Retail Banking, Online Banking and Credit Card Banking – Oh My!

Online banking

If you are not aware from my prior postings, I am a Boomer who has recently become an Empty-nester. I have been sharing with you my journey from becoming an Empty-nester by strongly suggesting my millennial sons begin their own life journey. I have downsized my home, upgraded and adjusted our insurance coverage, and now it is time to tackle the banking industry.

It was fairly shocking to me to find that my bank – one of the top three banks in the country, which I have banked with for nearly 20 years, did not have a presence in South Carolina. I have begun my quest to find a new bank in my local area because for me as a Baby Boomer I need to be able to see and feel my bank. Unlike my millennial sons who would not even think of stepping foot into a banking institution when they have their smartphones.

Nearly two-thirds — 62 percent — of respondents to a recent Bank of America survey say they prefer to use mobile or online banking the most over other banking methods, up from 51 percent in 2015. The third annual survey showed that consumers’ dependence on mobile to meet their banking needs is steadily increasing, particularly among the millennial generation (those aged 18-35).

According to an annual survey by the Federal Reserve, 43% of adults used their phones for financial activities last year, an increase from 39% found in the Fed’s 2014 survey. While mobile is still behind online banking (65%) and ATMs (62%) as “the most important way” customers interact with their financial institution, it did rank ahead of using branch tellers for third place.

Don’t get me wrong, I love banking on my phone, tablet and pc but when I have a perceived issue I need to pick up the phone and speak to someone or go in and sit down and chat.

Like any savvy person, I began my search online using FindABetterBank.com for a new and improved retail bank. I put in my must haves such as mobile banking, no fees, plethora of ATMs, reward programs, etc. Then “voila” it generated 3 possible candidates. The problem with these three banks was that I had barely heard of them and after further research I was only really interested in maybe one.

So back to the drawing board, I began researching banks that I thought were better suited for me. However, these banks did not provide most of the things on my wish list without having to maintain large balances. Where do I go from here? There were online banks that gave me everything I desired, online and mobile banking, low fees and high interest bearing accounts. Another is offering 1.00%; however, online banks have a limited network of ATM’s. Also, since they operate on the internet they have yet to figure out how to digitize cash. You cannot deposit cash – Ever! This is not a problem for retail banks that own their own ATM’s and can accept cash at every branch.

Another option was credit card banks – this is my term for these new banking options offered by Non-Bank institutions.

In the recent past, most American banking customers found that their financial institution wasn’t offering any great incentives for stowing away hard-earned cash in their vaults. This is where opportunists like American Express (NYSE:AXP) and Discover Financial Services (NYSE:DFS) stepped in. By offering higher savings rates, both companies grew their customer deposits business, which in turn boosted their capital and lending abilities. (The Motley Fool)

Each company is offering high interest savings accounts but one also offers a checking account option. They both are also limited to ATM’s and you cannot deposit cash, but with current interest rates at 0.85% APY and $100 enrollment bonus to boot it’s not easy to just pass up. The good news is that I already have credit card accounts with both of these financial institutions so my trust level is super high.

Both of these options were looking pretty good but who could I visit and talk to when I need to speak to a live person? Dilemma, dilemma! As long as they could guarantee no fees on their ATM shared system, online banking, bill paying and the transfer features I have become accustom to having I guess I am good. Besides you can get a live person on the phone just no face to face time.

But since, I am still not 100% sure I am going to stick with my current bank but at least try the savings accounts with the high yields. Since having access to ATM’s is not important when one should be saving and not spending.

Wish me luck!

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