For many, this season is a busy time filled with lots of travel for holidays. While holiday travel is a popular activity...
Online banking is a convenient and easy way to manage your finances. You can do everything from paying bills to receiving money from the comfort of your home, and no longer have to go in person for your banking needs. Many online banks offer the same services as traditional banks and more.
For the most part, online banking works exactly like traditional banking. The only real difference is that every transaction happens online, over the phone, or from a mobile app. Account-holders can open a checking or savings account and usually receive a bank-issued debit card.
A checking account is an account where you can store your money digitally for convenient use. This makes it easy to pay bills (ex. utilities or rent), set up a direct deposit with an employer from the comfort of home. Other features may include setting up auto payments, a debit card for your disposal, and personal checks.
Most online banks let you set up a savings account and a checking account simultaneously, making the whole process more convenient.
Unlike checking accounts, savings accounts are meant for saving money. The interest rates on savings accounts vary widely. The higher the APY, the more your account could gain in interest.
A certificate of deposit (CD) is a type of savings account with a higher interest rate. The main difference between a traditional savings account and a CD is this:
You cannot access the money you deposit in the CD for a certain period of time, usually at least 6 months. Once that period ends, you’ll receive the initial deposit plus any interest gained. Withdrawing the funds early could result in a financial penalty.
Here are some things to look for when shopping around for an online bank:
Once you’ve found a bank that suits your needs, go to its website and create an online profile. This usually requires the following information:
During this process, you’ll be able to choose which types of accounts you want to set up, such as a checking or savings account, and choose whether you want a joint or individual account.
You may establish an online bank account with both digital banks and traditional national banking institutions. You may also create an account with several regional banks and credit unions online.
You can, in fact, open a bank account without ever having to step foot inside a real branch by using just the Internet. If you bank or have an entirely online account, you can also control your whole account from your computer.
Grab your identification documents, a computer, a tablet, or even your phone, and you'll have everything you need to open an account online.