Can I trust online bank accounts? I received an email from Jordan wanting to know my thoughts on some of the new online only accounts that are popping up. In this episode I will show you what to look for when opening a checking account online.
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The Top Three Question YOU Need To Ask Before Opening A New Bank Account
I'm sure many of you have noticed that there seems to be a new company introducing a new checking or savings account with a long list of great features every month.
When more companies invade the banking space, they add much needed innovation by providing incentives and tools that the big banks can’t compete with.
It is my hope that that will eventually force banks to lower and eliminate fees that aren't necessary for their daily operations.
When I'm choosing a bank, there are a few things that I look for.
Are my deposits going to be FDIC Insured?
FDIC stands for Federal Deposit Insurance Corporation, and they ensure your deposits in the event that the bank fails. The FDIC will cover you for up to $250,000 per FDIC insured bank for each account ownership category. If a bank is not FDIC insured, I say pass.
The four accounts that I looked through, Stash, Acorns, Wealthfront, and Betterment, are all FDIC insured. Make sure that you do your research before you sign up for any new checking account.
Are there any fees associated with my account?
There are so many free options right now that I wouldn't even consider paying a fee to have a checking or savings account with any bank.
This is one of the reasons why I highly recommend credit unions. Credit unions are known for being customer friendly and having rock-bottom fees. If you are fortunate enough to have one in your area, check them out!
They're not known for having the latest technology, but their customer service moves them to the top of the list.
How easily can I access my money?
- Is it easy to transfer the money out?
- Do I get a debit card?
- Are there free ATMs for me to use?
All of these things are going to be factors that you want to consider, because you don't want to put your money somewhere you can't pull it out and use when you really need it. This is also extremely important if you’re considering an online bank account. They have the obvious limitation of not having a physical location for you to visit.
These are just a few of the things that I look for when opening a new checking account. There's always going to be hype and a lot of mentions of these new products in the news, but don't let that push you to open up something before you really go through and read what it is that you're going to get yourself into by opening this new account.
Have you ran into any issues or limitations that you weren't expecting when opening an online bank account? I’d love to hear about your experience.
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