Online-only banks
Some online-only banks have also sprung up -- for example, ETrade, which began as an online brokerage firm, but recently expanded its offerings to function more as a traditional bank. For people with little interest in ever talking face to face with a teller, these online-only banks tend to be cheaper -- monthly fees are lower and minimum required balances tend to be lower -- but in some cases prove to be quite expensive.
Without a branch network to use, customers of such banks often have to pay hefty ATM fees and are typically obliged to deposit money into their accounts by sending it through the mail.
These Internet-based banks sometimes offer a certain number of free ATM transactions each month to take away some of the sting, and some have even begun setting up their own ATM networks to accept cash deposits. (Many accept only checks or money orders, deposited by mail.) But most analysts contend that the customers suited to online-only banking are those who receive money by direct deposit and rarely write checks. And now that traditional banks are offering online banking, online-only banks are being squeezed, with some going out of business or being absorbed by rivals.
For those who have gotten out of the habit of using a checkbook and balancing it with pen and pocket calculator, banking may be more carefree, but it is not without its rude awakenings.
"I should probably know better, but every time I go to the ATM machine at the beginning of the month and read my balance on the slip, it surprises me," said Josh Wolfe, a nanotechnology expert and co-founder of Lux Capital, a New York venture capital firm, who does most of his banking online with Citibank. "If I don't write the check myself, I don't always remember it's gone out anyway."
RSS