Digital banks have made banking much more convenient, allowing customers to access their accounts anywhere and at any time with the simple click of a button. While they offer many benefits over traditional banks, there are also some downsides to consider before switching. Use this guide to learn about digital banks and whether or not they are right for you!
If you’re in a rush and need to check your balance, get cash from an ATM or send money to a friend, digital banks let you do all of these things on your smartphone. Though not all online banks have physical branches, many offer 24/7 phone support for questions about balances and transactions; it’s just one more way they aim to create a convenient banking experience. If you like having easy access to your bank accounts via computer or phone, then digital banking is worth looking into—and it could save you money in other ways as well. Online banks are often more technologically advanced than brick-and-mortar operations because they can use software and data to cut costs.
First and foremost, digital banks make it safer for you to bank. This is because many of them are actually online banks, which mean that no customer service employees can access your account on their own. Instead, you’ll receive a pin number that only allows you to log in, meaning no one else will be able to get into your account without your permission. Additionally, with mobile banking apps, it’s much harder for hackers to get at your money. Most of these apps offer additional layers of security such as fingerprint scanners or facial recognition software.
Banking from your smartphone is convenient, time-saving and can actually save you money. With your financial information at your fingertips, paying bills, scheduling automatic transfers and keeping an eye on your spending has never been easier. Also, if you’re away from home or otherwise out of pocket for a few hours, it’s easy to check and see if you’ve gotten any deposits (and where they came from). Online banks typically don’t charge much—if anything—for mobile banking apps; some even give you a small bonus for checking in frequently. When compared to most brick-and-mortar banks these days, checking in with digital banks could save you time and money.
The best thing about digital banks is that they tend to offer more personal service. With branches typically limited in number and hours of operation, banking from your smartphone offers flexibility. Plus, digital bank customer service reps are usually available on 24/7 call centers. And with so many digital banks coming out, it’s not hard to find a high-quality one that fits into your lifestyle and preferences.
When it comes to interest rates, there are literally hundreds of options for traditional banking. But when it comes to online banks, you typically only have one or two choices: a high-interest account or a low-interest savings account. The difference between these accounts is often as much as 1% percent per year; that’s a big deal if you’re trying to grow your savings. Online banks also do away with all kinds of fees that traditional brick-and-mortar institutions may charge you. For example, many (if not most) charge monthly service fees while some won’t let you make deposits into your own bank account without charging an absurd fee (i.e., Western Union).