What is Online Banking?

Online banking and traditional banking share many of the same features, though there are also notable differences.

An online banking service doesn’t have a physical, brick-and-mortar location like a traditional bank.

However, online banking typically offers many of the same services as traditional banking, including electronic fund transfers (EFT), access to ATMs, direct deposit, and the ability to make debit card purchases.

With online banking, you can perform transactions and monitor your bank accounts from a web browser or mobile device 24/7 – no need to visit a physical location.

Once your account is open, online banking lets you manage your money anytime, anywhere. You can:

• Check balances and transactions in real time to track spending or spot unusual activity.

• Transfer funds between accounts or send money to others instantly.

• Pay bills and set up recurring payments to avoid late fees.

• Deposit checks securely using your mobile device’s camera.

Moving your bank account online gives you 24/7 access to your finances from your computer or phone—no branch visit required.

Online banking through a credit union or bank offers a full range of services designed to simplify financial management. Many online bank account options include the following services and features:

Mobile check deposit

Deposit checks directly into your account using your smartphone’s camera.

Saving and budgeting tools

Manage your expenses by automatically categorizing your transactions and tracking your savings goals.

Real-time account monitoring

Check your balance 24/7, even outside regular business hours.

Easy automatic payments

Pay recurring bills automatically to reduce the risk of missed payments.

Automated savings features

Stash a percentage of your paycheck in your savings account automatically to help reach your savings goals faster.

Digital payment system integration

Use Apple Pay^®, Google Pay^®, or a similar system for seamless online and in-store transactions.

Credit card and loan management

Check your balances and pay your bills to avoid late fees and additional interest charges.

Secure online statements

Instantly view your account history without waiting for statements to arrive in the mail.

Cardless ATM withdrawals

Use your mobile app to withdraw cash, even if you don’t have your debit card with you.

24/7 online chat and customer service

Speak to a customer service agent to get the answers you need without having to visit a bank branch.

Like any other financial service, its important to be clearheaded about the pros and cons of online banking. Here’s a closer look.

Pros of online banking

Online banks often prioritizes user-friendly digital platforms, offering a range of features designed to save time and reduce costs.

• Convenience. Manage your finances, including transferring funds and paying bills, from the comfort of your home or on the go with just a few clicks.
• 24/7 account monitoring. Check your account balances, payments, deposits, and more at any time of the day or night.
• Faster and safer transactions. Complete transactions quickly using a secure connection to prevent identity theft and other security concerns.
• Lower fees. Bank without the fees – enjoy reduced ATM fees, minimal maintenance charges, and fewer account service fees.
• Higher interest rates. Earn a higher return on your savings than with a traditional brick-and-mortar bank.

Cons of online banking

While online banking offers numerous advantages, it also has a few potential downsides. Here are some main downsides of banking online.

• You need an internet connection. Technical issues or website maintenance could temporarily limit access to your accounts.
• Harder to deposit cash. You’ll need to find in-network ATMs that accept cash deposits, which could be less convenient than visiting a physical location if there isn’t a large fee-free ATM network.
• Potential security concerns. Opening an online bank account is generally safe, but there’s still a small risk of phishing attacks or data breaches.
• No physical branches. This can be inconvenient if you need face-to-face assistance for more complex issues.
• Fewer product offerings. You might need to go elsewhere to open a certificate of deposit (CD), money market account (MMA), or investment account.

Here are some important questions to ask yourself to help you decide whether online banking is a good fit for you.

• What services are you looking for? Different financial institutions offer different types of bank accounts, features, and benefits, so identify what’s most important to you and verify that these services are offered.
• How secure is your information? ​​Investigate their security measures and track record in handling data breaches. A bank with a solid reputation for security is more likely to be effective in protecting your personal and financial information.
• What customer support do they offer? Assess the quality of customer service provided by the online banking service. Consider availability and the channels used for support, like phone and chat.
• How can you deposit cash? Check whether there are in-network ATM branches near your location that support cash deposits.
• How important is in-person service to you? Consider your comfort level with conducting all banking activities digitally or whether you prefer the reassurance of speaking with a banker in person.

Opening an online bank account is quick and convenient. Once you’ve chosen an online bank, follow these steps:

1. Go to the bank’s website or download its mobile app.

2. Select the type of account you want to open (checking, savings, or both).

3. Complete the online application and upload any required identification documents.

4. Fund your new account by transferring money or setting up direct deposit.

5. Set up online access and automatic bill payments so you can start using your account right away.

In Reddit’s r/personalfinance community, users generally agree that online banking isn’t a mysterious new trend — it’s just the next step in everyday banking convenience.

One user summed it up simply:

“It’s just like a normal bank–just no physical location to walk into.” — r/personalfinance

Others describe how easy it is to manage money from anywhere:

“You deposit via the app or by transferring money from your checking account. Check deposits via the app should credit the next business day (unless there’s a hold), and transfer deposits will take 2–3 days.” — r/personalfinance

And when it comes to benefits, many highlight accessibility and affordability:

“Pros: It’s common to have more “free” services (more free withdrawals, no monthly fees on accounts). Very convenient for those who do little/no cash transactions. Can have more accommodating customer service than regular banks.” — r/personalfinance

Reddit’s key advice: Online banking makes money management easier

Online banking combines the same core functions as traditional banking— checking, saving, transferring, and depositing— with the added flexibility of digital access and fewer fees.

That’s exactly what Chime offers: a mobile-first platform with no monthly fees, no minimum balance requirements, and over 47,000 fee-free ATMs, all designed to help you manage your money wherever you are.

Whether you want to simplify your finances or manage your money using the latest technology, online banking can bring a world of convenience to your financial life. Weigh the pros and cons of online banking to see if it’s right for you.

Opening an online bank account through Chime is fast and easy, so you can start using your account in minutes.