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Why Online Banking is the New Normal

Millennial Magazine - online banking

Remember having to drive to a local bank branch to cash a check or see your account balances? Thanks to online banking, that is no longer the case, as most transactions can be done online.

While traditional brick-and-mortar banks allow their customers to access and manage their accounts via the internet, exclusive online banks primarily offer mobile access. This means a user won’t meet an online banker face to face, but they can access their account from anywhere at any time.

Albeit finalizing transactions, sending money to family or friends, or placing an order online, online banking offers numerous advantages. This means no more waiting in lines and greater accessibility for account holders. 

Here’s a look at how online banking benefits the modern user:

Convenience

Traditional banking has always had the fatal flaw of long lines and inefficiencies. Keeping records of transactions has always been one of the biggest challenges of the banking system and so has accessing that information as users.

Enter online banking. Whether you need to check your account balance, the exact date and time of a transaction, the validity of a bank statement, or deposit a birthday check, online banking is at your service. You can now do with your fingertips what would otherwise take you several working days.

Financial Management

The conveniences of online banking extend well beyond just mobile control. In fact, consumers can use online banking to become more disciplined about their money using wishlist apps like Monorail. Monorail, in particular, offers responsibility to the account holder and realistically analyzes what they can and cannot afford in a given timeframe. This only goes on to illustrate how online banking and surrounding technology can be directly responsible for users meeting their financial goals.

Interest Rates

In online banks, deposit accounts tend to have higher annual percentage yields. Often, APYs on online savings bank accounts clock around at a strong 0.45%. When compared to the national average savings rate of 0.06% (or 0.01% on savings accounts from brick-and-mortar giants), the contrasts really start to appear.

And before these values are shrugged off as minuscule differences that don’t sound like much, consider this: The larger your balance, the more it matters. For example, $10,000 at the start of the year will earn you a little over a dollar at the end of the year at 0.01%. Flip the numbers to 0.45% and the same deposit earns you over $45.

Investments

It is much more convenient to utilize online banking to keep track of your investments. Online cash management accounts offer an alternate option for earning interest. These cash management accounts offer financial products (such as brokerages) as nonbank service providers and often combine the features of checking, savings, and investment accounts. These online cash management tools are shown to have APYs going as high as 5%.

The Convenience of Online Banking Can’t Be Ignored

The convenience of online banking over its traditional counterpart is manifold and goes on to be a testament to the technological leaps that the financial industry has taken. It all comes down to a stable internet connection today!

What do you think?

Written by JD Hysen

JD Hysen is a fin-tech writer and music critic for Millennial Magazine. As host of The TrueMan Show, he covers all things related to stocks, tech and culture. He's a market analyst by day and a music scout by night, combing venues in search of fresh acts and noteworthy performances.

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