The way people bank has changed a lot in the last ten years, and it’s still evolving. While it’s still an option, you no longer have to visit a physical location to do your banking. All you need at the moment is an internet connection and an app or a website. Below we’ll discuss online banking and traditional banking, compare the two, and more.
What Is Online Banking?
While most physical banks provide online banking as a service they offer, more and more banks are strictly online, such as SoFi , Ally, and others. Everything is done online through a computer or a mobile device with an online bank, and account holders have a debit card. There are some cases where online banks allow customers to write paper checks.
What Is Traditional Banking?
A traditional physical bank these days not only has a local physical branch in a nearby location that you can visit inside, the ATM, or use the drive-thru, but they also have online banking options. They also have people in the bank who can help you with whatever problems you have. However, the online banking apps they use aren’t as detailed or robust as apps you find for online banks.
Online Banking vs. Traditional Banking
There are several noticeable differences between online banking and traditional banking. Traditional banks tend to have several high fees for almost everything, while online banks have lower fees or no fees at all. Online banks have a higher interest rate for savings accounts, while you barely earn anything at a traditional bank.
Advantages Of Online Banking
There are many advantages to online banking. These advantages include:
- Extensive mobile apps where you can manage everything about your accounts
- Easy to sign up for a new account
- You can still use an ATM
- Better interest rates
- Low or no fees.
- Still has many standard bank services.
- Freelancers and side hustlers can separate business and personal money
Not only do online banks offer checking and savings accounts, but many of them also have other banking services such as loans, CDs, mortgages, and investing options. Online banking is an excellent option for those familiar with using apps and who hate making extra trips they don’t need to take.
It’s also great for those who hate paying fees. Speaking of better interest rates, according to the experts at SoFi , “members who have an online bank account with SoFi experience savings interest rates 33 times the national average checking rate.”
Advantages of Traditional Banking
There are also advantages to traditional banking. These advantages include:
- You can stop in whenever you need to
- Local banks get to know their customers
- You can use branch ATMs, drive-thru, or go inside
- Easy to get cash
Traditional banks are best for those who want personalized service with people who can get to know you. Those who use strictly traditional banks might be older people who aren’t used to dealing with apps and businesses that are strictly online.
Banking With SoFi
Your banking needs and preferences determine whether you go with a traditional or online bank. Many people don’t realize just how easy and safe it is to switch to an online bank. If you’re all set to get more out of your banking, check out what you get with an online bank account from SoFi.
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