• Thu. May 19th, 2022

85% of people prefer banking online or with a mobile app: what are your best options?

It might be hard to imagine these days, but internet banking didn’t exist until the mid-1990s. Before that, if you wanted to do any type of banking, you had to call or visit branch. But even with the convenience brought by online banking, it has taken some time to achieve widespread acceptance. Some customers worried about the security of online transactions, while others still preferred the personal touch and handling that comes with a branch visit.

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By December 2021, however, it appears that those concerns have mostly been dropped. According to a GOBankingRates survey of 1,335 Americans that month, just over 14% preferred banking through a physical branch or ATM, while nearly a third of respondents, 31%, preferred banking services. online banking through a web browser. Perhaps the biggest sign of the times is that more than half of respondents – nearly 55% – prefer banking through a mobile app. If you’re like over 85% of Americans who prefer banking through a web browser or mobile app, here are five of the best online banks that might suit your needs.

Allied bank

Ally Bank traces its history back to 1919, when it began as GMAC, the financial arm of General Motors. In 2009, the company rebranded itself as Ally Bank and went fully online. Since 2022, Ally Bank has ranked among the best online banks available, offering a wide variety of user-friendly features. Ally Bank has no account minimums and charges no fees on its deposit accounts, and in 2021 it also eliminated overdraft fees for good.

Yields on its current and savings accounts are high, at 0.10%-0.25% and 0.50%, respectively, and the bank also offers a wide range of high-yield CDs, including a CD without penalty and a Raise Your Rate CD. Customer service options are also solid at the bank, which offers live chat and a 24/7 phone line manned by live customer service agents. Ally Bank also offers free ATM access at over 43,000 Allpoint ATMs.

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Discover the Bank

Discover Bank is another strong entrant into the online banking category, with the same no-fee, no-minimum structure as Ally Bank. Discover Bank also offers 24/7 customer service lines with a live person, but it goes a step further and guarantees that all of its telephone agents are based in the United States.

Current Discover Online Savings account yields are just a little lower than Ally Bank, at an APY of 0.40%, but Discover Bank offers free ATM access to over 60,000 machines, including networks Allpoint and MoneyPass. Instead of paying interest on its online checking account, Discover Bank instead offers 1% cash back on most debit card purchases made using the account.

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TIAA, FSB

TIAA Bank offers excellent online account options, the only minor downside being that they come with minimum deposit requirements. The Yield Pledge Checking account, for example, pays an APY of 0.10% and has no fees but requires a minimum deposit of $100. The basic savings account pays a stellar APY of 0.50% but requires a minimum deposit of $25. The minimum CD, however, increases to $1,000.

ATM fee refunds are quite generous, starting at $15 per month and becoming unlimited if you have at least $5,000 in a TIAA bank account. CD yields are also quite high, reaching 0.55% for a 12-month CD and 1.05% for a five-year CD. A 3.5 year Bump CD starts at 0.80%. Like most quality online banks, TIAA does not charge fees to its deposit accounts.

Axos Bank

Axos Bank offers the highest online savings account yield in the GOBankingRates Best Banks Study, at an APY of 0.61%. Interest is compounded daily and there is no account minimum or monthly maintenance fee. However, there is an initial deposit requirement of $250, and the APY decreases to 0.25% on balances from $25,000 to $100,000 and 0.15% on balances over $100,000.

The bank offers three types of online checking accounts, Essential Checking, Reward Checking, and Interest Checking. This is very convenient for banking customers as they can choose the type of checking account that best suits their needs. Rewards and interest checking accounts pay up to 1%, and all three checking accounts offer unlimited national ATM fee refunds, which is very convenient for customers who do not want to search for an ATM in a specific network.

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First internet bank

As the name suggests, First Internet Bank was indeed the first state-chartered and FDIC-insured bank to operate entirely online. Given its lead, it’s perhaps unsurprising that one of First Internet Bank’s strengths is the depth of its product line. In addition to checking, savings, and money market accounts, First Internet Bank offers CDs, IRAs, health savings accounts, home loans, credit cards, auto and RV loans, personal loans, and students, children’s accounts and a wide range of business accounts. also.

The bank isn’t skimping on its deposit accounts either, offering an APY of 0.50% on its no-fee savings account and 0.30% on its interest checking account, though that account is also matched. $10 monthly fee.

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Advantages and disadvantages of online banking

If you’re still trying to decide which type of banking is right for you, here’s a rundown of the most common pros and cons of online banking.

Advantages

  • Mobile deposit
  • 24/7 accessibility
  • All account information presented in front of you
  • Online bill payment and money transfers
  • Reduced fees
  • Higher interest rates

The biggest advantage of online banking is convenience. Rather than having to visit a branch to deposit a check, for example, you can usually use a mobile app and upload your deposit from the comfort of your own home. You also won’t have to call or visit a banker to get your account information. Most online banks also have low account minimums and fees, often charging nothing at all to maintain an account. Because online banks generally have lower overhead, they can often pay higher interest rates on savings accounts, CDs, and other deposit accounts.

The inconvenients

  • No physical branches
  • Can only talk to bankers over the phone
  • Difficult to deposit money
  • Unlikely to be a complete solution

Although most people don’t want to go to a bank branch unless they have to, it’s a definite advantage to have bankers and branches available in case you need help. While many online banks have 24/7 phone lines or chat options, in some situations it is easier to resolve a problem by dealing face-to-face with a banker. Another disadvantage of online banks is that you usually cannot deposit money into your accounts. Some banks may offer the option of depositing money through an ATM, but this is usually an option of last resort. Other online banks simply don’t accept cash deposits, which can make them off-limits to cash-rich businesses, for example. Although they are expanding their product lines every day, most online banks do not yet offer the full range of services offered by traditional banks.

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How to switch to online banking

Switching to online banking is easy. First, you will need to open an account in an online bank through a website or mobile app. As with traditional banks, you’ll need to provide basic personal and financial information, such as your name and address, date of birth, social security number, and a source of account funding. From there, most banks will give you various options for transferring an account from another institution. For example, you can usually transfer directly from another institution via wire transfer or ACH transaction, or you can deposit a check via mail or mobile app.

More from GOBankingRates

Methodology: GOBankingRates surveyed 1,335 Americans ages 18 and older across the country between December 1 and December 3, 2021, asking them twelve different questions: (1) Which category does your current financial institution fall into? ; (2) Have you considered changing banks in the last year? ; (3) If you have considered changing banks in the past year, have you had any of the following factors? (Select all that relate to it):; (4) What feature, benefit or other offer is most important to you when opening an account with a new institution? ; (5) Are you currently satisfied with all of your banking products and services offered by your bank/credit union? ; (6) Would you ever have different types of accounts in different banks? (ie check at Chase, but save at TD Bank); (7) What is your preferred banking method?; (8) Which of the following is the main reason you are staying with your current bank? ; (9) Which of the following bank accounts do you currently use/have you opened? (Select all that relate to it); (10) What is the minimum balance you keep in your current account? ; (11) How much do you currently have in your savings account? ; and (12) If you are in a relationship or married, do you share bank accounts with your partner? All respondents were asked to answer a filter question: Are you currently a member of any bank (including online) or credit union?, with a “Yes” response. GOBankingRates used PureSpectrum’s survey platform to conduct the survey.

About the Author

After earning a BA in English with a business major from UCLA, John Csiszar worked in the financial services industry as a Registered Representative for 18 years. Along the way, Csiszar earned the Certified Financial Planner and Registered Investment Advisor designations, in addition to being licensed as a life insurance agent, while working for a major Wall Street distribution house. and for his own investment advisory firm. During his tenure as an advisor, Csiszar managed over $100 million in client assets while providing personalized investment plans to hundreds of clients.