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According to Statista, there were 1.9 billion global online banking users at the end of 2020. The number is projected to grow to 2.5 billion by 2024, so thousands of people are weighing their banking options right now. The banking industry has responded with an influx of new online banking options.  

Making the decision to switch to online banking is more complicated than simply choosing to make an online credit card payment. The initial deposit will need to come from somewhere, in most cases a more traditional bank account. There are also questions about accessibility and financial product availability that need to be answered. These are the questions you need to ask yourself before making the switch to online banking: 

1. Are you comfortable with online technology?     

This might be the most important question of them all. Doing business with an online bank eliminates many of the amenities and customs that traditional banking customers have become comfortable with. There are no lobbies, tellers, or physical customer service desks. Online banks often service their customers via text and online chat.  

2. Are you getting a good interest rate on savings?  

Online banks can usually offer better interest rates because they have lower overhead than traditional brick-and-mortar banks, but that’s not always the case. Banking customers considering a switch to an online institution should check their current interest rates on savings before transferring any funds. Shop around for an online bank that can beat them.    

3. Do you know what your current fees are?   

This is like the comparison recommended for interest rates. Most banks have monthly and annual fees. There could also be additional charges for using an ATM card. Make a list of all these fees and compare them to what the online bank has to offer. In most cases, some online banking fees will be lower while others are higher. Study this carefully.    

4. Do you use the ATM frequently?  

Online banks have different policies when it comes to ATM cards. Some don’t offer them at all. Others provide them, but they charge a fee every time customers use them. The frequency of ATM use should be a factor in the decision to switch to online banking. It might be best to maintain a brick-and-mortar account for the ATM card and an online bank for savings.    

5. What do you need, besides checking and savings?  

Banking is more complex than simple checking and savings. Modern banking customers invest in CDs, mutual funds, and have mortgages. Many online banks offer these, but not all of them. Some even offer investment services that give their customers the ability to buy and sell equities. The online banking choice should take these needs into account.   

The Bottom Line: Banking customers can choose both 

It’s not necessary to choose either an online bank or a traditional brick-and-mortar bank. Many people choose both, taking advantage of online banking convenience and more personable service from their regular banks. This also gives them access to more financial products and expanded ATM networks. Consider all this carefully when making your banking choices.