You can also send your check in via prepaid envelopes provided by the bank. Or, you can have your paychecks sent to your bank via direct deposit.

Keep in mind that most online banks don’t accept cash deposits.

Where can I withdraw cash?
Many online banks allow you to withdraw cash from an ATM for free or reimburse you for the fees. This is one of the perks of online checking—no more searching all over the city for your bank’s ATM.

If you need a larger amount of money from a savings or checking account, you can request a check from your bank

Are my funds safe?
Yes. Just make sure you go with a bank that is FDIC insured. This means that your money is just as protected as it would be with a brick-and-mortar bank.

What about customer service?
Online banks have headquarters with customer service departments who will answer your questions and handle any problems. Or, they outsource customer service to an outside company. Either way, there are actual human beings you can talk to if the need arises.

How do I choose an online bank?
Choose an online bank the same way you would any other product or service—do your research. There are many different banks. Some of the more well-known include Ally Bank, Sallie Mae Bank, Discover Bank, and Bank5 Connect, all of which have high ratings. Remember, whatever bank you choose, make sure it is FDIC insured.

If you’re thinking of an online bank but aren’t sure if you’re ready to commit, you can always do both. Consider opening up an online savings account, or put your emergency fund in an online bank. You might find that you actually prefer it!

Posted in: Money

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