Mobile-only banks are becoming increasingly popular, especially as financial institutions try to adapt to keep up with changing consumer demand. They combine convenience with lower fees, however there are some things you should consider before switching to a mobile-only bank.
Be sure to keep reading to learn all about the pros and cons of switching to a mobile-only bank. It is important that you are informed of everything before switching.
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How Mobile-Only Banks Operate
Mobile-only banks allow you to do basic banking tasks all through an app that can be downloaded on your smartphone or tablet. Some features include setting up a new account, paying bills, checking your balances and transferring money to other people. In addition, you get a debit card for making purchases. You can also add money to your account through direct deposit, mobile check deposit or by transferring funds from another bank.
Mobile-only banks are usually backed by separate financial institutions, so your account is covered by the same FDIC insurance limits as a brick-and-mortar or online bank. With regards to security, most of the apps offer the same level of safety that you’d get from banking online.
Pros of Mobile-Only Banks
The most attractive feature of mobile-only banks is the simplicity and convenience of it. The apps are not overly complex and it is simple to use them for basic functions. For instance, if you want to pay bills online, you can simply take a picture of the bill to set up payments. Additionally, if you want to pay a friend back, there’s no need to go to an ATM because you can send money instantly through your phone.
In addition to the many great features on the apps, there are also low fees that come with mobile-only banks. For example, some banks have no monthly maintenance fees. Furthermore, if you need to access an ATM, there are thousands of them that are fee-free.
Cons of Mobile-Only Banks
Although mobile-only banks are great for someone who just needs the basics of banking, it can be problematic if you’re looking for more. For instance, the apps are designed to be for a single person, so if you want to open a joint account, you might have to look elsewhere.
Additionally, I wouldn’t recommend a mobile-only bank if you’re looking for something other than a basic checking account. For example, money market accounts and mortgage loans aren’t available yet.
Lastly, mobile banks don’t give you the opportunity to have face-to-face support that may be necessary to effectively manage your money. If you need a check or money order, you would have to go to another bank and might have to pay a fee. Furthermore, depositing cash might be difficult with a mobile bank.
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Author’s Verdict
If you already do the majority of your banking online, switching to a mobile bank won’t be too different. However, you might need to hang on to your existing checking account or set up an account at an online bank if you want to build up your savings, have access to checks or take advantage of premium banking services.
In addition, we have a list of bank promotions to get some extra cash in your pockets today. You may also want to check out savings accounts if you want to get started on saving up money.
