The steady rise of online banking apps and accounts has made banking easier, safer, and more convenient. Many online-only banks don’t have brick-and-mortar locations but often come with many useful features and services that traditional banks may not have.
If you’re interested in switching to an online bank, check out the top modern features of online banking to look for when picking an account.
7 top features of online banking
Not all bank accounts are created equal. While most online-only banks offer the same services and features as a traditional bank — often more — every online bank is different. Look for features of online banking that will save you time and money and give you peace of mind that your money is safe and secure.
1. Safety online banking features
You may be wondering, are online banks safe? The short answer is yes. Online financial institutions come with many safety features to protect you and your money. When considering an online-only bank, look for the security measures it has in place.
Many online banks use tools like multi-factor authentication, encryption, and firewalls. They may also require using secure browsers to protect your data from hackers. Along with looking for features like these, make sure the bank is FDIC-insured, which covers each of your accounts up to $250,000.
2. Mobile banking app
Many online bank accounts come with intuitive mobile banking apps that allow you to easily access your account on your phone. These apps should be able to handle everything from tracking your spending and savings to paying friends on the go.
Look for an app that works on all smartphone devices and allows you to transfer money, check your account balances, deposit a check, and even grow your savings automatically.
See if the app accepts mobile check deposits, offers fee-free mobile payments and money transfers, and includes online bill pay. You should also be able to set up app notifications, like transaction alerts, and get customer support if you run into any issues.
Some other handy features of online banking apps include spending and savings trackers and other budgeting tools.
3. Early direct deposit
It’s usually a wise decision to sign up for direct deposit. Direct deposit minimizes paperwork and hassle and allows you to get your paycheck faster. Many online banks offer direct deposit, but only a handful allow their customers to receive their paychecks early.
Look for an account that has early direct deposit. For example, when you open an account through Chime, we help you Get Paid Early.
4. ATM withdrawals
Despite the move to handle your finances online, you might still need to access cash. Luckily, switching to an online-only bank doesn’t mean you lose out on ATM and debit card services. Several online banks and financial institutions maintain relationships with ATM networks and offer a method of quickly locating ATMs via their banking app.
Many online banks don’t charge in-network ATM fees, or they offer fee reimbursements.
Keep in mind, though, that not all online banks offer a way to deposit cash back into your account.
5. Built-in automatic savings
When switching to an online banking service, look for one with an automatic savings feature. This feature allows you to automatically set up fund transfers from your checking account to your savings account. You can also transfer a portion of your paycheck directly into your savings account.
For example, Chime offers two features to help you save money automatically. Chime’s automatic Round Ups transfer spare change to your savings account every time you use your Chime Visa debit card.1 You can also sign up for Save When You Get Paid to automatically transfer 10% of your direct deposits of $500 or more into your savings account.2
6. Credit-building features
Building credit can take time, but if you look for an online account with built-in credit-building features, you can speed up the process. Look for features that turn your everyday purchases into credit-building opportunities.
A few online banks and financial institutions offer credit-building support. For example, Chime offers the secured Credit Builder Visa® Credit Card that helps you build your credit. Members see an average increase of 30 points.3,4
When you’re on the hunt for credit-building features, look out for things like cash-advance features, automatic balance payments, and credit bureau reporting.
7. Fee-free overdraft
Brick-and-mortar banks have considerable operational expenses that online banks don’t. With an online bank or online financial institution, fees can be kept to a minimum because of the lower overhead costs associated with an online business. You can potentially save on fees that most traditional banks would charge their customers, like overdraft fees.
Consider switching to an online account with fee-free overdraft protection. Some online accounts, like those through Chime, offer their own version of overdraft protection that safeguards members from any payments or withdrawals that would result in a negative balance. Chime’s SpotMe feature allows users overdraft up to $200 on debit card purchases with no fees.5
Online banking features and advantages
Along with the features and services, online-only banks offer several advantages over traditional brick-and-mortar banks, including potentially lower fees and higher interest rates, 24/7 customer support, and easier access to your money.
Here are some of the most useful features of online banks:
- 24/7 account and service access
- Online bill payment
- Higher interest rate offers
- Lower fees
- High-yield accounts
- Automatic savings features
- Mobile deposits
- Immediate access to your bank statements
- Money transfers between accounts
- Alerts can be set up to monitor fraud
- Alerts can be set up to inform you of transactions and balance activity
- Enhanced security
- Early tax refunds
- Check deposits
- Customer service over the phone, web chat, and email
Is online banking right for you?
When switching to a new bank account, look for the features and services that will ultimately make your life easier and better support your financial wellness. There are accounts out there that can meet all your financial needs — all you have to do is look for them.
For more banking options, check out these four types of bank accounts for storing and saving money.
Are online banks safe?
Yes, online banks are safe. With standard security measures, online banks are just as safe as traditional ones. Look for safety features like encryption, multi-factor authentication, and fraud monitoring. Before you open any bank account, make sure the FDIC insures the bank or financial institution. You can also take measures to ensure secure online banking, like avoiding public Wi-Fi networks, using a strong password, and keeping anti-virus software up to date.
How does online banking work?
An online-only bank is not much different from a traditional bank e fact that it doesn’t have a physical brick-and-mortar location. All your banking needs are managed exclusively via the web or mobile app. With a simple internet connection or data from your phone, you have access to all your banking needs at any time of the day.
How do I open an online-only bank account?
Opening an online bank account is simple and can be done instantly using a computer or smartphone. Each account might vary, but, in general, you’ll want to do the following:
- Apply for an online bank account and download their mobile app. Go to the site or app of the online bank account, fill out the application, and then provide your personal information and verification.
- Once you apply, you’ll want to set up direct deposit to fund your account.
What are the features and benefits of online banking?
Some features of online banking you might come across include early direct deposit, fee-free overdraft, 24/7 account access, mobile banking, high-yield accounts, automatic savings, and online bill payment. You may find different online banking features from other banks, so review each bank’s offerings to ensure its account features fit your needs.
What are 3 advantages of online banking?
Three advantages of online banking that you can find at many online banks are 24/7 account access, online bill pay, and high-yield accounts. Since online banks don’t have to pay for physical branches, they can often funnel these savings back to customers through high-interest checking and high-yield savings accounts. These accounts offer higher-than-average interest rates, allowing you to earn money on your balance over time.
What are two common online banking features and services?
Two common features of online banking are high-yield accounts and online bill payments. Online banks usually offer user-friendly mobile banking apps and low (or no) fees.