There are a number of pros and cons to banking with a bank that has no “brick and mortar” presence. Let us look at a few.
- Online banks tend to have better rates. They have fewer expenses because of having less overhead. Therefore, they can give better interest rates and they can have lower fees.
- Online banks can be much more flexible and easy to use. You do not have to bound to the times and places where the banks are open. You can conduct your business whenever and wherever you like.
However, online banks do have their drawbacks as well. For example:
- Online banks make security somewhat more difficult. When you are working with an online bank, everything that you do happens online. That means it is all susceptible to being hacked and otherwise compromised.
- Online banks do not allow you to build relationships with actual people. If you have a local branch of your bank, you can go in there on a regular basis and get to know people. This makes it more likely that you will get really good service in the event that you need something at all unusual. For example, brick and mortar banks can be much better for small businesspeople who might need a lot of services.
Thus, there is a general tradeoff between convenience and the ability to build personal relationships.