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Thinking About Making The Switch To All Online Banking. Can You Talk Me Out Of It?

Barrel-rider
Barrel-rider   |     |   23 posts since 2014

I recently consolidated my emergency savings into an Ally savings account. I'm still using a B&M bank (Wells Fargo) for my checking. I'm thinking about moving my checking over to Ally as well.  The decision to do so would not be about better interest rates but about convenience. I like having my primary accounts at one bank. Also, I only use the online features of my WF account anyways, so I'm basically all-online already. Before you suggest it, I use my credit card to earn cash rewards, and I'm not interested in opening up a rewards checking account like at Consumers Credit Union where I would need to jump through hoops. The only downside I can see is that if I moved all my primary deposit accounts to Ally, I wouldn't have an easy way of depositing cash, but this is not a big deal at all to me. I'm trying to remember if I have ever needed to deposit cash in the last 10 years, and I don't think I have. I also don't want to keep my Wells Fargo account open as a fallback because there's a service charge if I don't keep an average of $1,500 in it, I believe.  So, what do you think? Am I a fool? Is there a reason I'm not thinking of that makes it absolutely essential to have at least one account at a traditional B&M bank or credit union?



Answers
Shorebreak
Shorebreak   |     |   4,078 posts since 2010
Having a local source for funds is a security issue for me so I keep my primary checking account at a locally owned bank. It is fee-free with a balance of $500. Thus I have access to a safe deposit box and have automated monthly payments deducted from the account for utilities, etc. Also they will cash my saved coins for free and provide notary service at no cost. I like having a local account for when I sell something for cash there is a place I can deposit the funds. Meanwhile I maintain my emergency fund in an Ally Bank money market account and also have a savings account there for travel expenses and large purchases. External transfers have been problem-free when initiated through Ally.  If you don't have the need for a safe deposit box or to make cash deposits perhaps you could maintain just an online checking account. But remember, if the internet is disrupted you may be on the phone trying to access your account.
theshield44
theshield44   |     |   5 posts since 2015
I'm with you.  I have a local bank I keep a few hundred in too and have a deposit box, so I'm keeping the account for now.  As long as I keep $100 in checking, & $25 in savings, I'm fee-free.  I do make the occasional cash deposit, but the I pass a branch on my way to work, so no problem there.  But I do have two emergency funds, (Barclays), which have worked out well.

I would mention that finding an online savings account was no problem for me, I haven't been impressed with the online checking offerings.
Ally6770
Ally6770   |     |   1,967 posts since 2010
I am fortunate to have a brick and mortar credit union in town that offers a 3% reward checking account, with a good cash back credit card that I use for everything except for gas where I get a 5% cash back instead of their 3%. I don't ever remember paying a fee for transferring money to another institution, but I only did that when I was opening a CD. I charge everything and the credit union will debit my account during the first week or middle week of the month and pay it in full for me. I made the choice when I want it paid. I am not sure if they do international transactions but I have never done that. With everything that I have done with this credit union I have never paid a fee for anything in the many years I have belonged to this credit union. I never pay for checks. I only use checks for gifts and property taxes. 
paoli2
paoli2   |     |   2,227 posts since 2011
I keep a checking account open at a traditional local bank for personal reasons in case I decide to close my on-line banking.  I found out something yesterday that many on here probably know which was new to me about on-line banking.  I found I need to put more money in my local bank's checking for additional check payments. I put the info for the bank on the site for my on-line bank as an "external" bank to transfer funds to.  When I tried to do the transfer I found out it costs $3.00 for every transfer to an external bank.  Well I canceled the online transfer and this morning went to the online bank's local branch and withdrew the money (without a fee) and deposited it into the other bank's checking.  I called the online bank about the fee and was told "all" banks have this fee if you try to transfer money from their accounts to an external different account.  I will be sure to watch out for any other fees involved with my new online accounts.  The Billpay is useful but if I decided to cancel my online completely, I could always go back to my autopays as before.

My outside bank also charges a service charge if you don't keep $1500.00 in the checking. This is why, I, too, am in a quandry about whether or not to keep it open longer.  My reason for keeping my traditional bank account open is just to have a "fall back" account if I run into reasons later that makes me want to close out the on-line banking due to unexpected fees.
Barrel-rider
Barrel-rider   |     |   23 posts since 2014
I don't believe the fee you mentioned is going to be applied at all banks. You said you went to the local branch of the online bank, so that doesn't sound like a true online bank- just an online banking feature. I just double-checked, and Ally doesn't charge for transfers from or to external accounts (https://www.ally.com/help/bank/transfers.html). Perhaps the fee you mentioned is one of the many fees that most true online banks do not charge. The fall back reason makes sense if you're not totally sold on online banking. Perhaps I will test the waters with an online checking account and see how it goes before I decide to make a permanent switch. 
geracea
geracea   |     |   1 posts since 2015
I'm in the same situation - that of having local checking accounts at a B&M bank that charges for external transfers as well as Ally accounts.  So it's possible to incur charges if I 'push' funds from local to Ally.  I handle external transfers by 'pulling' funds(external transfer while logged on to Ally's site) rather than transferring by pushing funds(while logged on to my local bank's site) and avoid the fees.
Shorebreak
Shorebreak   |     |   4,078 posts since 2010
I called the online bank about the fee and was told "all" banks have this fee if you try to transfer money from their accounts to an external different account.
Never have paid such a fee for an external transfer and I have had quite a few different online accounts.
paoli2
paoli2   |     |   2,227 posts since 2011
Thanks SB for the input about the external transfer fee.  I'm glad to hear it is that way with all of them.  BTW, your earlier post reminded me of the main reason I keep my local checking open.  If the internet is interrupted, I, too, want a local branch I can get to for my deposits and/or withdrawals.  What I like about my online billpay and banking bank is that it has a local branch I can use like I did today when I did not want to pay their $3.00 fee to get my withdrawal. 
peacejogger
peacejogger   |     |   18 posts since 2011
Ditto for me Shore.  I have accounts with 5 online banks and have never paid any fees for internal or external transfers.  I would never have opened an account with an online bank that charged such a fee.
paoli2
paoli2   |     |   2,227 posts since 2011
Peacej.:  This is what is so great about DA.  I can find people who can tell me their experiences so I can know if what the bank is telling me is really true.  I am new to on-line banking so I am learning as I go along the way.  Thanks for verifying what Shore posted.  It's taught me a lot about the new bank I am with so I will be careful with how much business I give them.  Much appreciation.
theshield44
theshield44   |     |   5 posts since 2015
I never have paid fees with online banks, either.  Peacejogger, I love online banks, but 5 accounts sounds like a lot to me.
peacejogger
peacejogger   |     |   18 posts since 2011
Well Shield, two of them are older accounts that no longer pay top interest, so I only keep a bit in them to keep them active in case they make it back to the top tier.  Of the other three, one is my hub for moving money around to and from the others depending on rate fluctuation.  I have no desire for my money to help pay for unnecessary brick and mortar buildings.  I suspect brick and mortar banks are on their way to extinction.
klink
klink   |     |   157 posts since 2012
Well I can tell you that Wells Fargo charges a fee to transfer from a traditional checking account to another institution. I had previously established a link between WF to Alliance to eventually pull my CD funds on maturity. Decided to test it to see how long the transfer (ACH) would take. Decided to go small so I went with $0.50 on a WF outgoing. No can do, must be at least $10.00. But during the process I saw the small print saying that fees may apply to transfer funds. Well I called WF and was advised that there was no fee to transfer in (but the outgoing institution may apply fees) but the outgoing from WF was $3.00 per transfer. Anyway I'm back to the traditional wait for the CD funds in a check by mail. But on topic, I use a WF checking as my hub and pull my retirement amount ea. mo. in cash to deposit to a better interest paying account at my CU. Then when bills come due I pill it from the CU and re-deposit to WF and use their bill pay system. I can do this easy as both are within walking distance from me. Advantage I see is WF bill pay takes the least amount of time which allows me to hold my funds longer in the CU account which pays the most in my area (1%). Works for me and I have checked my area thoroughly looking for a faster way to do business.
peacejogger
peacejogger   |     |   18 posts since 2011
Klink, I think you will find that many brick-and-mortar banks charge many fees that online banks do not.  It is not uncommon at all for brick-and-mortar banks to charge fees for transfers.  If you must have an account at one, initiate the transfer from an online bank account and bypass the fees.