Standard Bank Vs. Internet Bank
- An Internet bank can provide better returns on investments. These include savings accounts as well as certificates of deposit and other securities. Since the Internet bank does not need to rent or build physical offices, it can pay out greater amounts of money on the deposits that it holds. This is usually an advantage of less than a percent, although it can be a significant gain with large savings deposits.
- Standard banks allow withdrawals when they are physically present. Most banks will charge a user fee of several dollars when someone takes money from his automated teller machine without using a card that links to an account at his bank. Major banks like Bank of America and Chase have ATMs everywhere, as well as physical offices, so a cardholder will not need to pay extra transaction fees to withdraw money. A bank that only has an Internet presence does not have ATMs. Some Internet banks, such as First Internet Bank, offer a rebate on ATM fees because of this issue.
- Withdrawal policies differ between standard banks and Internet banks. ATMs and debit cards typically have a withdrawal limit, which restricts cash withdrawals to a few hundred dollars a day. If a bank customer needs to take out more cash she can go inside the bank office and receive greater sums of money. This is not possible with Internet banks, so spending large amounts may be difficult.
- Deposit policies are also different with Internet banks and standard banks. A standard bank can clear a check so that a customer can use it very quickly. It may be a day or less after a deposit in the bank's own ATM, and the check can clear instantly when the customer deposits it inside the bank. Online banks may take a longer period of time to verify that a check is accurate, and if the customer receives a physical check, he may need to mail it to the online bank's office to deposit the check.
- Security also varies between the Internet banks and standard banks. Standard banks can ensure accuracy of a customer's identity by physically scanning the ATM card and driver's license of the bank customer. Most home computers don't have these scanners, so the online bank will use other methods to verify identity, including a user name and password, and they will typically encrypt communications so it is difficult for information to be read if a hacker does intercept it.