Things to Consider Before Opening an Online Banking Account

If you’re tired of waiting in long bank lines, working with confusing paper statements, and being told to come back later, an online bank account probably feels like a breath of fresh air. It’s fast, flexible, and fits right into your phone.

But before you rush to open your first online bank account, you should know that not all accounts work the same way. Choosing the right online bank depends on more than just downloading the first app you see in an ad.

Here’s a breakdown of the most important things to consider.

Account Fees

Traditional banks are infamous for charging you for nearly everything related to your account. Online banks generally cut a lot of these costs, but it’s still smart to read the fine print.

Common fees to watch out for include monthly maintenance fees, overdraft fees, ATM withdrawal fees, and foreign transaction fees if you travel or shop internationally. These costs are usually communicated clearly, but a lack of awareness can lead to not-so-pleasant surprises in the future.

The best online bank account will make fees clear upfront and ideally charge little to nothing for basic services.

Security Measures

The last thing you want to happen to your money is for it to vanish because your online bank lacks proper security. Good online banks, like SoFi, should offer two-factor authentication every time you log in, fraud monitoring that alerts you to suspicious activity, and instant card lock and unlock options.

Most online banking transactions are encrypted, but it’s still worth checking so your data won’t be stolen mid-transfer.

Accessibility and Customer Service

The irony of online banking is that it’s supposed to be convenient, but sometimes, you need actual human help. The apps can only do so much when you’re dealing with, for example, a stuck transfer.

Check what kind of support is available. Ideally, the bank should offer 24/7 live chat or call support, in-app messaging for quick responses, or at least an email option. They shouldn’t leave you stranded if something goes wrong.

Interest Rates and Perks

One of the biggest perks of online banks is that they usually offer higher interest rates on savings accounts than traditional banks. Since they don’t have the same overhead costs, they pass savings back to customers.

Before opening an account, ask about the annual percentage yield (APY) on savings, perks like cashback on spending, and minimum balance requirements. Even a 0.5% higher interest rate can make a huge difference over time if you’re saving consistently.

ATM and Cash Access

Since online banks are mostly, if not completely, digital, handling cash is where they sometimes stumble. If you deal with cash deposits often, make sure your chosen bank has a way to accept them. Some partner with retail stores or ATM networks where you can deposit.

You can ask if they have a fee-free ATM, what the cost is to use an out-of-network ATM, and if you can deposit cash. A good online bank will balance digital convenience with real-world practicality.