Advantages to brick-and-mortar vs. online banking?

May 1, 2009 3:04 AM

I found an online-only bank that's better than my current one. Is being able to walk into a brick-and-mortar bank enough reason to keep my current accounts open?

In 2007 I opened a checking and savings account at (what was formerly known as) Washington Mutual, attracted by high interest rates and free checking benefits. But after WaMu tanked and was bought out and interest rates went down the toilet along with the rest of the economy, I started looking elsewhere. I've since discovered the interest bearing checking and savings accounts offered by Schwab One, which has twice the interest rate of WaMu/JP Morgan/Chase (which isn't saying much but it's better than nothing), as well as several other benefits.

I already do most of my banking online anyway, and right now the only reason I need to physically walk into a bank is to deposit paper checks. Schwab gives you free prepaid envelopes and deposit slips to take care of that. So is there any reason to keep my WaMu accounts open?

posted by xiaoyi to work & money (23 comments total)

Why not. You can set up bank to bank transfers to get money in & out of Schwab (that's what I do with HSBC Online). I use my Wells Fargo account for daily stuff and the online account for medium-term savings.
posted by mrt at 3:09 AM on May 1

I'm in the same boat of missing WaMu. The new owner is enough reason to jump ship, for me. An online-only bank will suit me fine and I'm thinking of going to ING; though some people might like to do the actual visit-my-bank thing I don't see any need.
posted by anadem at 3:28 AM on May 1

i have an online only bank as my main bank. For the most part and for many years I did not need a b&m bank (automatic direct deposit of my paycheck, the rest done with credit cards or checks or atm cards; the occasional deposit that wasnt my paycheck I dealt with either with the free mailers they provided or via atm deposit).

But after five years or so when I had a part time job that paid cash and I wanted to deposit cash into my account more regularly, I decided I wasnt as confident about the atm/mailer deposits for weekly deposits (ie, much larger frequency of deposits than before) and so while I kept my online bank (the service is great and the rates are great and I'm happy with them) but additionally opened an account with a local bank (one of those accounts where you keep X amount of dollars and they dont charge you any fees) so now i have two accounts but the online one is still my main one. Periodically i do an electronic transfer of funds from the b&m one to the online one, all of which is done online and thru the their two websites.

So long story short I think these days, unless you have a specific need (like my (probably irrational) desire not to always use the mailers for deposits), you can in fact do nearly everything you need with an online bank, everything is done online now anyway. If you ever need b&m, open that account when the need comes up, on an 'as-needed' basis.
posted by jak68 at 4:05 AM on May 1

I bank mostly with E*Trade at this point, but I keep a brick & mortar acct at what will soon be Wells Fargo - there are always things you don't want to put in the mail, like cash, and I hate paying ATM fees so much that it makes sense. It's just a back up.
posted by Medieval Maven at 4:16 AM on May 1

When I lost my credit card/ATM card, it was useful to go to the brick-and-mortar bank, where I withdrew $1000 and got two $500 Visa Gift Cards to tide me over.

(Note that the first thing I did with the Gift Cards was try to make a donation over the internet; it was only when the card was declined that I learned that Gift Cards have to be registered with Visa to be used other than in person. Fortunately, I got back to the bank just before it closed.)
posted by orthogonality at 4:35 AM on May 1

I was actually just asking myself the same question recently. I do the majority of my banking online with a credit union that only has one physical location (nowhere near me). They've been great and have wonderful customer service. However, I'm keeping a minimum balance in my brick and mortar bank account (with many branches in my area) just so I could go in there in person if I need something (e.g. dealing with cash, as others have mentioned). It's not hurting anything to have a little bit of money sitting there, and I'd rather have the option.
posted by LolaGeek at 5:15 AM on May 1

Dealing with cash can be a big hassle if you are internet only.
posted by BadMiker at 5:28 AM on May 1

I have an online-only account and a local bank account. Yesterday I bought a house and needed a cashier's check. I don't know how that would have worked out with the online-only bank...put in a request and wait a week? Take out money bit by bit from an atm and get a money order?

I've always found it helpful to have an account nearby, even if it isn't my primary account.
posted by another zebra at 5:32 AM on May 1

You know you can have more then one bank account, right? Sign up for the high interest savings account at the bank you want and move most of your money there, but you can keep some cash in your current account and you won't have to worry about getting new checks, setting up new online bills, etc.
posted by delmoi at 5:35 AM on May 1

Our only bank accounts are with online only banks. No problems so far.
posted by gaspode at 5:35 AM on May 1

My main bank is two states away (a credit union; I highly recommend looking into credit unions, because they really are more customer (and ethically) focused).

I always think I'll never need a local bank, but we do use our local bank account, mainly for things we never thought we'd need:

- notarizing medical power of attorney documents, car deeds of sale, and maybe something else I'm forgetting;

- a small safety deposit box in which we keep copies (or originals) of birth certificates & insurance policies;

- backup hard drives for each of our computers (we switch these out every couple of weeks with other backup hard drives - it's great to know that our data is _really_ backed up);

- cashier's checks / money orders for when we buy something off Craigslist or want to make an anonymous donation (these checks don't have our name or address on them);

- Currency exchange - a few Euros and British Pound notes for a recent trip we took

Since our joint account only has a tiny bit of money in it, I'd feel guilty using all these services. Even though some of these services are paid, I doubt this is enough business to keep the bank open. However, I do also have my business account at this bank.

Because it's a smaller, more local bank, having a relationship with them actually does help when I need something unusual. If I needed a merchant account (for accepting credit cards), or something of that nature, I know I could go there and someone would patiently explain things to me _in a way that was tailored to my situation_ - which entails less time sifting through documents on the web and/or waiting on hold and/or navigating through menus. Priceless.
posted by amtho at 5:53 AM on May 1 [1 favorite has favorites]

The backup hard drives are in the safety deposit box (that was originally all one point, but I split it badly, sorry).
posted by amtho at 5:54 AM on May 1

My main bank is on the other side of the country. It's a credit union with terrific customer service [including IM access to bank workers] and good rates. I also have a local account that I keep a small amount of money in for these reasons

- notary services
- having local checks is good for paying rent and contractors who prefer to get money quickly
- they will take my jars of change and deposit them for free and I can come back later and get my jars
- I know the people that work there and they know me and I think this is useful for community building in my community

I think a combo solution might work best for you.
posted by jessamyn at 6:28 AM on May 1

I will continue to keep a B&M bank for the following:

dealing with cash
cashing checks quickly (not depositing)
notary services
currency exchange
coin exchange

I keep most of my funds in an online bank with higher interest rates, but I do need to see a physical person once in a while. My B&M account has no fees whatsoever and no minimum balance required, and bonus, their ATMs are all over the place where I live.
posted by peanut_mcgillicuty at 6:30 AM on May 1

I have a bank account with Schwab, too (as well as an account at a B&M bank). A couple of other data points are that 1) you can walk into any Schwab investment branch and deal with them on the banking stuff (it's NOT the same as walking into a real bank, but you can get in-person customer service of a sort) and 2) depending on the account, Schwab will refund your ATM fees, regardless of the ATM owner, the location or the amount. This is a great savings--could easily be a couple hundred bucks a year. Plus, if you're not worrying about ATM fees, you may find yourself taking out just $20, which is highly un-economic if you're having to pay a $2 or $3 fee. I found that when I was economizing by taking out $100 at a time, I'd spend the money that I had in my pocket and have no idea where it went.
posted by Admiral Haddock at 7:09 AM on May 1

The only reason I need a B&M bank is because I lose my debit card with alarming frequency. I need a storefront so there's somewhere I can go in, order a new card, and get a temporary card immediately. I use my debit card for 95% of all my purchases, and not having one would be a royal PITA.
posted by cgg at 8:01 AM on May 1

A local bank might be more involved with your community; grants, non-profits, kids programs and such. Of course it costs you something, but you may find value there.
posted by okbye at 8:23 AM on May 1

I'd say keep your Chase checking account just for the convenience. I have a similar situation. I am from California and have had Wells Fargo forever. I like them, I have my credit cards through them, my parents can transfer me money, etc. Except I'm in Louisiana where we have no WFB. So I have a Chase account just so I can deposit checks locally if necessary, get quarters for laundry, etc.
posted by radioamy at 8:42 AM on May 1

I've not had a bricks and mortar for over 10 years now. I do keep accounts at two separate online banks (what can I say, my parents grew up during the Depression), and that was handy when Netbank was shut down.

I use ING and Schwab now, and I like Schwab better. They provide more services. ING is best as a backup bank, which is what I originally used them for (that is to say, a place to store money I want to forget I have unless I really need it).

Schwab is also awesome about refunding ATM fees, even overseas. If you ever travel outside of the US, Schwab's ATM card is the one to have.

Originally, I had a credit union account and a Compubank (bought later by Netbank) account. When I found myself using the Compubank all the time, I dumped the credit union. You might try having both, and see how it goes.
posted by QIbHom at 9:05 AM on May 1 [1 favorite has favorites]

My (not US) online only back has the added benefit of being part of a group that includes several brick-and-mortar banks, so every agency of those banks can work as a physical agency for my bank too (for depositing cash or checks, having cashier's checks for buying the house I live in, that sort of thing. Now you can also deposit cash and checks with 'smart' ATMs). Some sort of similar arrangement might be the best option, and be sure to find a bank with a good online/on the phone assistance. Anyway, I've been fine since 2001 with online only banks and not looking back.
posted by _dario at 9:10 AM on May 1

If you can set it up such that it doesn't cost you anything to keep it open... then it's probably worth keeping it open.

I was online-only for a number of years, until I bought a car, and needed a cashier's check.

I was able to open an account at a B&M, wire money into it, and get the check cut within 72 hours... but it was a pain in the neck. Fortunately the seller was understanding, and she didn't sell the car to someone else while I got my act together.

I've kept that account ever since, leaving a minimum balance in it to keep it open and fee-free. I don't know when I'll need it again(*), but when I do, I'll be glad to have kept it open.

(* It's likely to be soon... I'm thinking about selling my car and buying a different one)
posted by toxic at 10:41 AM on May 1

I have USAA, and a local credit union account. USAA is awesome, and it's worth checking to see if you're eligible.

USAA lets you deposit and scan in checks from home. That transaction is just as fast as using an ATM, no waiting on the mail. They're great about ATM fees, and rewards on debit/checking accounts. Their customer service on phone is better than I've gotten face to face. (and not to be xenophobic or anything, but all their phone people are Americans. I know that matters to some people.)

My local credit union is mostly used just infrequently for cash. It's also part of a national credit union federation, so I have pretty good ATM and teller access around the country. Any town with a college has several.
posted by fontophilic at 11:03 AM on May 1

I haven't had a brick-and-mortar bank since 2002. I don't miss it, except if I need to deposit coins.
posted by blue_beetle at 12:00 PM on May 1