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Your guide to online banking

Find out what it means to online bank, how to do it, its pros and cons and more.

This article was reviewed by Marguerita Cheng, a member of the Finder Editorial Review Board and award-winning advocate for ethical financial planning for over 20 years.

Online banking is a quick, easy and convenient way to manage your everyday finances. But how do you find an online bank that works for your needs? Explore our guide to online banking and uncover its benefits and drawbacks.

What is online banking?

Online banking lets you manage your finances and transact your business through a bank’s website or mobile app. Instead of visiting your nearest branch, you can sign in to your online account to pay your bills, make a deposit or transfer, check your balance and more.

5 things to look for in an online banking platform

Consider these factors when choosing an online banking platform.

  1. Easy account management. Check your balance, access your transaction history, transfer money, set up account alerts, freeze your debit card, e-deposit paper checks, pay bills and more — all from your mobile phone or computer.
  2. ATM locator. Most apps and websites have an ATM locator so you can withdraw cash at the location nearest you.
  3. Useful tools. Depending on which bank you choose, you may get access to currency converters, home loan repayment calculators, stock trading calculators and other tools.
  4. Peer-to-peer payments. Many online banks partner with platforms like Zelle let you receive and send money to friends and family for free.
  5. Live chat. It’s common for online banks to offer live chat support in addition to phone and email support.

How do I set up online banking?

Opening a bank account online is becoming the new norm — and it usually takes less than 10 minutes. Here’s how you do it:

  1. Find the right online bank for you.
  2. Visit the bank’s website and follow the prompts to start the application process. You’ll usually see buttons that say “Apply Now” or “Open Online.”
  3. Create your account using your name, email address and password.
  4. Enter your personal information, including your Social Security number and government-issued photo ID number.
  5. Fund your account by making your initial deposit.

Once you’ve opened your account, you can then log in to monitor your balances, move money across accounts and set up features like autopay.

How do I register for mobile and tablet banking?

After you’ve set up online banking on your desktop, download your bank’s app and follow the directions. If your phone allows it, you might be able to connect your debit or credit card to Apple Pay, Google Pay or other digital wallets.

Should I choose an account based on its online banking system?

If you live your life through your smartphone, mobile banking could be the deal breaker between competing bank accounts. Some banks offer more advanced online banking capabilities than others, like mobile check deposits and statements that integrate with your existing accounting software.

Remember to compare fees and features on mobile banking apps. You may find that more expensive bank accounts offer more helpful online banking services.

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How do I access money in an online bank account?

While most online bank accounts don’t accept cash deposits, there are still several ways to access your money:

  • ATMs. Most online banks have nationwide ATM networks and offer ATM reimbursements when withdraw cash from an out-of-network ATM.
  • Direct deposits. Receive your paycheck or government benefits directly into your online bank account.
  • Mobile check deposits. Most mobile apps let you e-deposit checks with a few clicks of a button.
  • Cash back at retailers. If your account comes with a debit card, you can request cash back when you check out at a grocery store or major retailer.
  • Transfers. Send and receive money to another bank account or initiate a wire transfer or peer-to-peer transfer.

What are the pros and cons of online banking?

Online banks have several pros and cons compared to traditional banks:

Pros

  • Lower fees. Online banks have lower overhead than traditional banks, so they’re able to pass those savings onto you in the form of lower fees.
  • Higher interest rates. Lower overhead costs mean online banks are also able to offer higher APYs that can top 0.6% or higher compared to traditional banks that offer lower rates.
  • Easy to set up. It takes a few minutes to apply for an online account, compared to traditional banks that may require you to visit a branch.
  • Larger ATM networks. Online banks typically have large ATM networks spread across the nation. Some even offer ATM rebates for when you need to use an out-of-network machine.

Cons

  • Not all online banks are equal. Some online banks offer more sophisticated services through their mobile banking platforms, while others allow the basics only.
  • At mercy of technology glitches. Although uncommon, a blip in service can prevent you from accessing your money until the problem’s resolved.
  • Requires internet. You may still be able to bank online through your mobile phone if you lose internet, but message and data rates may apply.
  • No branch access. Unlike traditional banks, you can’t visit your local branch to deposit cash when you need to. However, some online banks accept cash deposits at ATMs.
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What is the best online bank?

One of the best online banks is Ally Bank because it offers a variety of banking products, including checking, savings and money market accounts, with competitive interest rates. And even though it’s a digital bank, you’ll still get easy access to your cash with its large ATM network all over the country. Plus, it’ll even reimburse you for non-network ATM fees — up to $10 a month.

Popular banks that offer online banking

These popular banks offer robust online and mobile banking options to customers.

Financial institutionOnline bankingMobile banking
Bank of AmericaBank of America Online BankingBank of America Mobile Banking
BB&TBB&T Online BankingU by BB&T
Capital OneCapital One Online BankingCapital One Mobile
ChaseChase Online BankingChase Mobile
CitibankCiti Online BankingCiti Mobile
HuntingtonHuntington Online BankingHuntington Mobile
M&TM&T Online BankingM&T Mobile Banking
PNCPNC Online BankingPNC Mobile
Regions BankRegions Online BankingRegions Bank
SantanderSantander Online BankingSantander Bank US
TCF BankTCF Online BankingTCF Bank
TD BankTD Online BankingTD Bank (US)
Wells FargoWells Fargo Online BankingWells Fargo Mobile

How safe is online banking?

Online banking isn’t 100% risk-free, but most banks use industry-standard security measures to keep your information safe. Before you bank online, make sure the financial institution you choose is FDIC or NCUA-insured. That way you get your money back if the bank fails. Next, read through the bank’s security policy to see which measures it has in place to protect your account.

How to protect your online bank account

With the rise of the internet, banks have kept up with comprehensive security and encryption to protect your personal and financial information. Still, you can take measures to keep your online banking safe from financial predators.

  • Find a secure network. Avoid public Wi-Fi or hot spots when accessing your account. Hackers are known to intercept account info and passwords on these unsecured networks.
  • Choose a strong password. Use a unique mix of lower- and uppercase letters, symbols and numbers that you’ll remember. And don’t share your log in details with anybody else.
  • Review your statements. By regularly reviewing your transactions, you’ll more easily spot unauthorized charges or unnecessary fees.

What’s the difference between digital and online banks?

Many people use the terms “digital bank” and “online bank” interchangeably, but they’re not the same thing. Online banks closely mimic traditional banks and are often built with the same infrastructure. But digital banks use new technology to create out-of-the-box banking solutions to help you better manage your money.

Compare accounts with online banking

Use the table to compare and sort online bank accounts by APY, minimum balance, features and more.

Name Product APY Minimum deposit to open ATMs Out-of-network ATM fee
Aspiration Spend & Save Account
Finder Rating: 3.8 / 5: ★★★★★
Aspiration Spend & Save Account
Up to 1.00%
$10
55,000 free in-network ATMs
$0
Deposits are fossil fuel-free and insured by the FDIC. Enjoy a spend and save combo account with unlimited cash back rewards and a $100 bonus when you spend $1,000 in your first 60 days.
Chase Total Checking®
Finder Rating: 3 / 5: ★★★★★
Chase Total Checking®
N/A
$0
Access to 16,000 ATMs and more than 4,700 branches nationwide
$2.50
Chase Total Checking is easy to use and gives you access to 16,000 ATMs and more than 4,700 branches. It offers a $225 signup bonus to new Chase customers
Chime Spending account
Finder Rating: 4.7 / 5: ★★★★★
Chime Spending account
N/A
$0
60,000+ fee-free ATMs
$2.50
Get rid of fees with this financial app offering consumer-friendly accounts. Chime can also help you save easily and access your paycheck faster.
Axos Bank Essential Checking
Finder Rating: 5 / 5: ★★★★★
Axos Bank Essential Checking
N/A
$0
ATM fees reimbursed at any ATM nationwide
No fees. Unlimited domestic ATM fee reimbursements.
OnJuno
Finder Rating: 4.8 / 5: ★★★★★
OnJuno
Up to 1.20%
$0
more than 85,000 ATMs nationwide
$0
OnJuno embraces an open banking system for everyone, regardless of their age, location, or income.
N26
Finder Rating: 4.5 / 5: ★★★★★
N26
N/A
$0
Fee-free ATM withdrawals at Allpoint ATMs
$0
A digital bank account with no hidden fees, no minimum account balance and no maintenance charges.
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Compare up to 4 providers

Bottom line

Online banking can streamline your ability to manage your finances without stepping foot in a bank. But the features and benefits you’ll find online depend on the bank or other financial institution you choose to do business with. As always, compare accounts from top online banks to find one that has the online banking features you need.

Frequently asked questions

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