The Benefits of Online Banking: A 5-Year Perspective

For the past five years I've used online banking exclusively for my personal banking needs. Here are the reasons why.Image source: Getty Images.

Picking the right bank is a big decision. For many years, my checking and savings accounts were maintained at a series of different local banks. As problems crept up with each of these local banks, I tried different financial institutions -- only to find that none of them were meeting my needs.

Then I opted to make the leap to an internet-only bank. Since I made the switch, my relationship with my bank has been wonderful. Here are five key reasons why.

1. I hate going to the bank in person

One of my biggest pet peeves with local banks was that all of them seemed to require me to come to a local branch to deal with various problems when they arose. Whether it was because my ATM card got lost or they incorrectly credited a deposit, customer service would routinely suggest that I show up in person to address the issue.

I don't want to take time out of my day to go to a local bank branch and resolve problems. Since online banks don't have local branches, I never have to worry about that. The few times I've had questions or concerns about my online bank, they've been resolved almost instantly with an online chat -- I didn't even have to get on the phone.

2. I like being able to make large deposits via mobile

With many of the local banks I've used, there were pretty small caps on the size of the checks I could deposit using my phone. There was both a small per-check limit and a small monthly limit (one bank restricted me to depositing no more than $5,000 a month using mobile deposit!).

With my online bank, I can deposit individual checks up to $50,000. I've never run into a situation where my check was too large to be deposited in the online bank.

3. I don't want to be forced to meet requirements to avoid monthly fees

Many of the local banks I dealt with made me jump through hoops to avoid a monthly maintenance fee.

Whether this was making multiple direct deposits per month, paying bills out of my bank account, or maintaining a certain minimum balance, I didn't appreciate the bank trying to control what I did with my cash.

With my online bank account, there's never a monthly fee charged. I've let my balance get very low when paying big bills and waiting for a check to clear; I don't have direct deposit, and they don't charge me anything.

4. I like the generous reimbursement for ATM fees

My online bank reimburses me if I need to use another bank's ATM, so I don't have to worry about scrambling to find a machine that won't charge me to access my own money. This makes it very convenient to access cash when I need it.

5. I prefer the accountholder perks of my online account

The online account I chose provides me with unlimited free checks. It pays me interest on the funds in my account. It allows me access to Zelle to send and receive funds. Many of the local banks I dealt with were missing some or all of these features.

Online banking has many advantages

Because of their lack of physical branches, online banks tend to offer lower fees and better perks for customers. On top of all that, most online banks are FDIC-insured just like traditional banks, which means your deposits are safe even if the bank goes under. While you'll need to compare individual financial institutions to find the right bank for you, give online banks a close look, because you may find they can offer you much more than your local bank can.