Dumping my physical bank?

[RedmondStash]

I've had checking & savings accounts at Bank of America for many years now, since BoA bought the bank I originally opened accounts at. Now I'm considering dumping a physical bank in favor of something like check-writing with Vanguard, auto-pay with (not sure, maybe Ally?), etc., partly for better interest rates. But we have a HELOC at BoA, and access to Merrill Edge if we ever want to investigate that, so I'm unsure of our best option.

Has anyone dumped their physical bank for online-only banking? If so, can you talk about the pros and cons? I'm thinking:
- better interest rates, possibly better HELOC rates at an online bank
- not supporting the weird cluster of fees, policies, and history that is BoA
- easy access to notary public

but also:
- ATM fees at home, because no local branches
- ATM fees while traveling, because no international partner banks like BoA's
- no easy access to a local bank for cashier's checks
- uncertainty about the long-term viability of a bank I've never seen in person

It would just be a big change, so I want to be aware of the possible ramifications.

Thanks.

[starbuck]

When we relocated, we switched from our old credit union to Charles Schwab, with the goal of never needing to switch banks again. My favorite aspect is they reimburse all ATM fees worldwide. 100%, no limits. And it's easy to deposit checks via mobile. You can't deposit cold, hard cash but that hasn't been an issue for us.

Doctor of Credit has a great write up. There's also a $100 generic 'referral' for opening an account.
https://www.doctorofcredit.com/charles-schwab-100-checking-account-bonus-no-monthly-fees-no-international-atm-withdrawal-fees-atm-fee-reimbursements/
https://www.schwab.com/public/schwab/nn/refer-prospect.html

[FIRE@50]

I've considered something like this, but I've never moved on it because it feels like such a big hassle to switch over all of the other stuff I have tied to my BofA checking.

Maybe a local or regional bank would fit your niche of wanting to get away from all the BofA BS but still have access to an ATM and a physical presence that you can see and touch.

[RedmondStash]

When we relocated, we switched from our old credit union to Charles Schwab, with the goal of never needing to switch banks again. My favorite aspect is they reimburse all ATM fees worldwide. 100%, no limits. And it's easy to deposit checks via mobile. You can't deposit cold, hard cash but that hasn't been an issue for us.

Whoa, really? I didn't know that. Thanks!

[Systems101]

I use a credit union.

See: https://forum.mrmoneymustache.com/investor-alley/money-sitting-around-in-savings-accounts/msg1791216/#msg1791216

[Proud Foot]

I've had checking & savings accounts at Bank of America for many years now, since BoA bought the bank I originally opened accounts at. Now I'm considering dumping a physical bank in favor of something like check-writing with Vanguard, auto-pay with (not sure, maybe Ally?), etc., partly for better interest rates. But we have a HELOC at BoA, and access to Merrill Edge if we ever want to investigate that, so I'm unsure of our best option.

Has anyone dumped their physical bank for online-only banking? If so, can you talk about the pros and cons? I'm thinking:
- better interest rates, possibly better HELOC rates at an online bank
- not supporting the weird cluster of fees, policies, and history that is BoA
- easy access to notary public

but also:
- ATM fees at home, because no local branches
- ATM fees while traveling, because no international partner banks like BoA's
- no easy access to a local bank for cashier's checks
- uncertainty about the long-term viability of a bank I've never seen in person

It would just be a big change, so I want to be aware of the possible ramifications.

Thanks.

I haven't checked all online options but some things I have noticed with them regarding some of your questions.

ATM's - Most online only banks seem to charge no ATM fees and will reimburse you for ATM fees.

Physical Branch,Notary Public, Cashier's Checks - Why not keep a free checking account at a local bank with a minimal amount of money in order to access these benefits? Also allows you to deposit checks quicker if they happen to be larger than the mobile deposit limit. Not sure how common this is or the limit amount. My bank has a limit of $3,000 for mobile deposit.

Long Term Viability - The biggest benefit of an online only bank is the decreased cost of capital. Having lower overhead allows them to charge lower rates on loans and pay higher rates on deposits.

[Telecaster]

Fidelity also reimburses ATM fees. 

[MilesTeg]

I use a credit union.

See: https://forum.mrmoneymustache.com/investor-alley/money-sitting-around-in-savings-accounts/msg1791216/#msg1791216

+1

[nwhiker]

So I dumped our physical bank and went with Ally. I have not had any problems with it at all. Ally has a network of ATMs that don't charge a fee, and will reimburse up to certain amount per statement (I believe it is $10 but we have not used the ATM that much). The access to a notary isn't enough to miss out on the higher interest rates on your account.

Regarding a cashier's check you can call the bank and they will issue one, and will even overnight it if you need it ASAP. The only issue is not having the ability to deposit cash but that hasn't been an issue for us.

[protostache]

We've dumped our physical bank for all practical purposes in favor of a Fidelity CMA. We keep a wad of cash in the main checking account because that turns on relationship pricing to get my wife and my our individual "allowance" accounts for free. That bank is also where our empty HELOC is, so we're not going to completely dump them until we move out of this house. When we do move we plan on opening new allowance accounts at Fidelity and a simple free checking account at the nearest brick and mortar so we can do in-person bank things (notary, deposit cash, etc).

[FireHiker]

My husband is a veteran so we use USAA. We've been with them for maybe 6 or 7 years now, and although there are a couple physical branches within a half hour of us, we've never been to one. They reimburse enough ATM fees each month that we've never hit the cap. Depositing checks is really easy. If we ever really needed to deposit cash there are a couple branches, but it's never been a serious issue.

[apkanne]

Another USAA member here, but its the only bank ive ever had. Got it 10 ish years ago in HS. Literally no downsides other than i can't deposit cash money anywhere, but i really pretty much live cashless now. If your parents served, they can join, and that would grandfather you in if you arent a member. My grandfather served, and my mom has been a member for life.

[robartsd]

I do most of my banking with an online bank, but I keep about $1000 at a local credit union. Easy to ACH money between them as needed (probably a few times a year as the local account sees very few transactions).

[Davids]

I still use a physical bank for my checking account which is not a big balance I maintain. Part of it is if I do receive cold hard cash for any reason I have a place to deposit it. Plus if for any reason I need to withdraw cash I rather physically go into bank to do it instead of ATM because I don't trust them due to possible skimmers plus I choose to never carry their debit card.

[RedmondStash]

Have you considered BECU? They have been my primary banking resource since college. I have only needed to go to 5he Tukwila main branch a couple of times. They do stuff like free notarization at their many neighborhood service centers. They may have a referral program. PM me if you want one.

Thanks. I think I've got some friends who speak well of them. I'd forgotten there was a credit union in the area that I might actually be able to join. :)

[inline five]

FWIW I have been opening up bank accounts like mad for their free bonuses. They range in size from huge to smaller regional ones.

I too have had your same bank for years and one thing I notice straight away is how amateurish the other banks are. BoA also has a very strong tiered system where with 100k in Merrill Edge you qualify for a bunch of nice perks like unlimited free ATM withdrawals, interest rate reductions on loans, preferred service (much less wait times) etc.

Since most people don't keep more than a few thousand in their checking account anyway the rates are a non-factor for me personally. I'd rather have all the stuff that comes with the rewards program.

[Hargrove]

I use a credit union and Discover.

Discover offers unlimited free checks. They used to pay you to write checks, but that's gone. I just avoid ATMs and get cash back from my credit union when I buy groceries.

[RedmondStash]

FWIW I have been opening up bank accounts like mad for their free bonuses. They range in size from huge to smaller regional ones.

I'd love to hear more, if you'd care to share any further info or insights.

I've been thinking about exploring this: opening accounts for bonuses, Merrill Edge, etc. I've read hints here and there in forum threads, and it sounds interesting, but I don't know much about it yet.

[inline five]

FWIW I have been opening up bank accounts like mad for their free bonuses. They range in size from huge to smaller regional ones.

I'd love to hear more, if you'd care to share any further info or insights.

I've been thinking about exploring this: opening accounts for bonuses, Merrill Edge, etc. I've read hints here and there in forum threads, and it sounds interesting, but I don't know much about it yet.

It does involve some work. However it's not nearly as much as you'd think as long as you are organized. Also you do need some form of direct deposit available, changing mine at work is very easy and done online and I can break it down to various amounts. I am looking at opening up a business account with the ability to send direct deposit however to speed up my process.

Here is a picture of a $500 bonus. I did it for my wife and I so we got $1000. I made over $2k last month.

[inline five]

Well I can't post a picture. I attached it from my iPad but the site shuts down when posting. Oh well.

[db_cooper]

FWIW I have been opening up bank accounts like mad for their free bonuses. They range in size from huge to smaller regional ones.

I too have had your same bank for years and one thing I notice straight away is how amateurish the other banks are. BoA also has a very strong tiered system where with 100k in Merrill Edge you qualify for a bunch of nice perks like unlimited free ATM withdrawals, interest rate reductions on loans, preferred service (much less wait times) etc.

Since most people don't keep more than a few thousand in their checking account anyway the rates are a non-factor for me personally. I'd rather have all the stuff that comes with the rewards program.

In WA, basically anyone can join any credit Union, a nice perk of living here. No reason not to have a local account for convenience.  We being to a tiny local CU, that way I can grab cash when needed or meet people there for transactions. Don't carry a debit card, exceeds my risk threshold.  No fees, just have to buy 100 checks every decade. Consider it insurance against in case we are ever victims of identity fraud.  They've known us for 20 years.

[inline five]

FWIW I have been opening up bank accounts like mad for their free bonuses. They range in size from huge to smaller regional ones.

I too have had your same bank for years and one thing I notice straight away is how amateurish the other banks are. BoA also has a very strong tiered system where with 100k in Merrill Edge you qualify for a bunch of nice perks like unlimited free ATM withdrawals, interest rate reductions on loans, preferred service (much less wait times) etc.

Since most people don't keep more than a few thousand in their checking account anyway the rates are a non-factor for me personally. I'd rather have all the stuff that comes with the rewards program.

In WA, basically anyone can join any credit Union, a nice perk of living here. No reason not to have a local account for convenience.  We being to a tiny local CU, that way I can grab cash when needed or meet people there for transactions. Don't carry a debit card, exceeds my risk threshold.  No fees, just have to buy 100 checks every decade. Consider it insurance against in case we are ever victims of identity fraud.  They've known us for 20 years.

I guess I don't really see the point though, unless it's out of spite. Why not have an account with a bigger bank that offers more benefits and you still won't pay any fees. I have been in a CU in the past, it was just "what the locals do", but they never really sat there and thought through it. I quickly moved to a big bank and haven't looked back.

CU's also have very arcane rules when you take out a loan with them. Buyer beware!

[Paul der Krake]

I don't get why people love BECU so much. Their rates aren't particularly good, and they seem to be spending an awful lot on advertising.

In fact, that sums up my opinion of credit unions in general. They offer the same services as banks, worse technology, but warm fuzzy feelings about not being a bank.

[Gondolin]

I've been all online with Schwab for the past 5 years and it's great for all the reasons already mentioned (especially the ATM reimbursement).

The only con is that in the rare instance you need to withdraw a large sum of cash. Then, you'll have to pay for them to overnight you a bank check and cash it at a brick and mortar bank. Typically, thud will require opening an account with the brick and mortar bank.

[inline five]

I've been all online with Schwab for the past 5 years and it's great for all the reasons already mentioned (especially the ATM reimbursement).

The only con is that in the rare instance you need to withdraw a large sum of cash. Then, you'll have to pay for them to overnight you a bank check and cash it at a brick and mortar bank. Typically, thud will require opening an account with the brick and mortar bank.

Yet some big banks also give unlimited free ATM reimbursment. So I guess I don't see the benefits of these online only places. No one has one additional benefit besides these ATM reimbursements which many here will qualify for too.

[LPG]

I'd like to second the mention of Charles Schwab. 100% ATM fee reimbursement means I never have to care about what ATM I use (Way better than having a physical bank with limited free options). It also gives easy access to investment accounts with low-fee index funds.

For non-investment savings like a house downpayment, I'm using Discover Bank's online savings account. No hassle, 1.75% interest rate, seems to gradually increase interest rate in line with market interest rate increases (Was 1.5% when I opened it). I'm not going to actively recommend it like I would with Schwab's checking account, but it's serving a purpose.

[BrightFIRE]

I haven't had a physical bank in 18 years. I currently use Alliant Credit Union, based in Chicago. I live in Philadelphia. Alliant is really solid, and have raised their savings account rate like 5 times this year. Currently at 1.75%. They also typically process ACH transactions in 1 day. Great web interface, good phone app, social media presence, etc. Like a big bank, but without crappy fees!

A few things you seem unaware of, since you've been stuck with BoA:
1.Many banks/CUs reimburse ATM fees. I believe Alliant will reimburse up to $20/month. As mentioned, Schwab will reimburse worldwide, so I use their debit card when traveling internationally.

2. Credit unions have a network that enables you to use local credit unions as though you have an account there. I think they call it shared banking? At any rate, if I needed physical bank services, I would go to a local CU and they would treat me like a member. (This has only happened once in 18 years.) I also can go to nearly any CU ATM and it is a fee-free transaction, so I hardly ever have to get an ATM reimbursement.

[katsiki]

I switched to Alliant CU about 2 years ago.  I had loans and CCs with them before that but didn't want to dump my local bank.  Eventually, I was mad enough at the local bank (really, large national bank) and took the plunge.  No issues yet.  Alliant refunds ATM fees up to $20 per month which more than covers me.  Wife also switched and has had no issues.  Mobile app is pretty good as well.

I also have Fidelity Cash Management account.  It refunds ATM fees (maybe unlimited) and provides free checks.  It and Schwab are often mentioned in these conversations.  Both are also good for international use.

Good luck!

[jim555]

I have a lot of accounts, just to collect bonus offers.  I am too lazy to close them.

[Antonn Park]

I got rid of my BOA savings account and got a Radius checking and savings account. You can earn 1.50% APY (taxable) on balances of $2,500+. I've never had an issue with it and no fees have been taken out.

[undercover]

BoA is an "online bank". The question is...what features do you want/need that you don't currently have?

Physical banks have long been a joke in my eyes. It might be useful to meet someone at a bank for a period of time to develop a relationship with them so you can negotiate loans and rates if you're a business or investor, but past that there's literally zero reason for a consumer to visit a physical bank. Of course the one exception is cash...which society is slowly doing away with via P2P payment apps. And of course debit cards are probably the least secure thing you could use in terms of payment.

I've used Schwab exclusively for as long as I've allowed others to store my money. But I don't necessarily need them. I just wanted a free checking account. And I'll buy SCHB instead of VTSAX...no difference. The only real benefit you're getting over another bank is ATM fee reimbursement. You get free checks too...but...meh. Schwab doesn't offer jack when it comes to a savings account so you'd still need another account for that. If you want savings/checking all in one with the most features/best rate then Ally I think is the best bet (they refund up to $10 in ATM fees whereas Schwab is unlimited). But, again....meh. I'm not a fan of storing large sums of money for interest rates less than inflation for long periods of time...

TLDR: the "features" are the only thing differentiating BoA vs. a bank with no B&M locations and those features are becoming less and less relevant. You need a digital place to store funds, that's about it. Any bank will do unless you deal with large sums of cash in which case you'll still need a physical bank regardless so unless you're going to take advantage of free checks and ATM fee reimbursements then there's no point in switching.

[Peachtea]

I've been all online with Schwab for the past 5 years and it's great for all the reasons already mentioned (especially the ATM reimbursement).

The only con is that in the rare instance you need to withdraw a large sum of cash. Then, you'll have to pay for them to overnight you a bank check and cash it at a brick and mortar bank. Typically, thud will require opening an account with the brick and mortar bank.

Yet some big banks also give unlimited free ATM reimbursment. So I guess I don't see the benefits of these online only places. No one has one additional benefit besides these ATM reimbursements which many here will qualify for too.

You’re comparing benefits you’re getting from having a lot of money with BOA to the benefits you can get with very little money at online banks. BOA requires 20k total to reimburse 12 atm fees a year. It also requires 10k minimum to waive the monthly fee for interest checking or 1500 minimum or 250 direct deposit to waive the monthly fee in non-interest checking. Schwab’s interest checking is completely free with no minimum balances and reimburses all atm fees. This is true of other online banks. So online banks are very appealing for those just starting out, those who invest somewhere else, like directly with vanguard, and keep checking low, or those who like multiple checking accounts with low balances (and so don’t meet the min. direct deposit amounts).

Plus if you go to an online bank for the higher interest rates on savings accounts then you have less money to meet the big bank minimums to get free checking and perks. If you’re someone who likes to have a decent sized EF in a savings account, it’s a not insignificant difference in the interest. BOA has .03 for less than 20k and tops out at .06 interest, whereas online banks like Discover are currently at 1.75 regardless of your balance.

And for those who like traveling internationally Schwab (and I think Ally or CapitalOne?) also charges no international fees when withdrawing cash abroad. Most of the big banks do. (This is a separate fee from atm fees.)

[dacalo]

It's not binary at all.

I dumped physical banks for Alliant Credit Union. Not only do they offer awesome rates similar to Ally, I can DEPOSIT CASH in any ATM's in their network. Yes, you read that right, you can deposit cash, so I get the benefit of both worlds. Oh they also reimburse ATM fees immediately.

I've used Fidelity CMA, Chase, Wells Fargo, US Bank, Ally and others but we are staying with Alliant.

[FiftyIsTheNewTwenty]

I haven't had a physical bank for my personal banking for over 20 years, and over 15 years for business.  These days it's so easy to do everything from a phone.  A lot of banks rebate ATM fees, or you can get cash back while shopping.

[RedmondStash]

OP here -- this is all really helpful. Thank you all for sharing your experiences.

I've definitely got some thinking to do. Inertia can carry you past better opportunities; I'm ready to do combat with inertia.

Thanks again.

[cchrissyy]

Schwab is well-covered on the topic of ATM fee reimbursement. worldwide! at every ATM!

just want to add:

they will give you unlimited free checks

there is free billpay so you maybe don't need your own stash of paper checks, you can mostly send people checks online. you type it
in, Schwab mails a physical check for you.

they will give you unlimited deposit envelopes  (prepaid mail)

but you don't need to mail them because the app will deposit checks very easily for you, just take a photo.

also, there are no foreign transaction fees when you use the schwab debit/visa card internationally.

[katsiki]

It's not binary at all.

I dumped physical banks for Alliant Credit Union. Not only do they offer awesome rates similar to Ally, I can DEPOSIT CASH in any ATM's in their network. Yes, you read that right, you can deposit cash, so I get the benefit of both worlds. Oh they also reimburse ATM fees immediately.

@dacalo I have not discovered this feature yet.. Is this restricted to a certain ATM network?  This will be a nice plus if I have it nearby.

[RedmondStash]

there is free billpay so you maybe don't need your own stash of paper checks, you can mostly send people checks online. you type it
in, Schwab mails a physical check for you.

Wow, I did not know that either. That's actually really interesting; I've avoided setting up auto-bill-pay for some bills that charge a high fee or % for online pay. Sounds like this option might circumvent that. Very cool.

[robartsd]

there is free billpay so you maybe don't need your own stash of paper checks, you can mostly send people checks online. you type it
in, Schwab mails a physical check for you.

I'm sure they prefer that your payees set up to accept funds electronically (major payees prefer not having to deal with paper checks as well, so that works out on both sides).  Free bill pay is a basic requirement for me to consider a bank for my primary checking account. Any recurring payment that can't be charged through a rewards card without a fee gets paid through bill pay (including the monthly credit card balance payoff).

[inline five]

I've been all online with Schwab for the past 5 years and it's great for all the reasons already mentioned (especially the ATM reimbursement).

The only con is that in the rare instance you need to withdraw a large sum of cash. Then, you'll have to pay for them to overnight you a bank check and cash it at a brick and mortar bank. Typically, thud will require opening an account with the brick and mortar bank.

Yet some big banks also give unlimited free ATM reimbursment. So I guess I don't see the benefits of these online only places. No one has one additional benefit besides these ATM reimbursements which many here will qualify for too.

You’re comparing benefits you’re getting from having a lot of money with BOA to the benefits you can get with very little money at online banks. BOA requires 20k total to reimburse 12 atm fees a year. It also requires 10k minimum to waive the monthly fee for interest checking or 1500 minimum or 250 direct deposit to waive the monthly fee in non-interest checking. Schwab’s interest checking is completely free with no minimum balances and reimburses all atm fees. This is true of other online banks. So online banks are very appealing for those just starting out, those who invest somewhere else, like directly with vanguard, and keep checking low, or those who like multiple checking accounts with low balances (and so don’t meet the min. direct deposit amounts).

Plus if you go to an online bank for the higher interest rates on savings accounts then you have less money to meet the big bank minimums to get free checking and perks. If you’re someone who likes to have a decent sized EF in a savings account, it’s a not insignificant difference in the interest. BOA has .03 for less than 20k and tops out at .06 interest, whereas online banks like Discover are currently at 1.75 regardless of your balance.

And for those who like traveling internationally Schwab (and I think Ally or CapitalOne?) also charges no international fees when withdrawing cash abroad. Most of the big banks do. (This is a separate fee from atm fees.)

Yes that's true, BUT your money can be in Merrill Edge not the low % BoA account to comply with their minimums. Since most on here are savers they will also have a decent brokerage account as well.

I am looking at Consumer Credit Union however with their 3%+ rates on $20k.

On a side note this pushed me to transfer my emergency fund money back into a higher yielding money market account.

[dacalo]

It's not binary at all.

I dumped physical banks for Alliant Credit Union. Not only do they offer awesome rates similar to Ally, I can DEPOSIT CASH in any ATM's in their network. Yes, you read that right, you can deposit cash, so I get the benefit of both worlds. Oh they also reimburse ATM fees immediately.

@dacalo I have not discovered this feature yet.. Is this restricted to a certain ATM network?  This will be a nice plus if I have it nearby.

Yes this feature is limited to Alliant's partner network but we've moved around a few times since we joined and we found an ATM within a couple of miles each time. Are you currently banking with Alliant?

[katsiki]

It's not binary at all.

I dumped physical banks for Alliant Credit Union. Not only do they offer awesome rates similar to Ally, I can DEPOSIT CASH in any ATM's in their network. Yes, you read that right, you can deposit cash, so I get the benefit of both worlds. Oh they also reimburse ATM fees immediately.

@dacalo I have not discovered this feature yet.. Is this restricted to a certain ATM network?  This will be a nice plus if I have it nearby.

Yes this feature is limited to Alliant's partner network but we've moved around a few times since we joined and we found an ATM within a couple of miles each time. Are you currently banking with Alliant?

Yes, and thanks for the reply.  It looks like there is one in the next city over.  It could come in handy and be worth the drive in a pinch.