VOL. 127 | NO. 12 | Thursday, January 19, 2012
Rays of Wisdom 
Dana and Ray Brandon
Local Branches Or Online Banks?
By Ray and Dana Brandon
Ray’s Take Currently the average interest rate for banks in America is 0.18 percent. That’s not a very compelling number. However, many online banks are paying substantially higher interest rates – as much as 1 percent.
Online banking is becoming more popular and has other advantages besides higher interest rates, but there are disadvantages as well. Online banking may or may not be right for you.
Though they give you 24/7 online access to your accounts, getting money into or out of your online bank can be problematic. Of course, direct deposit is available and some online banks allow you to scan a check for electronic deposit. Some online banks also give you free access to more ATMs than brick-and-mortar banks offer. Others, however, may charge you a fee when you use an ATM. With this degree of difference between online banks, it’s important to learn just how accessible your money will be.
Perhaps the biggest drawback to online banking is the lack of face-to-face interaction, or sometimes even a human being to talk to over the phone. This can be a problem if you have questions or concerns.
Online banks have the same security measures as traditional banks’ online banking services, but that still doesn’t completely eliminate any chance of identity theft even though the chance may be slim. Like with any online financial transaction, you need to proceed with caution.
Ultimately, online banking is worth investigating, but you need to pay attention to the details and what each may be worth to you. Make sure you have easy access to your money, helpful customer service, higher interest and – ideally – lower fees.
There is no question that online banks offer some features that are appealing. But when the chips are down, there is no replacing a flesh-and-blood banker who knows you and can step up to a real plate for you, not just a virtual one.
Dana’s Take I place a high value on the interpersonal connections a real, brick-and-mortar bank or credit union offers. I want to be able to walk into a local branch and ask somebody a question face to face if I need to. I much prefer to work with a bank that’s right here in town.
Have you ever been on the phone on hold with a national bank? You go through an awful maze of button-pushing options and may never actually talk to a real human being. That’s not my idea of customer service.
Normally, I rarely go inside a bank, but I do use the automated tellers and the drive-thru windows. My kids like the lollipops! We also use the convenient bank branches inside grocery stores.
I do use the bank’s website to check balances on occasion. I appreciate having that 24/7 access to current information.
As long as the banks have brick and mortar in my neighborhood, I’ll wait on online banking.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at raybrandon@brandonplanning.com.