Should I Open a Bank Account Online?

I recently had the privilege of speaking with Squawk Fox (Kerry Taylor) about a post on online banking and breaking up with your current bank account. This sparked me to think about yet another important personal finance question: should I open a bank account online?

I recently did some research to find out where the best online banking is done. One of the readers of Studenomics, told me that the research was valuable but they simply weren’t sure if they should open a bank account online. No problem. Let’s do some thinking before you get started with your online bank account application. Let’s see if you even need to open an online banking account or if you could simply remain with your current bank.

1. Search for the right online bank account.

There are so many online banking accounts out there today, that it’s really easy to get overwhelmed when trying to make your decision, especially when most of your budgeting is done online. What’s right for me, isn’t necessarily right for you. Some readers will only care about interest rates. Other readers will focus on account flexibility. I personally looked for an online banking account that would allow me to:

1. Safely store a portion of my savings at a comparable interest rate.
2. Offer a user-friendly interface.

The question now is: what matters to you most when looking into a bank account? Will you even be able to find that in an online banking account?

2. Consider customer service.

How’s the quality of your current customer service? None of us want to be treated poorly by the people that handle our hard-earned savings. If your current bank isn’t treating you with respect, then it’s a sign that you need to get out and move on.

The main benefit of a online bank account is that you’ll rarely have to deal with customer service. If you do have an issue, there’s usually a 24/7 contact number where you can get your questions resolved.

3. The paperwork issue.

You must take care of all of your direct deposits. I must admit that I thought the online bank account application would take forever to fill out and would require me to dig through paperwork for hours. This is the deal breaker for most of us when decide if we should open a bank account online. We get all stressed out. We got worried about the paperwork. We start to think about all of our direct deposits and automated payments.

Here’s the simple truth– it’s really not that difficult to open a bank account online. The only thing that matters is that the following people are informed well in advance: payroll office, gym provider, cell phone provider, and any other monthly automated direct deposit/baking you have setup. It takes a few minutes to track down the correct people and then you’re all set.

One final point… You could do what I did. I decided to keep my traditional brick-and-mortar bank account open, after I had already decided to open an online bank account. I don’t mind having a few bank accounts. Some of you will want to have a much simpler financial system. Do what works for you.

Hopefully now you can decide if you should open a bank account online or not. Please don’t forget to check out the article that Kerry Taylor put together + another great resource:

How-to break up with your bank account.
How-to Move your bank account.