What are the advantages and disadvantages of opening online checking accounts?


Quick Answer

Advantages of opening online checking accounts include the ability to pay bills online and transfer money between accounts, explains Miriam Caldwell for About.com. One disadvantage is customer service may be lacking in some areas. Certain transactions may also take longer, according to Justin Pritchard for About.com.

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What are the advantages and disadvantages of opening online checking accounts?
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Full Answer

Customers who have to mail checks for online bank accounts versus being able to deposit them at a nearby location face longer wait times for the funds to become available, notes Pritchard. One way around this obstacle is to use an online bank that has remote check deposit capabilities via computer or mobile device. However, merely opening the account can also take longer, as a customer might have to mail paperwork with his signature. If he opened an account with a bank in person, he would be able to use the account right away.

One advantage of online accounts is they tend to offer higher annual percentage yield rates, says Pritchard. Online accounts also allow a customer to speedily view his account history and transactions to better track his financial health and safeguard against identity theft. However, many brick-and-mortar banks allow online access as well. With online banking, a customer can also transfer money using his computer or device rather than have to go in person or use the telephone, states Caldwell.

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