Should you use a regular or online account?

The online banking industry has changed significantly in recent years, and this is especially true for online checking accounts. Not only will these accounts help you save on bank fees, but they will also allow you to earn interest on your balance and enjoy a number of other perks that don’t come with checking bank accounts.

Of course, there are cases where using a traditional bank makes good financial sense. But for most people, it would be wise to take a closer look at online checking accounts.

If you haven’t looked at your online accounts in a while, click here to see what the best online checking accounts offer.

Reasons to use an online checking account

Perhaps the biggest reason to switch to an online checking account is to avoid fees. All leading online accounts have no monthly maintenance fees, and most also have no overdraft or non-sufficient funds (NSF) fees.

While most brick-and-mortar banks have the ability for account holders to avoid fees by, for example, maintaining a certain balance, online banks simply don’t charge these fees at all.

It can also be much more convenient to make deposits and access your money with an online checking account than you think. In addition to mobile apps that make moving money easier, many online banks offer access to 60,000 (or more) ATMs for free withdrawals. By comparison, megabank Bank of America has a network of about 15,000 ATMs across the country.

Some online checking accounts offer unique and valuable perks. For example, the Discover® Cashback Debit Account allows you to earn 1% cash back on debit card spending, up to your monthly limit. Click here to learn more and open an account today. Some online accounts offer customers free paper checks. And some accounts not only have no fees, but also pay interest.

When a regular bank might be better

One of the biggest objections I hear when it comes to online checking accounts is, “What if I need to go to a branch or get in-person customer service?” And to be honest, I had the same objection at first—until I realized I hadn’t set foot in a bank branch in over three years.

Of course there is some people who would be better off with a regular bank. For example, if you regularly deal with cash, it would be wise to have a physical checking account. Perhaps you work in the service industry and leave with tips every day, or maybe you have a small business where clients often pay you in cash.

While some online accounts allow you to deposit cash in certain ways, it’s usually a fairly clunky process. You may need to make a deposit into a different bank account and then transfer it to your online account. This is one task that clearly It’s more convenient to go to a regular bank.

There are other examples. Perhaps you regularly need to receive cashier’s checks promptly, or you regularly need other services that regular banks provide to account holders.

Online banking is better for most people

Personally, I mostly use online bank accounts. However, I still have a bank branch account (small business real estate investment account). But I would estimate that for 99% of my banking, my online accounts offer everything I need.

The bottom line is that if you don’t regularly handle cash or otherwise have a need to frequently visit a bank branch, an online checking account can save you money and offer convenience and valuable benefits.