Are You Considering an Online-Only Bank?

Believe it or not, the roots of online banking stretch back to the 1980s. According to historical records, Bank of Scotland offered a service called Homelink in 1983 that allowed people to pay bills and transfer money via the internet. At that time, you could only hook up to the ‘net by using a landline telephone or a TV.considering-an-online-only-bank

We’ve come a long way since then, to the point where online-only banks like Bank5 Connect have made noticeable inroads in the banking world. Not having to go to a physical location to conduct your banking transactions is becoming more the norm than ever before.

So what in particular has motivated millions to go this route?

Convenience and flexibility. There’s no longer a need to get dressed, drive to the nearest branch, and wait in a teller line to deposit money into your account. With an online bank, you can use a mobile app to snap a photo of your check, even if you’re lying in bed in your pajamas! Plus, you don’t have to wait until a bank branch is open to conduct transactions or to check on your account activity. You can do that, and more, practically any time of day using a laptop, desktop, smartphone or tablet. It’s banking on your terms, where and when you want to do it.

Insured deposits. Most, if not all, online-only banks are insured by the FDIC. This means that deposit accounts at FDIC member online-only banks are covered in the same manner as accounts at their brick-and-mortar counterparts. FDIC insurance protects each customer’s deposits, up to $250,000 per financial institution. However, it’s possible for you protect all of your deposits, even in excess of FDIC limitsAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon!. One way to accomplish this is to open an account at a Massachusetts-based online bank, like Bank5 Connect, that offers DIF insurance in addition to FDIC coverage. DIF (the Depositors Insurance Fund) insures any deposits above the FDIC limit.

Lower fees, higher interest rates. Because online-only banks typically have lower costs (as in no physical branches to maintain), they can pass their savings on to their customers. Fees are generally lower and interest rates on deposits are generally higher with an online-only bank than with a brick-and-mortar institution.

Some people are hesitant to move their money from a brick-and-mortar bank to an online-only bank due to the fact that they’ll have less direct contact with the bank and its employees. There can be a concern about not being able to walk into a branch and speak with someone when something goes wrong with an account. In order to alleviate this fear, it’s important to choose an online bank that offers strong customer support like extended phone support hours or a live chat feature. It’s also a good idea to read some reviewsAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon! from actual customers to get a sense of what call center hold times might be like, or how satisfied customers are with their overall ability to reach the bank.

Another common reservation people have about online-only banks is a fear about not being able to easily access their money. If you decide to go with an online bank that has no physical branches or dedicated ATMs, how will you make a cash withdrawal? To ensure you’ll have ample opportunity to withdraw your money as needed, you should thoroughly research the bank’s ATM policy. Some online banks are part of a national ATM network, meaning you can use any ATM in that network without incurring fees. Others will reimburse you for ATM fees. Bank5 Connect offers a mix of both. Bank5 Connect is part of the SUM ATM NetworkAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon!, which is comprised of thousands of ATMs across the United States. In addition, Bank5 Connect will never charge its customers for using an ATM outside of the SUM Network, and will reimburse other banks’ surcharges up to $15 per statement cycle.

If the perks of online-only banking align with your lifestyle, it might be time to make the switch and find an online bank that best suits your needs. Just be prepared to spend more time in your pajamas!

Ways to Avoid Those Pesky ATM Fees

No one likes paying fees to access their own money, but if you use an out-of-network ATM, there’s a good chance that’s exactly what’s going to happen. And unfortunately, ATM fees continue to climb. According to a recent Bankrate surveyAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon!, ATMs on average charged $2.90 to let non-customers withdraw money in 2016, compared to $2.88 in 2015.ways-to-avoid-those-atm-fees

And the fees don’t stop there. Your own bank will likely also slap you with a fee for using an ATM outside of their network. The Bankrate survey revealed this charge to be an average of $1.67 in 2016, up 1.8% from the year before. So, with both fees, you’re looking at an average cost of $4.57 to withdraw your own money from an out-of-network ATM.

The good news, is that there are sure-fire ways to avoid these types of ATM fees. The first and most obvious method is to refrain from using an ATM outside of your bank’s network. If you’re planning a trip, be sure to take out enough cash from your regular ATM or bank beforehand. Or, prepare yourself by checking to see if there will be any in-network ATMs around your destination. In this day and age, it’s easier than ever before to locate an ATM within your bank’s network. Most banks have this information available on their website or mobile app.

Some banks are also part of a “shared” ATM network. In a shared network, customers of one bank can usually use the ATMs of the other participating banks without incurring any surcharges. Bank5 Connect is part of the SUM ATM network, which includes thousands of ATMs across the country. Bank5 Connect customers can withdraw money at any ATM within the SUM network, surcharge-free. Visit a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon! to see find a SUM ATM in your area.

Another way to avoid ATM fees is to open an account that offers reimbursements for ATM fees. Many online banks are able to offer these types of ATM fee rebates because “online-only” accounts cost them less money to operate. With Bank5 Connect’s High-Interest Checking account, customers are never charged by Bank5 Connect for using an ATM, and we reimburse other banks’ surcharges up to $15 per statement cycle.

If all else fails and you’re on-the-go and need fast access to cash, going the “cash back” route could also be a good alternative to using an out-of-network ATM. Many brick-and-mortar stores allow you to request cash back when you make a debit card purchase using your PIN number. So, rather than paying around $24.57 to take $20 out of an out-of-network ATM, you could buy a soda or a bag of chips for $1.50, and request $20 cash back. Your debit card gets charged $21.50, and you walk out with a snack and a crisp $20 bill.

So, stop giving your money away! If you do a little planning ahead, it’s easy to say no to ATM fees.

Should You And Your Spouse Use Joint Accounts or Separate Accounts?

It’s a question that inevitably comes up when two people marry. Should they continue to utilize their own separate checking and savings accounts, or should they merge their finances into joint bank accounts?AdobeStock_90060964

What works for one couple may not work for another. Because both banking approaches each have their own set of advantages and disadvantages, it’s important to explore, discuss, and weigh all options before arriving at a mutually agreeable decision.

Some of the distinct advantages of joint bank accounts include:

  • Because a joint account generally results in more money being pooled together, it can help with avoiding account fees such as those associated with maintaining a minimum monthly balance.
  • With a joint account, both parties have access to the money in it. This can prevent you from having to frequently transfer money between your account and your spouse’s account, and it can also be convenient in an emergency, or if one spouse passes away.
  • It can make it easier to handle shared expenses and bills. Instead of having to determine how much money should come out of your individual accounts each time a payment is due, you can simply write a check, or schedule bill payments, directly from your joint checking account.
  • Because both spouses can see the spending habits of the other, there is an increased level of accountability with a joint account. With both of you viewing the money as “our” money instead of “my” money and “your” money, there’s also a higher likelihood of financial communication regarding the household’s budget and purchases.
  • If either you or your spouse is a stay-at-home parent, a joint account could help alleviate tension and resentment. Since the stay-at-home spouse doesn’t have a traditional salary to place into their own separate account, having access to the funds in a joint account could help them to feel valued and compensated for work they do inside of the home.
  • In the event that one spouse loses their job or is out of work on medical leave, having a joint account already in place can prevent you both from having to merge your money at the last minute. It can also prevent you from having to cancel and re-do any bill payments that may have previously been scheduled from the out-of-work spouse’s account.

On the flip side, merging your money into a joint account has some disadvantages as well. These include:

  • Some couples associate a joint account with having to surrender their financial independence. With a joint account you and your spouse could feel trapped without each having access to “your own” money.
  • With many couples marrying later in life, there’s a good chance of both parties coming into the marriage with their own finances already in good, working order. For example, you both may have bill payments scheduled from your own individual checking accounts, or you may have your pay from work directly deposited into your own account every week. These things could be a bit of a hassle to un-do and re-do, so some couples may prefer to leave their accounts “as is” after they tie the knot.
  • With a joint account, there is a lack of privacy in regard to your finances. You may not want your spouse nagging you about that coffee you buy on the way to work every morning, or maybe you just want to be able to buy them a present without them seeing the transaction details on your joint debit card statement!
  • If one spouse enters the marriage with student loan debt or alimony or child support obligations, the other spouse could become resentful if those payments or to be made from joint funds.
  • When bills are paid out of a joint account, it’s fairly typical for one spouse to manage the couple’s finances. This could eventually turn into a point of friction if the spouse who’s managing the money starts to view the job as a burden or chore.
  • In the event of a separation or divorce, a joint account can become a bit challenging. Because both parties have legal access to the money in the account, it’s possible for one spouse to drain the funds without the other knowing. Even if you both leave the money where it is, it can be messy determining who gets exactly what from a joint account after the relationship is over.

As you’re deciding which type of account is right for your marriage, keep in mind that there is a third option – having a combination of both joint and separate accounts. Some couples keep a portion of their incomes in separate accounts so they can still access “their own” money, while each contributing to a joint account as well. A joint savings account could be used to save for things like a down payment on a home, college tuition, or a vacation, while a joint checking account could be used exclusively to pay major monthly bills such as mortgage payments or utilities.

No matter what banking approach you decide to use, it doesn’t hurt to revisit the arrangement on a regular basis to determine if it’s still the best fit for your family.

You can learn more about Bank5 Connect’s High-Interest Checking Account here:

You can learn more about our High-Interest Savings Account here: