Online vs. Traditional: Which Banking Method is Best for You?

Historically, banking was always done in person, but now most banks have websites and apps that allow you to bank wherever is convenient for you. Some banks are completely online. Both methods of banking have their good points and their bad points, so here’s a look at both types of banking.

Pros and Cons of Online Banking

Although most traditional banks have a website and an app that you can use to bank online, online-only banks are just that: online-only. They don’t have a physical building that you can visit, but they do have a contact number/email/etc. where you can get in touch with a person if you’re having issues. You lose the ability to be able to speak with a bank teller in person, but you gain the convenience of being able to bank from home. Here’s a look at some of the other good and bad associated with online-only banking.

The Benefits

One of the biggest advantages of banking online is that you’re not charged all of the fees that you may be charged when banking with a traditional bank. You also tend to earn more interest on the money in your savings account, so online banking is a great way to keep more money in your pocket. You can also include the gas money spent on driving to a physical bank for tasks such as depositing a paycheck. Finally, credible online-only banks are FDIC-insured up to $250,000 which is true of most traditional banks.

Possible Issues

The obvious downside of online-only banking is that if you’re not tech-savvy this isn’t going to be easy, or more convenient for you. Many people prefer to bank with bank tellers in person, or at least have the option if they’re having trouble with their online banking. Another obvious disadvantage of online-only banking is that you can’t deposit cash into your account, and if you want to withdraw cash you’ll have to use an out-of-network ATM and possibly be charged a fee. The good news is that some ATMs allow you to deposit cash, and depending on the online bank you use, they may have their ATMs or waive fees for withdrawing cash.


Pros and Cons of Traditional Banking

Traditional banks are often called brick-and-mortar banks because they’re physical buildings that you can visit. Even though traditional banks have physical locations, most also have a website and app that allows you to access your account remotely— unless you’re banking with a small local bank as they may not have an app or even a website.

The Benefits

Although online banking is convenient, traditional banks that also allow you to access your bank account online provide the most convenience possible, and most traditional banks allow both in-person and online access.  Most traditional banks are also seen as more trustworthy than online-only banks, although reputable types both provide safe online banking and are FDIC-insured. On the other hand, banking with a traditional bank means you’re more likely to find an in-network ATM (as well as a branch of the bank when you’re traveling) and you can always deposit cash— both of which are not always guaranteed with online-only banking.

Possible Issues

Most traditional banks charge a variety of fees, such as maintenance fees, overdraft fees, insufficient funds fees, and many more. The good news is that not all traditional banks charge all of these fees, as some allow you to open a no-fee checking account— you just have to do your research to find the traditional banks that don’t charge a lot of fees. In addition to this, you don’t earn that much interest on the money in your savings account.

Another issue with traditional banks is that although you can visit them in person, you’re subject to their hours of operation— which usually align with traditional work hours: 9 AM to 5 PM. Most traditional banks are also closed on weekends and all major holidays. There’s also often a long line at banks (likely because of the limited hours), making your errands take longer— depending on the day.


The bottom line is that you should research different online and traditional banks to determine which option is best for you. You can get the best of both worlds by banking with an institution that has one or more physical locations and an app that allows you to do a lot of banking online. You can also get the best of both worlds by opening a checking account with a traditional bank and a savings account with an online-only bank.

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