The banking industry may have started with the goal of storing money, but it has now evolved past that singular purpose. Now, banking is integral to achieving major life goals and performing everyday transactions alike.
Along with the many evolving branches of traditional banking, the emergence of digital banking has further advanced the industry. With that being said, it also brings about a slew of questions about the effectiveness, suitability, and ease of use of each option.
If you are in the process of choosing your primary banking method, the following comparison between brick-and-mortar and online banking can help you make an informed decision.
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The Advantages of Traditional Banking
Traditional banking refers to institutions with typical bank branches. From different home loan options to a range of certificate of deposit (CD) products, these banks are known for offering a variety of financial solutions.
Wide Range of Options
While online banking providers such as CCU virtual branches let you access banking solutions from the comfort of your home, you may have a wider range of institutions to choose from in traditional banking.
If you prefer talking face-to-face with company representatives, the in-person communication of traditional banks might be ideal for you. Active human communication can also add a hint of personalization to your banking.
Easier Cash Deposits
If you use solutions such as the Dave Ramsey cash envelope system, you may find it easier to make your cash deposits through the vast network of branches in traditional banking.
The Drawbacks of Traditional Banking
Despite its benefits, brick-and-mortar banking does have its disadvantages. These drawbacks range from slow processes to accessibility barriers, which leads to the popularity of fintech startups and online banking.
While some traditional banks offer online banking services in conjunction with their core solutions, other brick-and-mortar banks lag behind on these services. This adds unnecessary delays and additional steps to banking processes.
High Banking Fees
No matter if you use digital solutions such as the YNAB app or analog options such as journals, you know the importance of budgeting. However, traditional banks can put a dent in your calculations with their high fees.
The Advantages of Online Banking
Online banking uses digital systems to fulfill your banking needs. This allows you to open accounts, apply for credit cards, and use ATMs without having to walk into a branch.
If you have been learning key information on AI, its rapid availability may stick out as one of its biggest advantages. This also holds true for online banking solutions that are available around the clock.
Instead of having to visit the branch and put up with waiting times, you can use online banking apps to fulfill your requirements without these hassles. If you use time-management solutions such as the Calendly app, this sets you free from cramming banking visits into your schedule.
Low Banking Fees
By cutting down on running expenses for branches, online banking providers are able to offer their solutions with minimal to no fees without compromising on quality. This makes it a highly affordable banking option.
The Drawbacks of Online Banking
In addition to its perks, the online banking approach also has some shortcomings. This mainly refers to a lack of face-to-face support and no branch banking solutions.
No In-Person Support
While online banking provides you with support through phone calls or chat, it does not allow you to sit across from a relationship manager to discuss your needs in the traditional sense.
Trickier Cash Deposits
The lack of branches makes cash deposits quite a tricky subject for online banking accounts. This means that you often have to deposit cash into a traditional banking account before you can transfer it to your online account.
Which Banking Approach is Better?
Since everyone has different needs and preferences for handling their finances, the “better” banking solution varies from person to person. By going through the above details side-by-side, you can become more informed about how brick-and-mortar banking works as compared to its online alternative. In turn, you can choose the approach that suits you best.
With that being said, you can also utilize both options at once for maximum convenience. While this approach requires you to manage multiple accounts, it gives you the best of both worlds.