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Online Banking
Online
banking is becoming the latest fad, but is it for you? You've
seen the ads on TV, but what's all the hype about? The online
banks are claiming they pay higher interest rates on savings
accounts than local banks, and most of the checking accounts
offered by online banks pay interest on your balance. They
let you pay your bills online and check to see which checks
have been paid right from your computer. They also claim lower
mortgage rates than local banks that have the higher overhead
of brick-and-mortar branch offices. Let's look at the facts.
There are two types of online banking. There is the online
banking provided as an adjunct service by brick-and-mortar
banks and there are the services provided by banks that only
have an online presence. It's this later group that is
claiming you can get more services for lower fees through
them than you can get down the street at a traditional bank.
Being able to check balances, transfer funds between accounts,
view paid checks, and pay your bills online are nice features
for those with a computer, but if you shop around you can
find a local brick-and-mortar bank that also offers these
services. There are some drawbacks to online banking.
The online application at an online bank is usually longer
than you would find at a local bank. You deposit funds to
your online bank account by mail, with its inherent delays.
You can withdraw funds from an online bank by writing checks
or at most ATMs, however you will usually be charged a fee
for ATM usage since your online bank doesn't have any ATM's
of its own. If you need a cashier's check or any other service
at a moments notice, you'll need to walk into a local bank
where you won't be recognized as a valued customer. If you
need a mortgage, there are a number of online mortgage services
offering all the advantages and reduced overhead of the online
banks.
So what are the advantages to using
online banking? We didn't find any. If you make
a couple of phone calls to your local brick-and-mortar banks
you will probably find one offering a full featured complement
of features you can access from your computer; interest checking;
and above market rates on a readily accessible Money Market
Account.
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