Are Online Only Banks Safe?

By: Eliana Sagarin

Ridesharing, food delivery, money transfers, news, exercise routines and more -- all in the palm of your hand. The world is rapidly becoming a more digital place. Is banking the final frontier?

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What is Online Only Banking?

It’s a bank. That’s only online. Next question?

Just kidding. Online only banks might sound straightforward, but the transition from a physical branch to a mobile or desktop banking experience shouldn’t be taken lightly. Without a physical branch, all transfers, deposits, and bill paying takes place on the internet-- on a mobile app or desktop. Your spending is already making a digital transition, why shouldn’t your banking? 

Of course, more traditional brick-and-mortar banks have also hopped on the digital bandwagon with sophisticated mobile apps and online bank account access. Online-only banks take it one step further, with customers reaping the benefits.

NBKC offers a range of digital banking toolsLearn more

The Benefits

When banks go digital, customers can end up with more bang for their buck. Since online banks aren’t paying rent or other utilities, online banks often offer lower fees and higher interest rates for their customers. Many online banks offer a wide ATM network, making sure you’re never far from a fee-free option to withdraw and deposit cash and more.

Safety is obviously a big concern for those looking to make the transition into online-only banking. Reputable and well-established online banks are secured with the latest security systems, making them as safe (if not safer) than traditional banks. Before making the switch, make sure to do your research to ensure that the online bank of your choice makes safety a top priority. Keep your eyes peeled to ensure the bank is insured by Federal Deposit Insurance Corp (FDIC) 

The Risks

When you have a question or concern about your bank account, taking a quick trip to your branch to have a sit-down conversation with a banker can feel like the most reassuring way to manage your money. This service is not available with online-only banks but there are advantages: Most bricks-and mortar banks have limited opening times and are frequently closed on the weekend. Meanwhile online-only banks increasingly offer 24-hour advisors through their digital apps, but for those who are less tech savvy or less eager to wait on hold, this could make or break your banking experience.


Given the digital nature of online banking, many online only banks don’t offer checking accounts, and have limited cash deposit options. You know better than anyone what you need from your bank. Make a list of the services you use most and make sure the online bank of your choice can keep up.

Should You Go for It?

Change is hard no matter what, and it’s even harder when your hard-earned money is in play. Luckily, there’s no problem with testing the waters before going totally digital. Open an online bank account while keeping your traditional bank account open and see how it goes. Take advantage of high interest rates while having in-person access to a banker. It’s a win-win.

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