4 Myths About Online Banking That Could Be Costing You Money | Global News Avenue

Online banking provides a convenient way to access and manage your money anytime, anywhere. In many cases, they also provide better functionality, Deposit accounts have higher interest ratesand have lower fees than brick-and-mortar banks. These benefits can save you (or make) a lot of money in the long run.

However, many people may still be hesitant to open an account with an online bank. Fortunately, some of their concerns may be based on misunderstandings of how online banking works. Here are some common misconceptions about online banking and the truth behind them.

Myth 1: Online banking is not safe

Online banks and credit unions are relatively new to the banking industry, but that doesn’t mean your money isn’t safe. They typically offer the same insurance coverage as a traditional bank or credit union—provided by Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA)— if the agency fails.

Make sure your bank or credit union is a member of the FDIC or NCUA. This way, even if your bank closes, your funds will be protected up to $250,000.

Myth 2: Internet banking interest rates are too good to be true

Online banks tend to offer Savings accounts have higher interest rates and Certificate of Deposit (CD) They have lower administrative costs than traditional banks, primarily because they do not have a network of physical branches to maintain.

In some cases these may be promotional rates to drum up business, but you’ll usually find good standard rates at online banks. Traditional banks with a long history may be less concerned with attracting more customers with high interest rates.

Myth 3: Online banking has limited customer service options

You may be concerned about the customer service options for online banking, especially if your local bank or credit union has a branch that you can always go to if you have a problem.

But many online banks now offer 24/7 customer service over the phone, as well as live chat capabilities, making it easy to get help immediately and without any hassle. It’s not quite the same as talking to someone in person, but (depending on the bank) you shouldn’t have too many problems getting help.

Consider this: According to a recent survey by the American Bankers Association, only 8% of U.S. consumers choose a physical branch as their first choice for managing their bank accounts. The most popular option was banking apps on phones and other mobile devices, with 55% of the votes. 96% of respondents rate their bank’s digital experience highly.

Myth 4: Depositing funds is troublesome

Online banks typically offer direct deposit and Mobile check depositmaking it easy to receive your paycheck and other important payments. Some also allow you to deposit cash through ATM machines or certain retailers, but fees may apply. Others don’t allow you to deposit physical cash, which may be a problem for some.

If you want to work with an online bank but need an easy way to deposit cash, you can open an account at a traditional bank or credit union and then transfer the funds to your online banking account.