Online banking provides you with access to your account no matter where you are. All of your accounts are at your fingertips and available from ATMs around the world.
The Basics of Online Banking
Let’s start off with what an online bank is. Without a branch system, we are able to save on the high costs of operating bank branches across the nation. These savings are then passed on to you through some of the best rates in the nation for deposit products and home financing.
You can get an overview of your account through your computer from wherever you are. Many online banks also provide a mobile app that will allow you to quickly make transfers and check your account balance when you are on the go.
Banking without the Fees
Many banks charge fees for everything from using another bank’s ATM to writing too many checks. With online banking you are able to avoid many of these charges to keep your money in your account.
The biggest culprit of fees for many customers is on ATM withdraws. The national average for a domestic ATM fee is $2.90i. That is what you will be charge just for taking money out of your account in the United States. Once your travel overseas, those traditional banks will charge you an ATM fee of $1 to $5 plus an additional charge of up to three percent of your withdrawal amountii.
Online banks do not offer their own ATMs as they do not have any branches. Because of this, many online banks make amazing concessions in regards to ATM fees. They will partner with banking groups to provide you a variety of fee free ATMs and offer you reimbursements for ATM transactions across the US.
In addition to domestic reimbursements, some online banks will offer international reimbursements as well so that you will have free access to your money no matter where you travel to.
Help your money earn more. The national average savings account interest rate is only 0.06 percent for all balances, according to the FDICiii. With an interest rate like that, you can expect to earn a few cents of interest on your account each month.
Working with an online bank can offer you ten times the interest of other banks. Many accounts will also offer much higher rates if you are depositing large sums into the bank. Do your research to find an account that is going to help your money grow without taking all of your interest gains back in fees.
Buying Your Home
To ease you home buying process, you may want to consider sticking with your online bank. With your funds already in one of their accounts, they will know that you have the financial security to make a new home purchase.
Online banks also offer some of the lowest interest rates on home mortgages in this country. Getting a lower rate can save you thousands over the time you own the home.
Selecting the right bank when you are first moving to the United States can be a crucial step. While you are looking at the nations bigger banks, be sure to do your research and see what an online bank can offer you. In many cases you will find that they provide you with the financial freedom that the big banks can’t.
i. “The 7 Cities with the Highest ATM Fees” Bankrate. 2016. http://www.bankrate.com/finance/banking/cities-with-highest-atm-fees-1.aspx
ii. “Foreign ATM and Debit Card Fees By Bank” NerdWallet. 22 June 2016 https://www.nerdwallet.com/blog/banking/debit-card-foreign-transaction-international-atm-fees/
iii. “What Is The Average Savings Account Interest Rate?” GoBankingRates. 25 April 2016. https://www.gobankingrates.com/savings-account/what-average-savings-account-interest-rate/