Changing banks is a decision not taken lightly. And this is even more the case when it comes to switching from a traditional physical bank to an online bank! If you plan to undertake an approach of this type, you should not leave anything to chance, and inform yourself as you should to be sure to make the best choice according to your needs and your projects. The key is to understand the main differences between a traditional bank and an online bank. Here is the key information you need to know in this context.
What is an online bank?
As its name indicates, an online bank is a dematerialized banking establishment, which exists on the Internet. Online banking, unlike traditional banking, does not have physical branches where it is possible to meet with an advisor or make check or cash deposits.
The management of an online bank account goes through the Internet and through a mobile application: everything is completely safe and if necessary, you can talk to an online advisor. The digital operation of online banking allows you to save money compared to traditional banks, which have to pay offices and many employees. This explains why online banks show reduced fees.
Therefore, the operation of an online bank is dematerialized, but nonetheless, it must be emphasized that these establishments must respect the Monetary and Financial Code, just like a traditional bank. Government authorities are watching you! So you can trust them with your money without fear.
Online banking: much lower costs than traditional banking
The mode of operation of an online bank implies that it does not have stores to pay, and generally, its number of advisors is much less than in a traditional bank. Also, it is not uncommon for online banks to offer some of their services through specialized partners, for example, for insurance policies and stock market investments, where traditional banks tend to manage everything themselves.
As a result, online banks have reduced operating costs and this affects account maintenance costs. It is very simple: in a large part of the dematerialized banks, they are non-existent. When there are, they rarely exceed a few euros a month.
However, online banks sometimes ask their customers to make a minimum deposit into their account each month: this is called the income requirement. For example, if this deposit condition is €1,000, you must deposit €1,000 into your online bank account every month to benefit from the free services. If you don’t, you can be penalized.
For their part, traditional banks do not present income conditions. On the other hand, bank commissions are much higher: according to Panorabanques, in 2022 the French paid an average of 219.90 euros in commissions in a traditional bank. This is a very high sum for services that not everyone uses on a daily basis.
Online banking vs traditional banking: do you want an advisor near you?
As we mentioned a bit earlier, online banking does not have a physical branch. This makes it impossible to meet an advisor in a law firm, and therefore establish a long-term relationship with a person who knows your case well and who can quickly give you personalized advice. The loss of human contact is one of the main criticisms regularly leveled at online banks.
For its part, the traditional bank puts you in touch with a personalized advisor. This can be useful when applying for a loan, for example, since the person in charge of your file can quickly take into account your situation and your history. This does not mean that it is impossible to obtain a loan through an online bank, since a large number of them offer this opportunity. It’s just that some clients are more adept at making physical contact than others.
So if you need to see your banker regularly, and if the advice of an expert who knows you well is important to you, online banking may not be for you. It is important to ask yourself this question before deciding to opt for a dematerialized bank, at the risk of wanting to go back very quickly.
Online banks offer you money for opening an account
Getting paid for opening a bank account has long been an original and unique concept. Traditional banks have long reserved it for recent grads looking for a bank before embarking on higher education! Today, however, receiving money by opening an online bank account has become very common. And for good reason: all organizations of this type do it.
In general, the amount is between 80 and 150 euros. It happens that it is accompanied by the free payment of certain bank charges for six months to a year. C’est une proposition très séduisante pour la plupart des clients, d’autant plus qu’elle est généralement facile à obtener: une fois le compte ouvert et une somme d’argent versée dessus, vous recevez votre récompense et vous pouvez l’utiliser as you wish.
In addition, online banks also offer, for the most part, an advantageous sponsorship program. If you sponsor your relatives when they open an account in the same bank as you, they receive a bonus, and so do you. Traditional banks generally don’t do this, although faced with competition from online banks, some have adopted it.
For depositing your money in cash or by check, the traditional bank earns points
When you have an account in a traditional bank, depositing a check or cash into your account is child’s play: you only have to go to a window, automatic or not, to make your deposit directly. With an online bank that does not have a branch, the situation is complicated, since you cannot make a deposit at the teller window.
The solution that online banks usually offer is to send checks by mail, accompanied by a receipt that will allow the bank to collect them. When it comes to sending a “big check”, you may be worried about entrusting it to La Poste… And when it comes to cash, most online banks simply refuse it. Only those who have a partnership with a traditional bank can accept them, and they are rarer on the market. This is a point to consider before switching to online banking.
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Source: BFM TV
