The 4 advantages & disadvantages of online banking (2024)

Considering signing up for online banking for the first time? If you’re nervous about moving away from phone and in-branch banking, read on.

We’ve put together a rundown of the main pros and cons of online banking. This should help you decide if it’s the right choice for you.

But remember that when it comes to managing your money, a bank isn’t the only option. Open a Wise Account online, and you can spend, send and receive in 40+ currencies all in one place.

What are the advantages of online banking?

So, what are the advantages of online banking over traditional banking? Here are just a few of the main benefits:

1: Your money is available anywhere

With online banking, all you need is an internet connection and you can check your balance or make a payment. You’re not tied down to one geographical location, like with using a local bank branch.

2: Money transfers are easy

You don’t need to recite account details over the phone or fill in paper forms to send money online. You can set up a new payment in moments, and save the details for future use.

3: Opening a new account is a breeze

Many banks let you open an account online in just a few minutes. This beats queuing at the bank, filling in forms and handing over documents. You can get a new account up and running in just a few clicks, and get on with the rest of your day.

4: Other banking services are so much quicker

With online banking, there’s no need to take time out of your day to visit an ATM to check your balance. Similarly, you don’t need to visit a branch to pay bills or wait for a statement to arrive in the mail. You can do it all in minutes, just by logging in on your laptop or mobile device.

The 4 advantages & disadvantages of online banking (2)

Looking for an alternative to a bank? Try Wise

If you want the convenience of managing your money online, and a cheaper way to send money internationally, check out Wise.

While Wise is not a bank but a Money Service Business (MSB), it’s a great alternative to cover many of your banking needs.

With the Wise Account, you’ll get all these brilliant benefits:

  • Bank details in 10 currencies
  • The option to hold, send, spend and convert 40+ currencies at once
  • Send money overseas with low and transparent fees,
  • Order a Wise card for a one time fee of just $9 - for use in 174 countries
  • Mid-market exchange rates on all transactions.

Get a Wise Account today

It’s quick, easy and free to open a Wise Account online. You can set up a transfer in just a few clicks, or use the handy Wise app to manage your money on the move.

Please see Terms of Use for your region or visit : Only Pay for What You Use for the most up-to-date pricing and fee information.

The disadvantages of online banking

We’ve looked at the advantages of online and mobile banking, but now it’s time to look at the flip side.

Here’s a rundown of potential disadvantages to consider before opening an online bank account:

1: Tech sometimes may fail

If you don’t have internet access or the bank’s website, you could be left without access to your account. This can happen when you’re traveling, have a power outage, or simply because of unexpected technology disruptions.

2: Getting in-person customer support can be difficult

There’s nothing like speaking to someone face-to-face to get help with banking, especially if the issue is complicated. With online banking, support is often provided online - through live chat or email.

Some online banks do offer phone support, but as they don’t have branches, you won’t be able to pop in and seek help in person.

3: Security may be a concern

Internet fraud is an ever-present issue, and could put some people off using online banking.

However, it’s worth bearing in mind that banks have sophisticated security measures in place. There are also lots of things you can do to protect yourself, including setting strong passwords and never sharing them with anyone.

4: You can’t deposit cash

Unless the bank permits deposits at an ATM, there isn’t any option to deposit cash in your account using online banking.

Bottom line

Ultimately, it’s completely up to you whether you feel comfortable using online banking. And after reading this guide, you should have a better idea of its pros and cons.

More and more banks are moving towards an online banking model, so it could be worth giving it a try. For many people, the benefits outweigh the drawbacks.

And of course, there are other online alternatives to banks, such as Wise. It offers a convenient, low-cost way to manage your money internationally, so it’s ideal for globetrotters, expats and business owners with dealings overseas.

Learn more about Wise

FAQs

What are 7 major advantages of online banking?

Online banking offers the following benefits:

  1. Access your money anywhere
  2. Convenience - all your banking services are all in one place
  3. Lower fees
  4. Higher interest rates (potentially)
  5. Faster money transfers
  6. No paperwork, queuing or being put on hold on the phone
  7. It’s easy to open personal and even business bank accounts online.

What are the advantages and a disadvantage of an online bank?

Online banks make it quick, easy and convenient to manage your money wherever you are in the world. All you need is a device and an internet connection.

But they do have their downsides, including lack of in-person customer service, the option to deposit cash and potential security risks.

What are 3 advantages of banking?

Using a bank can have many benefits, including:

  1. Protecting your money
  2. Easily manage your finances, including sending and receiving money
  3. Convenience.

Are there disadvantages of online banking?

Online banking does have some potential disadvantages. These include a lack of face-to-face customer support, cash deposit services and a risk of technology failures or security breaches.

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

The 4 advantages & disadvantages of online banking (2024)

FAQs

What are the 4 advantages pros of online banking? ›

The 5 benefits of online banking
  • Check balances on accounts and view records of your transactions.
  • Pay bills automatically each month with easy-to-set-up auto payment.
  • Transfer funds between accounts.
  • Download or print statements for your tax or personal records.
  • Access your account 24/7.
Feb 14, 2024

What are the advantages and disadvantages of internet banking? ›

Features include checking account statements, transferring funds, and paying bills. Advantages include availability, convenience, and time efficiency, while disadvantages include the need for internet connection, transaction security issues, and complexity for beginners.

What is the major disadvantage of online banking? ›

Cons of online banks

Customer service can be virtual and impersonal. You are more likely to incur ATM fees if the online bank has no ATM network or is part of a small network. You can't deposit cash unless the bank is linked to ATMs that accept cash. The number of products tends to be more limited at online banks.

What are the 4 benefits of banking? ›

Opening a bank account can be one of the most important steps you take toward reaching your financial goals. Why? Because putting your money in an FDIC-insured bank account can offer you financial safety, easy access to your funds, savings from check-cashing fees, and overall financial peace of mind.

What are the advantages and disadvantages of banking apps? ›

It makes it easy and convenient to stay on top of your finances, since you can pay bills, send payments, or make deposits all from your mobile device. There are some downsides, however, as mobile banking apps may experience technical issues from time to time and they don't all feature the same functionality.

What are the pros and cons of doing online and or mobile banking? ›

Pros of Internet Banks
  • Better Rates, Lower Fees.
  • Better Online Experiences.
  • No Personal Relationships.
  • Less Flexibility With Transactions.
  • The Absence of Their Own ATMs.
  • More Limited Services.

What is a risk of online banking? ›

The biggest risk of online banking is that someone could access your account by getting their hands on your username and password, hacking your account, exposing you to a virus, or using your debit or credit card to make a purchase. These risks exist for online and traditional banks offering online banking services.

What are the problems with online banking? ›

It is vital to understand the risks and security concerns that come with internet banking, though. Significant security issues include identity theft, fraud, use of weak passwords, phishing attacks, unsecure networks and devices, ignorance, insider threats, and system flaws.

What are the disadvantages of the internet? ›

Disadvantages of Using Internet
  • Spam and advertising. ...
  • p*rnographic and violent images. ...
  • Buying things that you don't need. ...
  • Not a safe place for children. ...
  • DDoS Attacks. ...
  • Botnets. ...
  • Identity Theft. ...
  • Cyberstalking.

What are two reasons to not use online banking? ›

  • Customer service lacks personal touch.
  • Not an option for those lacking access to the internet.
  • ATM options may be limited.
  • Greater due diligence required to vet the bank.
Dec 31, 2021

What are the disadvantages of banking apps? ›

If hackers gain access to your banking information, this puts you at risk of not only financial fraud — but also identity theft. Scammers use stolen personal data on the Dark Web to: Take out loans in your name. Open new credit cards and ruin your credit score.

What are the disadvantages of not using a bank? ›

Being unbanked means things like cashing checks and paying bills are costly and time-consuming. Those who are unbanked often must rely on check cashing services to cash paychecks because they don't have direct deposit. They also have to pay bills using money orders, which adds time and expense to the process.

Can the government see how much money is in your bank account? ›

The Short Answer: Yes. Share: The IRS probably already knows about many of your financial accounts, and the IRS can get information on how much is there. But, in reality, the IRS rarely digs deeper into your bank and financial accounts unless you're being audited or the IRS is collecting back taxes from you.

What are the 4 C's of banking? ›

Standards may differ from lender to lender, but there are four core components — the four C's — that lenders will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.

Is it better to save money in a bank or at home? ›

The safest way to do this is to put your savings in a bank account. After all, in your account, your money is free from most risks and can slowly accumulate over time.

What are the 5 benefits of online banking? ›

You'll be able to check your balance quickly, view your transactions and know exactly what's going out and when, as well as look at historical payments to make sure they're cleared. Additionally, it's easier to check for any unauthorised purchases, so you'll be able to flag these as soon as you notice them.

What are 2 benefits to using online mobile banking? ›

Benefits of Online Banking
  • Ease of Access. When you need to manage your bank accounts, move money, make a deposit, etc., you no longer need to walk into a brick-and-mortar bank or speak with a representative over the phone. ...
  • Security. ...
  • Helpful Features. ...
  • Credit Monitoring. ...
  • Greater Control.
Feb 13, 2024

What are the benefits of virtual banking? ›

Besides giving more convenience for customers, Virtual Account also provides various benefits for business, which include the following:
  • Helping Financial Recording. ...
  • Serving Various Types of Transactions. ...
  • Making Payments at Any Time. ...
  • Managing Payments Easily. ...
  • Ensuring Customer Security.

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