Should You Choose a Bank with Branches or Online?

When opening a new bank account, one key decision is whether you want a traditional, branch-based bank or an online-only option. There are compelling benefits to both models. Here’s an in-depth look at the factors to consider when deciding between brick-and-mortar and digital banking.

Benefits of Choosing a Bank with Physical Branches

For decades, most people relied exclusively on local bank branches for their financial needs. And branches still offer certain advantages:

In-Person Service

Bank branches provide face-to-face customer service and advice. You can meet with specialists for loans, investments, accounts, and wealth management.

Local Accessibility

Branches allow convenient access to in-person services in your community. This is ideal if you prefer handling money transactions and discussions in person.

Robust Local ATM Networks

Large branch banks offer extensive ATM access so you can withdraw, deposit, or transfer money at thousands of locations without fees.

Safety Deposit Boxes

Many branches provide safe deposit boxes to securely store important documents, heirlooms, and valuables. This service is not available from online banks.

Cash Transactions

Doing cash deposits, withdrawals, and other transactions is easier from a local branch. Digital banks have limits on cash services.

Senior-Friendly Banking

For older customers less comfortable with digital banking, branches offer personalized service and simplicity.

New Account Opening

Those who want assistance opening accounts can visit branches for a seamless onboarding experience.

Benefits of Choosing an Online Bank

Online banks that operate without physical branches also have compelling advantages:

Higher Interest Rates

Online banks tend to offer higher interest rates on savings and CDs, given their lower overhead costs compared to maintaining branches.

Lower or No Fees

The lack of branch costs also allows the best online banks to reduce or eliminate maintenance fees, ATM fees, and overdraft charges.

Easy Account Opening

It’s simple to open a new account digitally in minutes from anywhere, without having to visit a branch.

Advanced Digital Experiences

Online banks invest heavily in user-friendly mobile apps, personal finance tools, data analytics, and money management features.

Accessibility for Travelers

With online banking, it doesn’t matter where you live or travel. You have 24/7 account access from anywhere there is an internet connection.

Seamless Money Movement

Moving money between accounts at the same bank or externally happens instantly. Transfers are simple to automate as well.

Key Factors to Consider in Your Choice

As you decide between sticking with traditional branch banking or trying a digital experience, here are some important factors to weigh:

Account Types Needed

Online banks may offer fewer specialty account options beyond the basics. Evaluate whether you need investment accounts, trusts, custom lending products, etc.

Account Access

Those who want to deposit cash or speak with tellers may still need branches. But if you rarely go in person, digital services will suffice.

Geographical Needs

If you travel domestically a lot, a national online bank ensures ATM access everywhere. But branches are better for community banking.

Technological Comfort

Online banks demand digital proficiency. If you prefer in-person, paper-based banking, branches are likely the better option.

Interest on Deposits

To maximize returns, choose an online bank. But for extensive local branch access, lower yields at a brick-and-mortar institution may be worth it.

Fees and Charges

Online banks drop fees substantially. If minimizing fees is a priority, lean towards digital.

Customer Service Preferences

Those who want to handle issues in person may prefer branch banks. But modern online banks often offer quick and high-quality customer service digitally.

Hybrid Option: Banks with Both Online and Branch Access

For those seeking the best of both worlds, many national banks now offer a hybrid of digital access and local branches. These provide services like:

National online banking with mobile apps
Thousands of no-fee, in-network ATMs
Local branches for in-person support
Higher interest rates on deposits than traditional banks
Lower fees than brick-and-mortar-only banks

Examples of these hybrid national banks include Capital One, Ally Bank, and Charles Schwab Bank. Credit unions like Alliant and PenFed also offer online national presence with branches in some regions. This gives you flexibility and convenience.

Recommendations for Different Banking Needs

Based on your individual needs, here are some recommendations on branch, online, or hybrid banks to consider:

For high interest and no fees: Online banks like CIT Bank, Marcus by Goldman Sachs, and Synchrony offer top rates and zero monthly fees.

For traveling: A hybrid like Capital One provides online access, fee-free ATMs, and some local branches for cash needs.

For in-person service: Look for a community bank like TD Bank or Fifth Third that offers extensive branches and personalized service.

For international: Choose online banks like Wise or HSBC for low-cost currency exchange, transfers abroad, and global access.

For the full suite of products: A national brand like Chase, Bank of America, or Wells Fargo supplies branches everywhere, robust digital tools, and advanced accounts.

For hassle-free: Online banks like CIBC, Discover, and Axos make account opening fast and feature user-friendly apps.

The Future of Bank Branch and Digital Experiences

Looking ahead, bank branches will remain important hubs for sales, advice, and complex services customers still want handled face-to-face. The future branch offers more technology like video tellers and self-service kiosks to enable omni-channel delivery.

At the same time, digital and mobile will become the primary ways most customers interact for everyday transactions. The best banks will merge localized branches with sophisticated digital experiences. This gives you the human touch when wanted and efficient digital convenience when needed. Compare all options in your area and choose the bank with the optimal blend for your lifestyle.