4 Benefits of Online-Only Banks

by. Jennifer Waters

Many no longer need to ever set foot in a traditional bank

No matter what socioeconomic strata you’re in, you can ditch your big-box bank and still be a responsible, productive member of society.

There are plenty of alternatives to the conventional mode of finance that will allow you to have a checking account, credit cards and mortgages, as well as the ability to pay bills and get cash. Among the options: online-only banks, credit unions and brokerage accounts.

“Online banking is making banking more accessible to people with more modest financial means,” says Richard Barrington, senior financial analyst at MoneyRates.com, an online financial information site. “Fees in general are lower, and the minimums required to open an account are typically lower.” That’s helpful not only for lower-income earners, but also for emerging breadwinners, like younger, well-educated college graduates.

Here’s a breakdown of some of the advantages:

  • Better account rates. You can often get better interest rates on certificates of deposits and checking, savings and money-market accounts at online banks and credit unions. Here’s why: They typically don’t have shareholders looking for big dividends, and they aren’t shouldering the operating costs of all those brick-and-mortar branches. (Some even offer special accounts for seniors or students.)
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