money management

I’m finally getting an online bank

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As 2014 comes to an end and the New Year quickly approaches you may be setting a list of all the things you want to accomplish, places you want to go and new experiences you want to try in 2015.  I want to go to NYC and California next year and I want to save $5000.  Actually I would like to only save $2500 and have the wonderful benefit of compound interest do the rest – but that’s probably not possible.

This is a goal I set for myself each and every January and by this time in December do you know how much money I have saved?  $300.  Yep that’s it.  Between travelling, conferences and buying pretty things for my new apartment I managed to save absolutely nothing this year.  I know what you’re thinking – that’s pathetic.  Trust me I agree!

If money is there I’ll spend it

So next year I’m going to do it big a.k.a. I’m going to treat my money completely different than I did in 2014.  One way I’m going to do this is enrol with an online bank.  I currently bank with TD Bank and I absolutely LOVE them, but with a chequing and savings account attached to my debit card – Debit Visa no less – the temptation to spend is always there.  Gosh how I love the Debit Visa feature.

I’ve decided in the next couple of weeks I’m going to open an account with an online bank and start saving money in a place where I can’t touch it.  What better place to do that than with an online bank account that has no affiliation with my everyday expenses and can only be accessed within 48 hours.

Making a change in my money habits

I’ve never had an online bank before because I thought it was really inconvenient to transfer money between different institutions when I could just do it all at the same bank – but now I see the benefit.  Now that I’m 34 years old I’ve decided to get an online bank and get serious with my money.

In true Libra fashion I of course couldn’t decide if it was a good idea to keep my savings in a completely different institution or if I should just act like a responsible adult and stop spending money.  So I decided to turn to my friend Andrew from Money Crashers.  I picked his brain about online banks and here’s how the conversation went:

ME: What’s the main advantage of having accounts with an online bank?

ANDREW:  “(You) can save time over having to make trips to a traditional bank, there’s easier access to your accounts, and you might be able to find better interest rates as well.”

ME: Are there any downsides to using an online bank as opposed to a traditional bank?

ANDREW: You won’t have any face-to-face interactions with staff members – that’s important to a lot of folks. And if you are paid with traditional checks or in cash, that can make using an online bank quite difficult.

ME:  Why do you think people hesitate when it comes to online banking and using virtual banks?

ANDREW: I think some people just don’t trust the Internet, or aren’t comfortable with trusting their money or sensitive information to a website rather than an actual business – they might be concerned with security breaches. Others simply prefer the peace of mind of depositing their paycheck and managing their money through a traditional bank.

Do you have an online bank? Where should I open my account?

Photo from Flickr

About the author

TK

TK is a Certified Financial Planner with over 15 years of experience in the banking industry. She started blogging in 2009 after the market crash. TK enjoys helping people plan their retirement, pay off debt, invest wisely, live on a budget and enjoy happy financial lives. You can see what she's up to on Twitter @TahnyaKristina.

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