advice hub

Online vs In-Person Banking

Online vs In-Person Banking

It used to be that taking care of banking always involved a trip to a bank branch or credit union. The recent introduction of virtual banks presents an entirely different alternative. Here is an article from NerdWallet about how to decide whether banking with a virtual or brick-and-mortar financial institution is right for you.

Virtual banks 101

Unlike your local bank or credit union, a virtual bank has no physical branches, so all transactions are completed via ATMs or an internet-enabled device like a laptop or mobile phone. This arrangement provides the convenience of being able to bank from anywhere that has connectivity at any time, without having to worry about banking hours. You can apply for loans from the comfort of your home or transfer cash to your checking account at midnight to cover a late dinner tab. Additionally, the overhead expenses they save by not having branches means that virtual banks sometimes offer better interest rates than many brick-and-mortar banks or credit unions.

Tech-savvy millennials may find the idea of virtual banks attractive, likely for the 24/7 access to accounts and the hope of more favorable rates. Be aware, though, that no face-to-face human interaction is available with virtual banks, and because their ATM networks are often limited, it may also be difficult to find ATMs free of charge.

A win-win choice

There’s no question that remote banking technology can be a game-changer, but this doesn’t necessarily mean it makes sense to give up your brick-and-mortar financial institution. Those who favor a more personal touch will continue to patronize friendly physical branches where they’re treated as more than just a set of numbers.

Local brick-and-mortar banks and credit unions like United Federal Credit Union provide the same online and mobile banking features offered by virtual banks, including remote deposits, electronic transfers, bill pay, Apple Pay™, electronic statements, account alerts and online loan applications. So you’ll enjoy the 24/7 access of a virtual bank without giving up human warmth. Most local financial institutions also offer a wide network of ATMs, so you shouldn’t have to worry about racking up fees when you’re out of town. And because they don’t operate for profit, credit unions can offer very competitive interest rates. National average credit union rates for savings, investments and loans are consistently more attractive than those of banks.

Additional brick-and-mortar perks

Local credit unions and banks play an active role in their surrounding communities, which results in benefits you can’t find with a virtual bank. here are just a few:

  • Personal service: Virtual banks aren’t always known for stellar customer service, and this may leave account holders feeling frustrated and alone. At a brick-and-mortar branch, real human beings are available to help you. You simply can’t get that from technology alone.
  • Community involvement: Local financial institutions, particularly credit unions, are heavily focused on serving their surrounding communities. They tend to donate generously to charitable organizations, and their employees are encouraged to volunteer for projects such as fundraisers and mentoring neighborhood students.
  • Local convenience: Branches often are near the stores, restaurants and businesses you regularly visit. This means you can combine banking with other errands you had to do anyway, rather than make a special banking trip.
  • Local knowledge: Because the employees of local branches are also your neighbors, they have an inside view into what’s going on with your community’s economy, business climate and local housing market. This comes in handy when you’re ready to take out a mortgage or business financing.
  • A boost to local economies: Neighborhood credit unions and banks typically prefer to invest close to home, which helps community businesses, individuals and local economies to prosper.

When it comes to finding the perfect place to bank, there’s no need to sacrifice convenience, popular features, competitive rates or the human touch. Banking locally provides the best of both worlds by combining the latest technology with old-fashioned, neighborly customer service and values.

Roberta Pescow, NerdWallet

© Copyright 2016 NerdWallet, Inc. All Rights Reserved.