Tuesday, May 7, 2013

Imaginary Banks

Why would this be a good picture for this post? I'm not sure.

Read this if: 

1) Well, why not. 

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Just kidding, there aren't actually imaginary banks. I'm actually talking about online banking. 

There is a difference between online banking and using your bank's website. Most banks have actual buildings that you physically go to, while some don't. These banks are exclusively online.

Pros

1) Free checks (not all banks have this - never pay for your checks!)
2) ATM fee reimbursements: use your debit card at any ATM and your bank might reimburse some (or even all!) of the fees
3) Significantly higher interest rate: granted, while 0.84% (an example) is a lot compared to %0.01, it's still not going to make you enough cash to roll in. 

Cons 

1) You might think your bank is imaginary. I sometimes forget about my online accounts. -_-
2) Making deposits requires you to mail checks or link an account, so you pretty much have to have a physical bank as well. 

A note that applies to all sorts of financial situations: don't let higher interest rates sway you from switching from one account to another. If you're happy with your existing checking or savings account, don't change just because of a higher interest rate elsewhere. 

Plan of Action: 

1) Decide if an online bank is right for you. 
2) Find one that offers features you like and stick with it. 
3) Contact Joan for suggestions, or with comments and questions and suggestions of your own.

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Photo credit:  bernat... via photopin cc

2 comments:

  1. I'm pretty satisfied with my bank right now, but I do want to switch in the future. Are there any online banks you would personally recommend?

    The main thing that gets me is that getting cash out might be annoying, but if they reimburse me, it seems very useful.

    Also, is there a chance of any of these online banks being scammers and running with my money?

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    Replies
    1. Hey there!

      1) I would recommend any online bank that meets the following requirements: it's FDIC insured, and there are no service fees. The ones I know of are with the following companies: Ally, Capital One and Schwab.

      2) You could have a checking account with a "normal" bank (which would have more ATM access) and keep your savings in an online bank.

      3) Ahahahahahaha. If you check to make sure that they are FDIC-insured, I think you'll be ok. Also, check that the bank is legitimate with Google - usually prominent banks show up on many financial websites.

      Hope that helps!

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