Let me start off by saying I love banking online and wouldn’t go back to using a brick and mortar. We have had an online savings account with ING for 5 years and online checking for about 2 years.
There are tons of advantages like remotely depositing checks with your phone. Yet, I am frustrated by a few limitations of online banks.
5 Disadvantages to Online Banks
There are only a few hassles when dealing with online banks, but hassles nonetheless.
1) Depositing Cash– While we don’t have huge influxes of cash, there are times when I’d like to deposit cash directly into our account.
I can ‘smuggle’ the money through a series of linked accounts (we have one traditional account open for such purposes), but this is an annoying multi step process.
On second thought, I wonder if I can deposit cash via ATM into my online account….has anyone done this?
2) Medallion Stamps- An online bank doesn’t have the ability to give medallion signature stamps that are needed for investment transfers or even name changes on investment accounts. A bank you have an account with will usually waive any fees ($15-$20) for the stamp.
3) Withdrawing Cash- While our ING account has free ATM withdrawals at many locations, there is a daily limit to how much cash you can take out.
Currently that limit is $1,000 per day for ING Direct and the owner of the ATM machine can set a max withdrawal per transaction. If you’re needing a lot of quick cash, you’ll need to plan ahead.
4) Cashier’s Check- If you’ve paid for a used car or expensive item it the owner probably required a cashiers check or certified check from a bank. Rightfully so! Again, you’re out of luck if you only have an online bank and will have to jump through some transfer hoops to get that certified check.
5) Holds on Check Deposits– I personally don’t have a problem with the 1-2 day holds put on the checks deposited, but I have found it annoying a couple of times. We also have same problem with our brick and mortar bank with holds, so it seems like an industry standard to hold funds from a deposit at a whim.
Some might have a problem not dealing with a live person for customer service issues. I’ve never had a problem with customer service issues with our online bank, but I would have no problem dealing over the phone or in a live chat/email. I don’t think customer service is a reason to avoid using an online bank.
While I enjoy the ease of our online banking experience and higher savings rates, there are certain annoyances that force me to keep a traditional brick and mortar account open.
What annoys you about banking online or keeps you from opening an account online?
Photo Credit mag3737 (Creative Commons)