If you are thinking about opening a free account at an online-only bank, please consider Chime Bank and using this referral link: chime.com/r/tuongdao. Both you and I will get $50.
Mobile banking and online banking are two different things. Nevertheless, they still have a lot in common. For reasons of convenience, I will use these two terms interchangeably in this post.
As more people have access to the internet and own a smartphone, a lot of mobile services have come into existence. People can now do a lot of things online, such as shopping (Amazon), ordering food (DoorDash), holding meetings (Zoom), etc. Among new digital services that are prevailing, mobile banking stands out as one of the most popular choices. Customers do not need to drive to a branch and wait in line. Instead, they can simply open the banking app on their smartphone and enjoy a wide array of services that online banking has to offer. Their financial life suddenly becomes a lot easier. They can bank in their own terms, whenever and wherever they want. Below is a list of services that people can take advantage of through online banking.
Opening new accounts: With online banking, opening new accounts is as easy as one-two-three. Different banks have different procedures regarding a new account opening. Generally, one just needs some necessary information (e.g., social security number, ID number, address) to have an account open.
Mobile deposits: This is probably the most significant advantage of mobile banking. Before the digital age, depositing checks requires people to go to a branch or an ATM machine. It is inconvenient, mainly when depositing checks is a repetitive task or when there are plenty of checks to be deposited. With mobile deposits, people can cash their checks right after they receive them. All they need to do is scanning their checks through the banking apps and enter some information.
Bank transfers: This service is useful for those who have accounts in different banks. External accounts that are owned by the same person can be easily added to mobile banking apps. Money can be moved between accounts freely at scheduled times. This service can also be used to send and receive money from friends and family. Besides, some banks even offer real-time ACH transfers. It means that money can be moved instantly between accounts at two different banks.
Bill payments: Nowadays, managing payments for recurring bills can be a challenge. On average, one person can have up to eight monthly bills. These bills include utility bills, phone bills, rent payments, etc. It is demanding to remember to pay them all on time to avoid late fees. Luckily, online banking can give assistance to all people who are in need. Most banking platforms offer a single location where payees can be added, and recurring payments are scheduled.
Building budgets: Most mobile banking apps allow customers to categorize their expenses and keep track of their spending. Furthermore, customers can sync their banking information with budgeting apps such as Mint or PocketGuard. It makes sticking to budgets painless and trouble-free. In addition, customers can set goals to help them recognize what they are saving for, track their progress, and mark their achievements. They can do all of these things in the palm of their hand.
Access money: Mobile banking enables customers to connect their debit cards with wallet apps such as Apple Pay and Google Pay. These wallet apps permit people to store the virtual version of their ATM/debit/credit cards. The apps can be used to make contactless payments in stores as well as online payments.
Currently, both brick-and-mortar banks (e.g., Chase, CitiBank) and online-only banks (Ally, CapitalOne) offer online banking. While a lot of people still favor brick-and-mortar banks due to their credibility, online-only banks certainly have their place when it comes to fees. Giant banks, such as Chase or Bank of America, charge all kinds of fees, from monthly maintenance fees to overdraft fees. It is not easy to keep an account open at big banks for low-income people or those who do not have a job. Online-only banks, on the other hand, are mostly free. They do not charge their customers anything. For example, I have a checking and savings account with Chime for years, and I have never been charged anything. Online banks also offer higher interest rates for savings accounts and CDs. Not having physical branches certainly helps those online-only banks. They do not incur expenses that brick-and-mortar banks must pay. Thus, digital banks can keep their fees zero or close to zero. Another thing is that if online banks started charging fees, no one would use them. Zero fees, higher interest rates, and better customer service, to some extent, are their only advantages.
The main disadvantage of online banks is, of course, the lack of physical branches. This becomes a big problem in urgent situations that involve large amounts of funds. What if someone sends you a big lump sum of money, and it has not gone through your account? You would probably prefer speaking to someone about this in-person to over the phone. Also, when there are problems, it is more satisfying walking to a branch and complaining face to face.
For me, I am using both brick-and-mortar banks and online banks to have the best of both worlds. For brick-and-mortar banks, I am using Chase and U.S. Bank. I use Chase mostly for convenience purposes. This bank has branches everywhere. There are two Chase branches within two miles where I live! For U.S. Bank, I have been using it forever. I have several credit cards with U.S. Bank, so I am eligible for its gold checking package. I do not have to pay monthly fees for checking and savings account.
For online banks, I am using Chime. I really like this bank for several reasons. First, its mobile banking app is intuitive and user-friendly. Second, as with other digital banks, Chime does not charge any fees. The bank claims on its website that it has no hidden fees. Third, it offers automatic savings. Whenever you spend money, the paid amount is rounded up to the nearest dollar. That round-up is automatically transferred from checking to savings accounts. Finally, if you set up direct deposits to Chime accounts, the funds arrive two days early. It is super cool to have the money available to you two days early, especially when you need to make urgent purchases.
I have been Chime customer for several years, and my experience thus far has been positive. I am completely satisfied with its services. I think it is worth it if you give it a try. After all, you have nothing to lose as there is absolutely no fee, apart from two minutes of your time for entering your information when opening a new account. If you use my referral link when signing up, you and I both get $50 each after you receive a $200 direct deposit or more within 45 days. Here is my referral link: chime.com/r/tuongdao