3 Little-Known Perks of Online Banks

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While many people do their banking with brick-and-mortar banks, online banks are also popular. Find out what perks you may get with an online bank. 

Brick-and-mortar banks aren’t the only financial institutions available. If you’re looking to open a new bank account, online banks are another option to explore. Even though these banks are internet-based, you can easily access your money and take advantage of similar offerings made available by traditional banks. You might also enjoy some additional perks when banking with an online bank. Keep reading to learn the little-known perks of online banks.

1. Minimal extra fees

If you’re not careful, checking account fees and other banking fees can add up quickly. The good news is many online banks are known for having minimal extra fees. It’s not uncommon for online banks to provide bank accounts free of monthly maintenance fees.

Another way to save money on fees with an online bank is if the bank offers reimbursement for ATM fees. Usually, if this benefit is available, the bank will provide reimbursement up to a certain dollar amount per month. If you need to withdraw cash regularly, this perk could be valuable.

Remember that not every online bank account has the same fee structure. It’s important to carefully review all fees before opening a new bank account. You want to understand all potential costs to avoid a surprise that impacts your wallet.

2. Get paid early

While not all online banks offer early direct deposit, many banks provide this benefit. Receiving your paycheck a day or two earlier could be helpful for those occasional times when additional costs creep up on you.

It’s best not to become too reliant on this account feature, though. You can prepare for unexpected expenses in other ways. Building an emergency fund is a smart way to prepare for unforeseen costs.

3. Earn more interest with higher APYs

If you’re working hard to meet your savings goals, paying attention to the annual percentage yield (APY) offered by your bank is essential. Choosing a bank account with a higher APY is an excellent way to maximize the interest you earn while your savings sit in the bank.

Many online banks offer higher APYs than brick-and-mortar banks do, thanks to lower overhead costs. This perk could be valuable if you have a sizable emergency fund. You may miss out on additional interest if you have a savings account with a brick-and-mortar bank.

Check out our list of the best high-yield savings accounts to compare account offerings, including APYs.

Don’t ignore online banks

Brick-and-mortar banks are a popular choice for many people, but they’re not the only banks. If you don’t need a physical bank branch nearby, an online bank could be an ideal solution for your banking needs.

They function like other banks and have many of the same benefits you’ve come to love about your local bank. But you could also take advantage of additional perks like the ones mentioned above. If you’re thinking about switching banks, these resources may be helpful:

How to Choose a BankHow to Open a Bank Account OnlineOnline vs. Brick and Mortar Banks: Which Is Better?Pros and Cons of Online Banks

Check out our personal finance resources for additional financial guidance.

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