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Thinking about switching over to a virtual bank? Here's what you should know

Posted November 11, 2021 5:13 p.m. EST
Updated November 11, 2021 6:53 p.m. EST

— All online-banking has taken off in recent years. More and more people are signing up with online banking accounts having never stepped foot inside a bank.

Virtual banking can be an attractive option — fees and interest rates are low and its easier to earn interest on checking and savings accounts. Data from Consumer Affairs shows that 80% of people prefer resolving an issue online versus visiting a brick-and-mortar establishment.

But the main drawback to online banking is that there's no branch to visit if something goes wrong.

"Reaching an actual human at the company to help you may not be easy,” according to Octavio Blanco, a multimedia content creator with Consumer Reports.

Instead of visiting a bank, Blanco suggests reaching out to one of the online banking services online.

"Try to find the company’s main number online, and ask to speak to the office of the CEO. Explain your situation clearly and remember to be nice no matter how frustrated or angry you get,” Blanco said.

If that doesn't work, Blanco suggests reaching out to the company on social media. Instead of posting something publicly about the company, he says users should try and sort out any problems through private messaging.

“Give the company a chance to fix the problem before you make a scene publicly," Blanco said. "They may appreciate that and it may give you a quicker and more helpful response.”

The biggest virtual bank, CHIME, plans to offer 25/7 customer service for any issues or complaints.

Another option if you have an issue and can’t get a resolution is to file a complaint with the Consumer Financial Protection Bureau. It’s that federal agency’s job to make sure banks, lenders, and other financial companies treat you fairly.

But you shouldn't be concerned about security if you decide to put your money in an online banking system. Nerd Wallet says that online banks are just as safe as traditional banks, as long as the money is insured by the Federal Deposit Insurance Corp.

Another possible drawback to banking virtually is that it's not as easy to deposit cash. Some providers partner with third-party services to let retailers accept cash deposits, but there are likely fees involved.

If you want the best of both worlds, you could sign up for both a virtual bank and a bank with in-person services, according to Amber Murakami-Fester, former banking writer for Nerd Wallet.

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