6 Responses

1. ChrisCD

   21|Aug|2007 1

   I prefer Brick and Mortar for checking accounts, but don’t mind On-line accounts for CDs/Savings, etc.

   For checking accounts, you are more likely to have day-to-day problems and I have found it helpful and necessary to talk to a live person.

   I use an on-line banks for my savings account and it offers easy tranfers back and forth between my checking account.

   Since we deal daily with CDs that are either with on-line banks/credit unions or a Brick and Mortar in another location, I don’t have a problem with these types of accounts not being close to me.

   In most cases, we have a higher level contact to help us with any issues that arise and rarely have any major difficulty. And since with CDs, you can often find much higher rates by being willing to venture a little outside, it can make sense. My bank offers about 3.5% for most of their CD products. Other banks are offering 5.50% or higher.

2. mark

   21|Aug|2007 2

   I think your reason for having a brick and mortar for your checking account is my motivation too. I like knowing that I can discuss my account with someone face to face. I’m sorry your bank offers such a low rate for CDs, what are other banks in your area offering?

3. David Robarts

   28|Aug|2007 3

   While I like to do banking online, I have not found an online bank that I feel adequately replaces a brick and mortar bank. When the online bank that I have a savings account at started offering a checking account I decided to try it out. The online checking account is not adequate for replacing a regular checking account because it does not offer check writing privileges (I can have them mail me a pre-printed check if I need a paper check for something, but I find it much easier to write a check from my regular checking account) and the only way to make a physical deposit is to mail the check to the bank. Although they do provide an ATM card, you can’t use it for deposits (the ATM network seems to be mostly located at C-stores - nice if that’s where you need cash most often as those ATMs often charge regular bank customers hefty fees). The main reason I use the online checking account for bill payment is that payments I set up for a future date can be seen and edited by my wife (she is a joint owner of the account with a separate customer ID). The online banking for the regular bank that we had been using didn’t share this information between our separate logins.

   Many brick and mortar banks are competing directly with online banks by offering online only accounts. One of the great things about this is that you can get the great online rate without the latency of transferring funds between financial institutions. When I recently shopped for a short term CD, my regular bank beat my online bank’s rate with their online CD account. I’ve also seen regular banks offer online savings accounts.

   One problem with online banks is that you have less assurance that they are really a bank (it’d be pretty hard to set up business as a fake brick and mortar bank and not get caught, but anyone anywhere can build a website). Previously I’ve only used online banks that I’ve heard about by word of mouth; however, I recently learned that you can look up any FDIC insured bank (any legit US bank) to ensure that you are dealing with a legit institution (I imagine other governments with private banking have similar government agencies). Next time I’m shopping for an online bank I might cast my net a little wider.

4. David Robarts

   28|Aug|2007 4

   I find point number 5 funny coming from someone who works at a financial institution. You know that your money is not in the bank branch where you deposit it, your bank invests it in one way or another just like any online bank would (though there may be different rules about how much cash to keep on hand). I think knowing that the funds are FDIC insured is good enough for me as far as my feeling that the money in the bank is real.

5. mark

   28|Aug|2007 5

   With the small amounts of money to my name, it really does all sit in the vault’s reserves.

6. David Robarts

   28|Aug|2007 6

   To go with your point 3:

   No reason the bank will ever charge me a fee on my deposit accounts (provided I handle my accounts correctly). I realize that the bank needs me (and my money) far more than I need the bank.