Should You Switch to Online Banking?
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Money in the 20s is a blog about personal finance, investing, the economy and business school. |
I’m a huge supporter of online banks and the idea of switching to online banking. I often promote this on my own blog and whenever I talk to young people about finances. The world is going digital and I feel that you need to get on board.
Today I wanted to tell you why you should switch to online banking right now.
More money to yourself.
My checking account with ING Direct has unlimited transactions. I can transfer my money and use my debit card as many times as I want without worrying about getting hit with some “system usage fee” or whatever your bank calls it. I still remember when I was 18 I got hit with ridiculously high usage fees for like three months in a row. It got to the point where I preferred to use my credit card over my debit card.
With a completely free checking account, you can save money and also earn interest. That’s a win-win scenario if you asked me. At the end of the day I’m all about keeping more money in my pocket if it’s possible. With online banking, you save yourself at least $10 a month by going digital.
Less hassle.
I don’t care for hassle. I recently experienced a very annoying problem with my traditional checking account. I have an account open at the local bank just to deposit checks I get from online work. It’s free under a certain amount of transactions.
This is what happened the other day with my local bank…
I went in on the 1st of the month to deposit my tenant’s rent check for $1,400. No problem, right? A standard transaction. I checked the day after my mortgage payment was due to find out that my account was in overdraft! I’m a personal finance blogger. I don’t let my account get into overdraft! I freaked out. I called the bank to see what was wrong. It turns out that the teller deposited a $1,400 check as $140. Yes, she missed a whole digit. Simple to solve issue. Well, not really. It has been about two weeks and the issue hasn’t been resolved yet.
That’s just one example of hassle. I enjoy online banking because I do it from wherever I am. The best part is that now ING Direct does check scanning so that you no longer have to wait to deposit your checks.
Create sub-accounts.
I prefer to create separate accounts for my various money-related goals. ING Direct (and most online banks) allow you to setup sub-accounts with your own custom labels. I use this to plan for my expenses.
For example, I have a “travel” account along with an “online income” account. With the travel account, as you may have guessed, I use it to prepare for trips. With the online income account I track what my income from the Internet is. Pretty sweet.
That’s why you should switch to online banking in my humble opinion. I understand that if you have a relationship with your local bank you might not want to switch. In that case, I suggest that you keep the savings account open and try out an online checking account to see what the hype is all about.
