Why Open An Online Banking Account

Why Open An Online Banking Account
Photo by yoppy – CC BY 2.0

There are many options for an online banking account. Almost all of the world’s major banks now offer online banking options for their clients. With the accessibility of banking online, most banks now offer online services as one of the staple services they need to offer clients in order to compete.

What is an Online Banking Account?

An online bank account works just like a traditional account except that it is opened and maintained online. These online bank accounts are designed to ride on existing bank accounts so they can receive funds. These are often offered by traditional banks that have traditional accounts and want to make banking easier for clients by allowing them to pay bills or withdraw and deposit money online. However, there are also bank accounts that are solely offered online, without any brick-and-mortar-counterparts.

Why Open an Online Bank Account?

Aside from accessibility, one of the main reasons why online bank accounts are favorable to internet users is the high annual percentage yield or higher interest rates. This is because banking online saves the bank a lot of dollars, which it would have otherwise paid for infrastructure, rental fees, and employee fees. Online banking is cheaper for most banks, so they are free to pass on the savings to clients in the form of higher savings rates. Having an online banking account also allows clients to shop online and facilitates easy movement of funds from one bank account to another.

How to Open a Banking Account Online

Opening a bank account online is easy. Either one can choose to open the account by going to the bank, or one can go online to the bank’s website and fill up the online banking enrollment form there. Bank accounts that are solely available online can be filled up and verified online in a matter of minutes, without the need to visit a brick-and-mortar branch.

How to Choose the Best Online Banking Account

Factors that should influence one’s choice of a bank include the interest rates, online accessibility, reliability of customer support, as well as online security, aside from other services such as the option to shop, pay bills, and even sign up for mortgages online. The interest rate is still a big factor, since online banks may differ in how much interest they charge. Most online banks are also getting flack for poor customer support. One should sign up for an online bank with a proven reputation for reliable customer support that is available any time of the day. A reliable bank should also conduct transactions in a secure site. One way to know if a bank uses a secure site is the green padlock symbol on the address bar before the address of the bank.

A good online banking account must be backed by a reliable bank with years of trusted and reliable track records. For purely online banks, they should be covered by FDIC insurance, which protects clients in case the bank folds. The worst problem anyone can face is signing up with an online bank that is doomed for bankruptcy later on. Bank of America, J.P. Morgan Chase & Company, and Wells Fargo are just some of the many banks that offer online banking to their customers.

An online banking account is a great way to conveniently pay bills, shop, and even sign up for loans online. There are many online bank accounts that offer this convenience, but it is still important to choose the best bank that offers reliable service, internet security, and large savings rates. This way one can enjoy the advantages of online banking while staying financially safe at the same time.

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