Advantages of an online checking account include: fewer fees than traditional checking accounts, access to personal finance tools and a wide banking net. Some of the disadvantages of an online checking account include potential difficulty having questions answered and problems resolved and variable security capabilities.
Online banks don't have the same expenses as traditional banks, which allows them to offer customers fewer fees. Some online banks reimburse customers for any fees incurred at ATMs. Online checking accounts usually don't have minimum deposit requirements or charge fees for accounts with a low balance.
Examples of financing tools available with online checking accounts include personal budgeting tools, savings tracking and financial alerts. Tools may also allow account holders to receive data about paid bills and expenses. Customers aren't limited to only using banks in the local area if they opt for an online checking account. This creates more options for the interest rate on the account and potentially improves returns.
One drawback to online-only banking is dispute resolution. A call center may be available, but the customer may be charged a fee for using it. Online customers might be targeted by cyber attacks if the bank's security is weak or if the customer's account uses a weak password.