Online banks offer perks that are frequently missing from traditional banks. They boast lower fees, higher interest rates, and, most importantly, convenience. The top digital banks merge these benefits and more.

We’ve put together a list of the best online banks on the market to help you find the right digital bank for you.

The Best Online Banks of 2023

The best online bank is the one that meets your unique needs. If you’re looking for a digital bank, we’ve put together a list of the best online banks out there to help you narrow your search.

BEST OVERALL

Discover

With stellar customer reviews, competitive rates, and excellent account offerings, Discover is our pick for the best overall online bank.

Pros: 

• No monthly fees 
• No overdraft or insufficient fund fees
• Competitive APYs
• High customer ratings

Cons:

• Doesn’t accept cash deposits 
• No physical branches

Discover is a digital bank that offers something for everyone. Its products include some of the best credit cards on the market and savings accounts that can earn you 5x the National Savings Average. 

Discover makes banking and managing money easy for its customers. Its highly-rated mobile app has an impressive 4.9 out of 5 stars on the App store and 4.6 out of 5 stars on Google Play. It also offers over-the-phone customer support available 24/7 — a significant benefit when there are no physical branch locations.

The checking and savings accounts have no monthly or maintenance fees and offer competitive rates and rewards. Discover’s Online Savings Account offers a 4.30% APY, while its checking account gets you 1% cash back on up to $3,000 in debit card purchases. 

The online bank also offers convenient, easy access to a large ATM network nationwide. However, cash deposits are not currently accepted, which can be a major downside if you intend to deposit cash frequently.

Fees	None
APY	4.30% APY savings account, 1% cash back checking account
Banking experience	High user ratings and 24/7 customer support
Accessibility (ATM networks)	60,000+ no-fee ATMs nationwide

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BEST FOR CHECKING ACCOUNTS

Quontic

Quontic is a strong choice if you’re looking for an online checking account that earns a very competitive interest rate at no extra cost.

Pros: 

• High interest on checking account
• No monthly maintenance fees 
• Quontic Pay Ring feature 

Cons:

• Minimum POS transactions required to qualify for high APY
• No customer support on weekends 

Quontic’s High-Interest Checking account can earn you up to 1.10% APY without charging any monthly or overdraft fees. To qualify for this high yield, you’ll need to make at least 10 debit card transactions of $10 or more each statement period. If you use your card regularly, this minimum requirement shouldn’t be a problem. However, if you’re an infrequent debit card user, failure to make the minimum number of transactions will result in a mere 0.01% APY. 

A unique feature offered by Quontic is the Quontic Pay Ring — a wearable payment ring that allows you to make contactless purchases by tapping it. For those who value convenience and don’t like to carry their debit card around everywhere, the ring may prove to be a game changer. 

Quontic also offers two other types of checking accounts, including a Cash Rewards Checking that earns 1.0% cash back on eligible purchases and a Bitcoin Rewards Checking that gets you 1.5% bitcoin on purchases. 

The online bank offers an extensive ATM network and 24/7 access to online and mobile banking. Apple users rate the Quontic app 4.4 stars out of 5, while Android customers are not as impressed, giving it only 3.3 stars. If you need assistance, their customer service agents can be reached by phone from 9 am-6 pm on weekdays, but they’re not available on weekends.

Fees	None
APY	1.10%
Banking experience	Monday-Friday customer support
Accessibility (ATM networks)	90,000+ no-fee ATMs nationwide

Visit Website

BEST FOR SAVINGS ACCOUNTS

CIT Bank

CIT’s savings account pays one of the highest yields in the country. And unlike some online banks, it doesn’t ask you to meet strict criteria or put down a large minimum deposit to qualify for it.

Pros: 

• High APY on savings account 
• No monthly service fees 

Cons:

• Doesn’t accept cash deposits 

CIT Bank has a range of savings accounts that offer competitive rates and don’t charge any service fees. The Savings Connect account pays you a high 2.10% APY and only requires a $100 minimum opening deposit. Its other savings accounts also have competitive yields, but they’re certainly not the best on the market. For instance, the Savings Builder account offers only 0.85% APY and requires a minimum balance of $25,000 or a monthly deposit of $100. 

Like other online banks, CIT is a great fit for people who like the convenience of banking on their phone or computer. The app receives 4.6 out of 5 stars on App Store and 3.0 stars on Google Play. If you have any banking questions, telephone support is also available with extended hours from Monday to Saturday and is closed on Sundays. 

Unlike other digital banks on our list, CIT doesn’t have a network of no-fee ATMs. However, you can use other banks’ ATMs and CIT will reimburse you up to $30 of those fees per month. If you use the ATM regularly to withdraw money, for example, any fees you incur above $30 will be an out-of-pocket expense.

Fees	None
APYs	2.10%
Banking experience	24/7 online access + Monday-Saturday telephone support
Accessibility (ATM networks)	No free ATM networks, but CIT will reimburse you up to $30 in ATM fees each month

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BEST FOR CHECKING AND SAVINGS ACCOUNTS

SoFi

SoFi has a unique product offering — a 2-in-1 checking and savings account that comes with a competitive rate and a generous sign-up bonus.

Pros: 

• High APY
• No account fees
• Up to $250 sign-up bonus
• No overdraft fees
• No minimum deposit required
• 15% cash back at local establishments

Cons:

• Checking and savings accounts are combined
• Cash deposits cost $4.95 at Green Dot retail locations 

If you’re looking for checking and savings accounts that offer a competitive rate, SoFi is a strong candidate, as long as you’re okay with combining your accounts. 

SoFi’s new online banking account is a checking-savings account hybrid that earns a very competitive 4.40% APY. On top of that, you can get up to 15% at local establishments when you pay with your SoFi debit card. As a sign-up bonus, SoFi is also giving customers up to $250 when they set up a direct deposit. However, your direct deposit needs to be $5,000 or more if you want to receive the full $250 bonus. 

Like its competitors, it doesn’t charge any account fees or other hidden fees most traditional banks usually charge. 

SoFi is not an ideal choice for customers who make regular cash deposits to their accounts. Cash deposits are only available at participating retail locations and each deposit will cost you $4.95. 

The customer experience is something SoFi excels at. SoFi has a highly rated mobile app (4.8 and 4.1 stars on the App Store and Google Play respectively), and an exemplary customer support system. There’s a 24/7 virtual chat assistant, a Twitter account dedicated to customer support, and each product offering has a designated customer support line. 

Fees	None
APYs	4.40%
Banking experience	Strong customer support via phone, Twitter, and online chat.
Accessibility (ATM networks)	55,000+ no-fee ATMs nationwide

Visit Website

BEST FOR CASH DEPOSITS

Alliant Credit Union

Alliant’s cash-deposit ATMs aren’t the only feature that makes it a solid digital banking solution — it also offers competitive rates and excellent customer service support.

Pros: 

• Cash-deposit ATMs available nationwide 
• Competitive APYs
• No fees 
• $20/month in ATM fee rebates 

Cons:

• Cash-deposit ATMs are limited if you live in a rural area 

Online banks are not exactly known for making it easy to deposit cash. Alliant is one of the few digital banks (credit union to be exact) that allow customers to deposit money through one of their many cash-deposit ATMs. 

While Alliant has more than 80,000 ATMs nationwide, not all of them are cash-deposit friendly. 

You can find one near you by searching for deposit-taking ATMs through their website, but you may have trouble finding one if you live in a remote area or far from a big city. 

Alliant is a reputable credit union with a range of products, including online checking and savings accounts that earn above-average rates and don’t charge any fees. It also offers a user-friendly online banking platform, a highly rated mobile app (4.7 out of 5 stars on the App Store and 4.5 out of 5 stars on Google Play), and 24/7 customer support.  

Fees	None
APYs	3.10% APY for savings account, 0.25% for checking account
Banking experience	Highly rated digital experience & 24/7 over-the-phone customer support
Accessibility (ATM networks)	80,000+ no-fee ATMs nationwide

Visit Website

BEST FOR THE RANGE OF SERVICES PROVIDED

Ally

Ally is a top choice among online banks for a reason: it combines a robust product offering, strong rates, and a customer-centric digital banking experience.

Pros: 

• Robust product offering
• High APYs on checking and savings accounts
• No monthly fees 

Cons:

• No way to deposit cash

Ally offers customers a full range of banking products like checking accounts, Robo portfolios, auto loans, mortgages, and more. It also offers accounts with high interest rates, like its 4.00% APY online savings account. 

The online bank also doesn’t charge any monthly or overdraft fees and offers a chat option or 24/7 telephone banking support. The convenience of a 24/7 customer support line is a significant advantage, considering Ally, like most digital banks, doesn’t have any physical branches. 

Ally’s digital banking platform is very user-friendly and uses simple, jargon-free language to help customers navigate it. The app gets 4.7 out of 5 stars on the App Store and 3.6 stars on Google Play.

Fees	None
APYs	4.0% APY for a savings account, 0.25% APY for checking account
Banking experience	Customer-centric online experience and 24/7 live agent support
Accessibility (ATM networks)	43,000+ no-fee ATMs nationwide

Visit Website

The Pros and Cons of Online vs. Traditional Banks

Both online banks and traditional banks are safe places to keep your money and handle your finances. Just like “old-school” banks, most digital banks are FDIC-insured, meaning your money is safe and secure. While both types of banks help you manage your money, they differ when it comes to features and capabilities.

Traditional banks have been around for much longer and offer in-person customer support through their nationwide network of branches. They also offer a wider range of financial products like mortgages or auto loans. As of now, many digital banks offer fewer options than big banks provide.

That being said, online banks offer plenty of other features that make them an increasingly popular choice among US consumers.

Pros of Online Banks

Fewer and lower fees compared to traditional banks — As we mentioned before, online banks don’t have the same overhead costs that traditional banks do. This advantage allows them to charge little to no monthly maintenance fees, overdraft fees, ATM fees, or any other pesky hidden fees.

Higher APYs — According to the FDIC, the national average interest rates are 0.13% on savings accounts and 0.03% on checking accounts. Online banks offer up to 5x the national average (sometimes even more), giving customers a chance to earn more on their savings.

A better quality online experience — Because online banks operate entirely online, they typically offer a better, user-oriented digital experience to customers than their brick-and-mortar counterparts.

Not convinced yet? Here are some other benefits of online banks:

• Convenience and flexibility
• Built-in features like automatic savings and budgeting tools
• 24/7 or extended customer support hours
• Easy and speedy account opening process
• Easy to keep track of your finances from anywhere in the world
• Little to no paperwork involved

If you’re comfortable in the digital world, an online bank may be the best choice for you.

Cons of Online Banks

Digital banks come with an array of advantages, but they’re not for everyone. Here are some of the major downsides of digital banking:

• Lack of cash deposit options
• No physical locations or face-to-face service
• Lack of personal relationships
• Limited range of products and services

If you’re someone that deposits cash frequently and values personal interaction, you may opt for the traditional bank route.

Bottom Line

Online-only banks offer a range of significant benefits that make them a great alternative to traditional banks. Before choosing a digital bank, consider what features are most important to you.

Ultimately, the best online bank for you is the one that offers the right combination of features and products that meet your unique needs.

The post 6 Best Online Banks of 2024 for Great Features and Services appeared first on FinMasters.

The Pros and Cons of Chime

Chime Financial, Inc. is a “neobank”, offering a number of financial technology or FinTech services to consumers. Its fee-free digital bank services are actually not provided by Chime itself, but rather by its partners, The Bancorp Bank and Stride Bank, N.A.

Chime’s Advantages for Consumers

Chime offers two different types of account plans for consumers: a checking account and a high-yield savings account. Because these accounts are provided by Chime’s bank partners, account deposits are insured through the FDIC up to $250,000.

Chime accounts offer several attractive benefits, including the ability to receive direct-deposit funds up to two days early. Checking account owners who have also enrolled in direct deposit can incur overdrafts of up to $200 without fees. Account owners also receive a Visa debit card to use with their Chime account without a credit check.

The Chime savings account features an annual percentage yield (APY) of 2.0%, which is competitive with other digital banks’ savings accounts. There is no monthly fee and no minimum required deposit for the savings account. However, only checking account owners can open a Chime savings account.

Drawbacks to Banking With Chime

As is true of most digital banks, Chime doesn’t offer any brick-and-mortar branches for personal service. Additionally, customers can only take advantage of mobile check deposit services if they’ve also enrolled in a direct deposit program through an employer.

Of greater concern is a recent history of customer complaints regarding Chime’s closing of accounts and withholding of funds on deposit. ProPublica investigated the issue and reported on the company’s practices in 2021, noting that over 900 customers had filed complaints with the Consumer Finance Protection Bureau (CFPB).

Other consumers have raised concerns about alleged fraudulent transactions in their Chime accounts, for which the company is said to have offered no assistance. Some complaints indicated that money was taken from accounts in transactions the customers insisted were unauthorized. Chime said its investigations disproved the claims.

Best Online Bank Alternatives to Chime

Now that you know a little more about this bank, let’s take a look at some reputable alternatives to Chime competing in the market today.

1. Ally
2. Aspiration
3. Axos Bank
4. Capital One 360
5. Current
6. Discover Bank
7. One Finance
8. Quontic
9. Revolut
10. Varo

Compare Chime alternatives

1. Ally

Ally Bank is one of the leading alternatives to Chime, offering a fairly diverse array of account types, including checking and savings accounts. One of its biggest benefits to checking customers is its lack of monthly fees and minimum balances.

Ally also offers credit cards, personal loans, and investments. Its interest rates for funds on deposit in savings accounts remain consistently among the highest in the industry at 4.00% APY for the high-yield savings account.

Ally’s business services are somewhat limited and it has no business checking account on offer.

It also does not support outgoing wire transfers to international recipients, although customers can receive international transfers. As with most digital banks, it does not provide physical locations and there’s no way to deposit cash.

Some consumers have raised concerns about the length of time Ally takes to clear a deposited check.

2. Aspiration

Aspiration offers a unique way to bank online for consumers who want to put their money where their conscience is.

Built on a promise that funds on deposit will never be used to finance ecologically damaging industries and businesses, Aspiration also rewards its consumers when they patronize brands that demonstrate social awareness and consciousness with cash back rewards from between 3% and 5% on qualifying purchases made with the Aspiration debit card.

Remarkably, customers can set their own monthly fee for this account through a “Pay What Is Fair” term—even if the customer wants to pay nothing at all. Customers can upgrade to Aspiration Plus accounts for added benefits and a small monthly fee.

Aspiration doesn’t quite have the breadth of account options that some other companies offer, and it doesn’t pay interest on standard saving account deposits.

If you’re committed to environmental causes, Aspiration is an option you’ll want to consider. If you’re not, Aspiration’s support of those interests won’t necessarily add value.

3. Axos Bank

Axos Bank offers a number of different types of accounts and banking products for both consumers and small businesses.

You can choose from several types of no-fee accounts, from the basic, no-frills Essential account to CashBack checking with 1% rewards for signature-based transactions. There are even specialized accounts for specific demographics, such as Golden Checking for customers over 54 years old and First Checking for young teens.

Axos products aren’t without some downsides. For example, many digital banking companies offer increasing interest rates for their CD products over time, whereas Axos maintains its rate no matter what the CD’s term.

You’ll also pay some transaction fees for certain services, including international card payments.

4. Capital One 360

The Capital One 360 Checking account combines the best features of neobanks with some benefits of traditional banks, such as physical branch locations across the U.S., allowing users in-person access to assistance when needed.

This fee-free account comes with no minimum balance requirements.

You can choose between an online-only account or a hybrid form that allows physical access. Many customers appreciate the stability of a more established, long-lived company that’s part of an expansive ATM network. That makes it one of the most popular Chime alternatives on this list.

Capital One’s digital accounts usually do not permit international wires, so if that’s important to you, you’ll want to look elsewhere. Additionally, users are charged fees for certain types of transactions, such as outgoing wire transfers to other U.S. recipients.

5. Current

Current offers mobile-only checking and savings accounts with features that especially appeal to parents and teenagers. Current is a fintech, not a bank, and banking services are provided by Choice Financial Group, which is FDIC insured.

Customers enjoy low fees overall but be aware that there are some fees that can’t be avoided such as $3 fee + 3% International Transaction fee for cash withdrawals at an International ATM, for instance. Basic checking accounts are no-fee, as well as the premium version, and the popular Teen Banking account.

Current checking accounts do not offer the opportunity to earn interest on deposited funds, but they do offer the opportunity to build credit when you use tour Current debit card. Savings accounts offer up to 4% APY.

If you’re searching for more robust or sophisticated banking solutions with a variety of features and tools, you might find Current products a bit too restrictive and bare-bones.

If you lose your debit card, you’ll have to fork over $5 for the replacement, or $20 for an express fee to get it as soon as possible.

6. Discover Bank

Discover, a major credit card company with over 40 million customers, also offers online banking services.

Its accounts carry no annual fees and extremely competitive interest rates on its money market and savings accounts, up to five times the national average for similar accounts. The company provides an intuitive digital interface with a good user experience (UX).

Discover’s products also extend to personal loans, home equity loans, and several credit cards with varying types of bonuses and rewards offered.

As with many digital banks, Discover Bank does not offer in-person services or brick-and-mortar branch offices. You can also probably find better initial sign-up bonuses from other providers, but if that matters less to you than keeping most or all of your digital banking at one location, you’ll want to give Discover a closer look.

7. One Finance

One Finance offers savings and checking services to consumers featuring a commitment to competitive interest rates for savings accounts and lines of credit through its partnership with Coastal Community Bank. It wraps both savings and checking into a single account that offers a debit card, overdraft protection, early access to direct-deposit funds, and savings benefits such as an APY of up to 5.00%. 

That single account might appeal to many consumers in its simplicity, but it might also strike others as highly limited. And, like other digital banks, it offers no physical branch locations or offices for in-person service.

8. Quontic

Quontic bills itself as an “adaptive digital bank” that offers interest on checking accounts with a $100 minimum opening deposit in an attempt to meet the needs of consumers who are underserved or shut out by traditional banking institutions.

It offers a diverse array of checking and savings accounts, as well as mortgage lending services.

Quontic does have some physical locations for mortgage lending services in the U.S.

Although Quontic charges no fees for many of the most common checking and banking services, such as incoming wires, cashier’s checks, money orders, and overdrafts, you will incur fees for a dormant account, stop payments, and other services.

9. Revolut

Revolut lets its customers choose from three tiered account levels: Standard, Premium, and Metal. Each account carries its own set of terms, from the no-fee Standard to the $45 per month Ultra account.

It offers users free transfers to other Revolut customers, early direct deposit access, and a competitive rewards program including cash back for purchases made at partner vendors.

Customers will also appreciate Revolut’s financial tools, including analytics and budgeting aids.

Revolut has no brick-and-mortar locations in the U.S. or elsewhere, and some features are limited to other geographic markets outside U.S. borders. Additionally, in order to access the greater benefits of the premium accounts, customers must pay high monthly fees.

10. Varo

Varo Bank offers no-fee checking accounts through its own banking charter (no partner banks). You can choose from a checking account, a savings account, and cash advances, as well as take advantage of financial planning and credit-building tools to help you reach your money goals faster. Varo products mostly carry no fees.

Varo is a member of a large ATM network, assuring access to cash when and where you need it.

The APY is fairly competitive starting at 3% for customers who receive direct deposits of $1,000 per month or more. Customers can later qualify for an APY of 5% by receiving direct deposits totaling $1,000 or more, and ending the month with a positive balance in both the Varo Bank Account and Savings Account.

On the downside, Varo offers no sign-up bonuses, whereas many competitors do. Like most digital banks, it has no physical locations. And some users may find its account choices somewhat restricted.

Compare Chime Alternatives

Bank on Digital for Your Financial Needs

If you’re looking for a new bank, digital banks are an increasingly attractive option. Chime and these alternatives to Chime offer many of the same banking services you’d get from a physical bank, often at attractive terms.

A little research and time can help you identify the company that comes closest to fitting your needs.

Let your answers to these questions guide your search. Be sure to look up independent reviews for any digital bank, whether it’s Chime or one of these alternatives to Chime, and don’t hesitate to reach out to customer support for your top candidates and ask any remaining questions you may have. Sometimes, a positive customer service experience can tip the scales in favor of a decision.

The post Top 10 Chime Alternatives for 2024 – Banking Beyond Chime appeared first on FinMasters.

This guide presents a selection of top Venmo alternatives, detailing their features, benefits, and how they compare to help you make an informed choice.

Top Venmo alternatives:

1. PayPal
2. Zelle
3. Apple Pay/Apple Cash
4. Cash App
5. Google Pay
6. Meta Messenger Pay

The Pros and Cons of Venmo

Originally intended as a simplified way to help friends split a check or send money back and forth, Venmo has evolved quite a bit since its public debut. The peer-to-peer functionality is still free if you use your Venmo balance. You can use the Venmo debit card or the app itself to make purchases at millions of retail businesses. You can also use a credit card to fund purchases.

Because money changes hands instantly and is accessible for use through the Venmo debit card or the app itself, you don’t necessarily have to replenish your balance in order to send money or make a purchase. And true to its origins, it remains a very popular way to split a check or share a bill with others, such as roommates or friends.

Spending Limits

Venmo sets an initial spending limit of $299.99. However, users can verify their identities to enjoy an increased limit of $50,000 every seven days.

Fees

Venmo doesn’t charge fees for sending money between friends and other individuals, but it does assess a 2.9% transaction fee for purchases and other business-related payments. If a user wants to instantly transfer funds from Venmo to a linked card, Venmo charges a 1.75% fee.

Privacy Concerns and Venmo

The signature feature of the app is its social feature, which is the underlying source of the privacy debate over the app. By publishing a constantly updating feed of users and transactions, Venmo perhaps unwittingly created an opening for a determined person to trace connections and even snoop out private accounts, potentially opening up users to fraud and identity theft. Outlets such as Wired began calling out Venmo’s security and privacy concerns as early as 2018. 

That potential vulnerability was publicly revealed in dramatic fashion during the summer of 2021, when, less than six months into the Biden administration’s first term, Buzzfeed reporters discovered the secret Venmo accounts of the President and First Lady, as well as a number of people in the couple’s private social network. That revelation sent many users out on a search for alternatives to Venmo.

Originally, Venmo user account settings defaulted to “public” so that if the user didn’t mark transactions as private, others could monitor their transactions on the app. In response to the discovery of the Biden’s accounts, Venmo made some changes. For instance, the app added user controls to set the friends list to private, public, or visible only to friends.

You can also help protect your account by setting your transactions to private, making your Venmo user ID anonymous (i.e., not your actual name), and limiting who you connect with on the app.

6 Best Venmo Alternatives

If the privacy issues or other features don’t seem right for you, consider these alternatives to Venmo.

#1

PayPal

Available On: Web; Android; iOS

Fees: No fee for P2P transfers or purchases for consumers; 2.99% for businesses

Spending Limits: None (though your bank may set limits)

Visit Website

Learn more

#2

Zelle

Available On: Within bank apps and sites; Android; iOs

Fees: No fees

Spending Limits: Varies with different banks. If your bank or credit union does not use Zelle you are limited to sending $500 and receiving $5000 per week.

Visit Website

Learn more

#3

Apple Pay/Apple Cash

Available On: Built into iOS Wallet app

Fees: No fees

Spending Limits: $10,000 for most users, may vary with your card issuer and transaction record.

Visit Website

Learn more

#4

Cash App

Available On: Web; Android; iOS

Fees: No fee for personal transfers funded by debit card; 3% fee for credit-card funded transfers; 1.5% fee for one-day withdrawal

Spending Limits: Unverified users: Send and receive up to $1,000 in any 30 day period. Verified: send up to $7,500 every 7 days, with no receipt limits

Visit Website

Learn more

#5

Google Pay

Available On: Web; Android; iOS

Fees: No fees for personal transfers; 1.5% to withdraw funds to a debit card

Spending Limits: Unverified users: $300 per payment. Verified: Up to $10,000 per payment and per week. 

Visit Website

Learn more

#6

Meta Messenger Pay

Available On: Available inside Messenger on desktop, Android and iOS apps

Fees: No fees

Spending Limits: Sending funds from Visa or MasterCard debit card: up to $10,000/transaction. Sending funds from PayPal: $3,000/transaction. 

Visit Website

Learn more

1. PayPal

One of the most popular alternatives to Venmo is its parent company’s signature service, PayPal. It’s not just a way to send money to friends and family members with PayPal accounts of their own. It’s also a popular checkout option for millions of online merchants.

Signing up for a PayPal account is free, and you can also request a debit card to access funds in your account. Once it’s set up and configured, PayPal is fairly simple and direct to use. It accepts multiple kinds of payment, including crypto and Venmo among other funding sources. What’s more, if you use PayPal to make a purchase that turns out to be fraudulent, PayPal can assist you in getting a refund.

Spending Limits

Verified users can send unlimited total amounts of money or up to a maximum of $60,000 in any single transaction. Unverified PayPal account holders are limited to $500 for withdrawals and $10,000 for payments. Users who don’t have a PayPal account are limited to $4,000 for one-time payments. Spending limits may vary depending on local laws in your country or state.

Fees

Recently announced changes to the PayPal fee schedule for goods and services took effect in late July 2022. Currently, the seller fee for goods and services is 2.99%; this amount comes out of the seller’s revenue and is not added to the total price for the purchasing user. Transfers to friends and family members are fee-free, but you can expect to pay a 1% fee for instant transfers to your bank or credit union account.

Privacy and Security

PayPal collects certain user data, including GPS location data and IP addresses. The company reserves the right to use user data for its own internal uses, as well as to share it with other entities owned by PayPal, such as Venmo. In 2021, it was disclosed that using Twitter’s Tip Jar feature through a personal PayPal account showed the recipient the account holder’s address.

2. Zelle

If you’re mainly interested in bank-to-bank transfers, Zele will be one of the leading alternatives to Venmo.

Zelle is a simple, straightforward way to transfer funds from one person to another. It works inside your bank’s website or app interface (although there’s also a mobile app for Android and iPhone mobile devices). Funds you receive from others go straight into your bank account. However, you won’t be able to use it for a purchase at a brick-and-mortar store. Despite the stripped-down functionality, it might be the perfect solution for peer-to-peer transfers.

Zelle is a bank-to-bank service owned by a consortium of major banks. Not all banks provide the service.

Spending Limits

Your sending limits are set by your bank, not Zelle, although generally, you’ll see those limits rise the more you use Zelle. If your bank or credit union does not yet offer Zelle, you can use the Zelle app but you will be limited to sending $500 and receiving $5000 in any given week.

Fees

Zelle doesn’t charge any fees to send or receive money, although it recommends checking with your bank, which might assess its own fees.

Privacy and Security

Zelle uses authentication and fraud monitoring, although it doesn’t require two-factor authorization for peer-to-peer transfers. However, according to one recent NY Times report, fraud involving Zelle is spreading and increasingly common. What’s more, your bank may or may not assist you if you find out you’ve been scammed using Zelle in connection with your bank account. Make sure to send money to and accept funds only from people you know.

3. Apple Pay/Apple Cash

If you’re fully committed to the Apple universe of smartphones, watches, and other devices, you might appreciate the appeal of Apple Cash as these tools integrate smoothly into the familiar interface, making paying for purchases and sending money to friends fairly fast and easy.

Apple Pay handles your retail and website purchases, while Apple Cash lets you send peer-to-peer payments using Messages on any enabled iOS device. Apple Cash for peer-to-peer transfers is available on the web and via iPhone/iOS app access, but only for U.S. residents so far.

Spending Limits

Users can receive or send payments as low as $1 and as high as $10,000 per message. There’s also a seven-day sending and receipt limit of $10,000. The maximum Apple Cash balance verified users can have on hand is $20,000.

Fees

Apple Cash charges no fees for sending funds to other individuals if you use a debit card. Since you can’t currently use credit cards to add money to your Apple Cash account, you won’t incur any additional credit card-related fees with the service.

Privacy and Security

Apple Cash uses NFC, a mobile-based technology that enables businesses to accept funds from customers quickly and easily, without having to hand over or manipulate physical cards. In addition, Apple uses Touch ID and FaceID in conjunction with anonymized digital tokens to protect your card and other sensitive data. A 2018 Consumer Reports study found that Apple Cash exceeded the performance and security of other peer-to-peer platforms, including Venmo.

4. Cash App

Cash App is a free mobile payment platform for peer-to-peer payments between friends. You can also use the Cash App debit card to make online and in-store purchases. One of the value-added features of Cash App allows you to purchase both stock and Bitcoin through your account. It also offers access to some tax preparation and filing tools.

Currently, Cash App is only available for US and UK users. If you need to make international transfers to other countries or in other currencies, PayPal is probably a better option.

Spending Limits

Unverified users can send and receive up to $1,000 in any 30-day period. Verified users can send up to $7,500 each week, with no limits on received funds.

Fees

As with other platforms, Cash App offers fee-free transfers if you use a debit card to fund the transfer. If you’re receiving funds, you’ll generally have access to the funds within three business days. However, if you use a credit card, you’ll be assessed a 3% fee. Choosing a quicker one-day turnaround will cost you 1.5% of the total.

Privacy and Security

Cash App combines encryption and fraud monitoring technology to keep your user data secure and private. Any detected fraud will lead the platform to cancel the suspect transaction. Single-use login codes are sent via text or email. You can also include an additional layer of protection by enabling a Security Lock setting, which requires you to re-enter your password for a completed transaction.

5. Google Pay

If you’re a fan of Google products, Google Pay is a good alternative to Venmo for peer-to-peer and business transactions, especially if you’re an Android user (although iPhone users can use it, too). One app handles all your payment needs. It’s easy to use and fairly streamlined, given the fact that it supports so many transaction types. You can also use the platform to receive business payments for services or goods if you run a small business or have a freelancing side gig.

Spending Limits

Verified Google Pay users can send up to $10,000 per transaction as well as in any given seven-day period. Unverified users are limited to $300 per payment. The maximum amount that you can hold in a Google Pay account is $25,000.

Fees

As with many of its competitors, Google Pay charges no fees to send money to other individuals. If you use a debit card for transfers, you’ll be assessed a 1.5% fee.

Privacy and Security

Google uses NFC technology to enable contactless transactions. Sensitive card data is protected by encryption, although further details on Google’s commitment to protecting your personal data are somewhat lacking. Unlike PayPal, Google Pay does not offer buyer protection, leaving each user to negotiate disputes with merchants on their own.

6. Meta Messenger

Meta, the company that owns Facebook, has fully embraced the metaverse. It’s also embraced digital payments, offering its own alternative to Venmo. Users of Meta Facebook’s Messenger app can send and receive money directly within the Messenger app itself. Formerly Facebook Pay, Meta Pay connects you financially through all of Meta’s platforms, including Instagram, WhatsApp, Facebook, and of course Messenger. You can use it to send money to individuals or businesses and to make charitable contributions.

It’s the same app and mostly the same experience that existed before, but with some new developments and more in the pipeline to make sending money to friends and businesses more frictionless and straightforward. For example, U.S. users can now split payments, send cash for birthdays, and use QR codes to both send and ask for money from others. In other countries, Meta is rolling out additional upgrades and features to address those countries’ specific needs.

Spending Limits

If you use a Visa or MasterCard debit card, Meta limits you to $10,000 per transaction and per 30-day period. Transactions funded by PayPal accounts are limited to $3,000.

Fees

Meta Pay assesses no fees for sending and receiving funds.

Privacy and Security

Meta encrypts your payment data and stores it securely. The company also states that it conducts routine monitoring to identify and root out fraud and unauthorized activity and proactively contacts users who might be affected. You can add an additional layer of security by creating a PIN or using your smartphone’s native biometric security tools, such as fingerprint and face ID.

Which of These Venmo Alternatives Is Right for You?

Digital payments are so well established that almost anyone will want a presence on at least one platform, possibly more. Venmo might be right for you, or one or more of these alternatives to Venmo.

Each of these platforms has advantages and disadvantages, and each is aimed at a specific type of user. You’ll need to assess your needs, review your options, and choose the best combination of platforms for you!

The post 6 Best Venmo Alternatives in 2024 appeared first on FinMasters.

What Is ChexSystems?

ChexSystems is a consumer reporting agency that collects information on your banking history. Similar to credit bureaus, they compile this information into a report and generate a score.

This information is then provided to banks, credit unions, and other financial institutions when you apply for a new account. A poor banking history (overdrafts, forced closures, etc.) will limit your account options.

Learn more: Heads up: If you’ve been meaning to understand the intricacies of the banking system, find out how banking works in our recent post that breaks it down clearly for you.

What Is on Your ChexSystems Report?

ChexSystems primarily gathers information on your account applications, openings, and closures. This can include negative information, such as:

• Overdrafts
• Frequent applications
• Bounced checks
• Involuntary account closure
• Suspected fraud/identity theft

The report does not include active account information or accounts in good standing that were voluntarily closed.

Why Do Banks & Credit Unions Use ChexSystems?

Just as a lender uses your credit reports to determine if you are creditworthy, banks and credit unions use your ChexSystems report to determine the risk of you overdrawing your account or writing bad checks.

When the information on your report is negative, banks and credit unions can withdraw account promotions (i.e., free $100 when you open an account), offer you a different account with higher fees, or outright reject your account application. However, there are banks that don’t use ChexSystems, offering an alternative for those with past banking issues.

Can You Fix Your ChexSystems Report?

If you have negative information reporting to ChexSystems, there are a few steps you can take to remedy this.

First, you’ll want to obtain a copy of your report and score. By law (Federal Credit Reporting Act), ChexSystems has to offer you at least one free copy of your report a year.

Next, you can dispute any inaccurate information resulting from fraud, mistaken identity, etc.

You can also pay off any outstanding charges that resulted from involuntary closures, bounced checks, etc. This won’t remove the negative information from your ChexSystems report, but the report will be updated to show the account has been paid off.

9 Banks That Don’t Use ChexSystems

Here are some major credit unions and banks that don’t use ChexSystems. Smaller local institutions are also good possibilities.

1. Capital One

Among the banks that don’t use ChexSystems, Capital One stands out by offering their no-fee 360 checking account. Instead, they will perform a soft pull of your credit and collect other personal information to determine your eligibility.

*You need to make a deposit within 60 days, or the account will be closed. 

Learn more: If you’re exploring credit card options, our post gives an honest review of the Capital One Secured Credit Card, aiding in your search.

2. Chase

While Chase offers three checking accounts, only the basic account, Secure Checking, is a no-ChexSystems account. This account comes with a monthly fee and access to Chase’s resources for credit monitoring, budgeting, and bill payment.

*fee waived on new accounts for first 2 months

Learn more: If managing your credit score effectively is on your agenda, one of our posts reviews the Chase Credit Journey platform, offering insights into its functionalities

3. Chime

Chime is among the banks that don’t use ChexSystems and offer second-chance bank accounts. Their no-monthly-fee checking account doesn’t require a credit check. Plus, the account comes with great savings tools like auto transfer and round-up.

4. Go2Bank

This 100% mobile bank is among the banks that don’t use ChexSystems, offering a checking account that only necessitates simple identity verification. The account comes with access to Go2Bank’s other great features, like a high-yield savings account and a no-credit-check secured credit card.

*Overdraft protection is optional

**waived with direct deposit of $5 or more

5. PNC

The Foundation Checking account offered by PNC is advertised as a solution for those working towards better finances. Unlike its other checking account offerings, this account does not use ChexSystems.

*waived if you are a PNC employee or 62+

6. Sofi

When you’re searching for banks that don’t use ChexSystems, consider opening a Sofi checking account. Not only do you automatically receive a savings account, but there’s also no ChexSystems inquiry for either.

The accounts have zero fees, and you start building your savings from day one.

7. US Bank

The checkless Safe Debit account offered by US Bank is designed for teens but also works as a second chance account. There is no ChexSystems pull.

US Bank pulls ChexSystems on its Smartly Checking, but they are reported as lenient with bad reports. So, you may qualify for this account as well.

8. Varo Bank

This 100% online bank offers some unique features, including a high-yield savings account, a credit builder card, cash advance features, and more. All these come with quick sign-up and no inquiry on your credit or ChexSystems. Varo Bank is one of the few banks that don’t use ChexSystems and also doesn’t charge a monthly fee.

9. Wells Fargo

Wells Fargo is among the banks that don’t use ChexSystems for certain account types. While they offer four different checking accounts, only the Clear Access Banking account abstains from using ChexSystems. Advertised as a great option for teens and young adults, it is also an excellent 2nd chance checking account.

*waived if you are younger than 24 or have a linked campus card

6 Credit Unions That Don’t Use ChexSystems

1. American Airlines Federal Credit Union

Membership at American Airlines Federal Credit Union is open to many airport employees, including American Airlines employees, TSA employees, family members of employees, etc.

The Ascend Checking account they offer is the only one without a ChexSystems inquiry. The account is checkless.

*waived with a direct deposit of $250 or more

2. Consumers Credit Union

This open-to-the-public credit union offers a Rewards Checking account with great features and no ChexSystems pull. Opening an account will require becoming a member, but the membership fee is reimbursable.

There are mixed reports on Consumers Credit Union pulling from ChexSystems, but they do not seem to use it for decision-making.

*based on account activity. APY starts as low as 0.01%.

3. PenFed Credit Union

Free Checking offered by PenFed is just that, a zero-fee checking account. Membership at PenFed is open to anyone, plus there is no fee to join. There is no ChexSystems check, and you get 50 free checks when you open the account.

4. Premier America Credit Union

Premier America Credit Union offers a 2nd chance checking account called Fresh Start Checking that does not pull from ChexSystems. Membership at the credit union is primarily for those located in Los Angeles, CA, or Houston, TX, but is open to everyone through membership to TOArts.

*if you don’t meet location requirements, you must join the credit union by donating to TOArts.

**fee is $10 if you have a direct deposit of $200 or more

5. Navy Federal Credit Union

If you are a current or former military or the family of a military member, then you are eligible to become a member of the Navy Federal Credit Union. This credit union does not use ChexSystems for any of its checking accounts, so if you are a member, you’ll qualify for most accounts.

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Navy Federal may do a soft pull of your credit (usually TransUnion) when you apply for membership.

*$10 on Flagship checking if you don’t meet the required balance

6. Unify Financial Credit Union

The Right Start checking account offered by Unify doesn’t require a ChexSystems pull. The downside is that you can only open this account in person. Unify’s other accounts can be opened online and may or may not require a pull.

Membership at this credit union is open to anyone and free through Freinds of Hobbs.

Learn more: In case you’re exploring more inclusive banking options, our post highlights the top credit unions that anyone can join, simplifying your search.

Other Options for Avoiding ChexSystems

There are banks that don’t use ChexSystems, and even if you have a less-than-stellar ChexSystems report, you can still qualify for a new checking account. You still don’t want to just start applying for any and every checking account out there, as this could negatively impact your ChexSystems report and score.

It’s better to do some research, identify an account you’ll qualify for, and apply for that one.

In addition to exploring the options we listed above, try looking for accounts labeled “second chance or “fresh start”. Also, accounts that don’t come with checks/check-writing are more likely not to use ChexSystems.

You can also look into local banks and credit unions. These smaller institutions might not use ChexSystems and could be more willing to look past a bad report.

The post 15 Banks That Don’t Use ChexSystems (And Credit Unions) appeared first on FinMasters.

In this article, we’ll take a look at 6 credit unions with membership criteria that anyone can meet, and we’ll explore their best products and services.

Credit Unions That Anyone Can Join

In this article, we’ll look at 6 credit unions that all offer membership nationwide to anyone. Each offers basic banking services with minor differences in the products and rates offered. 

We’ll explore the pros and cons of each of the credit unions on this list, and we’ll summarize their account offerings and terms. 

1. Connexus Credit Union

Best for student loans & credit cards

Connexus is a credit union based in the midwest, with over 445,000 members. 

Membership is open to anyone in the U.S., even though their physical branches are limited to 3 states: Wisconsin, Minnesota, and Illinois.

Members outside of this geographical area can access their accounts via ATMs or credit union locations in the CO-OP or MoneyPass network.

This credit union offers a variety of personal account options, including checking and savings accounts, retirement accounts, loans, and more.

The two areas where Connexus excels are student loans and credit cards. They offer 10 credit cards (6 personal and 4 business). They also have a partnership with ISL Education Lending to offer a wide variety of student loans and refinancing plans.  

Connexus Credit Union Pros & Cons

Accounts & Fees

Membership at Connexus is open to anyone with a $5 donation to the Connexus Association. 

Or you can qualify for free membership if you are a local resident, are a family member of an existing member, or have an association with one of their partner organizations. 

You will need to open a savings account and deposit a minimum of $5 to activate your membership. 

Available Accounts & Associated Fees

Rates are current as of 07/2023

In addition to the above accounts, Connexus offers specialized checking and savings accounts for teens as well as a holiday savings account. And they offer a basic IRA savings account and a health savings account (HSA).

They also offer a variety of loans, including 

• Auto loans & refinancing
• Mortgages
• Personal loans
• Personal lines of credit
• Student loans and refinancing
• RV loans

One fee to be aware of is Connexus’s $5 inactivity fee. If your account remains inactive for 12 months or more, you’ll be charged this fee.

2. Alliant Credit Union

Best for online banking

Alliant is a unique credit union: they are 100% digital. There are no physical branches. Instead, they have their own network of 80,000+ ATMs that you can use with zero fees. 

Founded as the United Airlines Employees credit union back in 1935, membership has been opened to everyone. 

Membership is free if you are employed by one of their partner organizations, if you live in the Chicago area, or if you are a family member of an existing member. If none of these apply, you can join Alliant by becoming a member of Foster Care to Success, which will make you eligible for Alliant membership. Alliant will pay the one-time $5 membership fee to FC2S on the member’s behalf.

You can set up a membership, purchase insurance, open accounts, and apply for loans all via their online banking platform or mobile app. 

Alliant Credit Union Pros & Cons

Accounts & Fees

Aside from the required enrollment to FC2S, you will need to open either a checking account or savings account. Most credit unions require a savings account. 

In addition, you’ll need to maintain a $5 minimum balance in your account. Still, Alliant will help you out by gifting you a $5 deposit. 

Available Accounts & Associated Fees

*Alliant gifts you $5 when you open the account.
Rates are current as of 07/2023

Traditional Individual Retirement Accounts (IRAs) are also available.

In addition to their banking and investment accounts, Alliant also offers a variety of loans with reasonable APRs, including

• Mortgages
• Home equity line of credit
• Auto loans
• RV loans
• Personal loans
• Commercial real estate loans

They also offer home, auto, and life insurance plans as well as two credit cards, one with a 12-month 0% introductory offer and the other with cashback earnings of up to 2.5%. 

All of these accounts can be set up and managed online or via their mobile app.

3. Consumers Credit Union

Best for business accounts

Consumers Credit Union is a Chicago-based financial institution with 17 branches located around the Chicago area. 

To support customers outside this limited geographical area, Consumers has joined the CO-OP Network, which offers over 30,000 free ATMs. 

Membership is open to anyone that joins the Consumers Cooperative Association. 

Consumer Pros & Cons

Accounts & Fees

Membership in Consumers Credit Union is open to anyone. All that is required is a one-time $5 donation to the Consumers Cooperative Association. 

Available Accounts & Associated Fees

*These are the minimum requirements for 3% APY. For higher rates, you’ll need a Consumer Visa credit card. 
Rates are current as of 07/2023

In addition to the accounts listed above, Consumer offers investment accounts, education accounts, holiday savings accounts, and more.

They also offer a variety of loans, credit cards, and other products. In particular, they have a wide range of business products, including:

• 4 checking account types
• Business savings
• Business money market accounts
• Commercial mortgages
• Secured lines of credit
• Equipment financing
• 2 business credit cards
• Additional business services

Consumers Credit Union offers a variety of banking products and services to their members, but the area where Consumers really stands out is their business offerings. They offer a variety of accounts, loans, and services dedicated to businesses and business owners.

4. First Tech Federal Credit Union

Best for insurance & credit building

First Tech Federal Credit Union was founded in 1952 by employees at Hewlett-Packard. It has since opened up membership to anyone. However, those who work for certain tech companies are still offered banking services for free. 

Originally based in Oregon and California, Frist Tech now has 30+ locations scattered throughout the US. They have also partnered with the CO-OP network to offer free ATM and branch services nationwide at more than 30,000 locations. 

While First Tech offers a variety of products and services, there are two areas in particular in which they excel: insurance offerings and credit-building accounts. 

First Tech Pros & Cons

Accounts & Fees

Membership for First Tech is open to anyone. If you have a family member who is a member, you work/live in Lane County, Oregon, or you work for one of their partner companies, your membership is free. 

If none of the above apply, you can still become a member if you belong to the Computer History Museum ($15 membership fee) or the Financial Fitness Association ($8 membership fee).

Available Accounts & Associated Fees

Rates are current as of 07/2023

In addition to the accounts listed above, First Tech also offers accounts dedicated to children/teens, IRAs, and business checking and savings accounts. 

On the loan front, Frist Tech offers various products that can help members with bad credit get financing, consolidate debt, and improve their credit. Such accounts include

• A secured credit card
• A low-APR balance transfer credit card
• Secured loans & lines of credit
• Student loan refinance
• Mortgage refinance
• Auto loan refinance

Additionally; First Tech offers a wide range of insurance; from car insurance and life insurance to pet insurance and earthquake insurance. They also have many types of business insurance. 

5. PenFed Credit Union

Best for mortgage financing & resources

PenFed, also known as Pentagon Federal, was originally established to serve government workers and members of the military. PenFed has now opened its doors to everyone. There is no membership fee or donation required!

All you need to do is apply and open a savings account with a minimum $5 deposit. 

While many of PenFed’s original locations served the DC area, they have since spread across the nation with more than 40 branch locations. To assist those who do not live/work near a branch, they are also members of the Allpoint network with over 55,000 free ATMs. 

PenFed offers the usual menu of banking accounts and loan accounts, but the one area where they excel is their mortgage resources. 

They offer a range of mortgage types from conventional to ARM and even a special PowerBuyer loan. They also offer home loan refinancing options, lender credit (up to $2,500), and home-buying education resources. 

PenFed Pros & Cons

Accounts & Fees

Membership for PedFed is now open to anyone and is 100% free.

Available Accounts & Associated Fees

Rates current as of 07/2023

PenFed also offers several credit cards as well as personal loans, auto loans, and student loans. They do not offer business loans.

There are also many mortgage options offered through PenFed. They offer FHA loans, VA loans, conventional loans, ARM loans, jumbo loans, and a special PowerBuyer loan which is geared toward those purchasing a home in a hot housing market. 

Additionally, there are multiple home loan refinance options available. 

And, when you obtain a mortgage loan from PenFed, you’ll be rewarded with a lender credit. That credit can be up to $2,500, depending on the purchase price of your home. A lender credit will reduce your closing costs but could give you a higher interest rate. Be sure to check the impact on your rate before accepting a lender credit.

6. Liberty Federal Credit Union

Best for rate transparency and specialized mortgages

Liberty Federal Credit Union, Liberty FCU for short, is an Indiana-based credit union. 

You don’t have to be a teacher to join, though. Membership is open to anyone willing to make a $5 donation to their partner alumni association fund. 

Liberty FCU has physical branches spread across Indiana, Kentucky, and Tennesee. To support their customers nationwide, they have also joined the Alliance One network, which boasts nearly 5,000 ATMs.  

Liberty FCU offers the usual range of services, but they go a step above in disclosing their rates for banking accounts and loans. 

They also offer some pretty unique home financing options. 

This includes home types that other lenders may deny, such as manufactured homes, and dedicated loans for certain occupations.

ETFCU Pros & Cons

Accounts & Fees

Membership at Liberty FCU is open to anyone. Those who work for a qualifying organization or have a family member who has membership will receive their membership at Liberty FCU for free. 

Those who aren’t immediately eligible can join with a $5 donation to the Mater Dei Freinds & Alumni Association.  

Available Accounts & Associated Fees

Rates current as of 07/2023

Liberty FCU also offers a variety of loans, credit cards, and business accounts. In addition, they have a partnership with CUNA Brokerage Services to offer a variety of investment services. 

Liberty FCU also offers some highly specialized mortgages. In addition to common mortgage types, like conventional and FHA, Liberty FCU issues loans for the following

• Pole barn homes
• Manufactured homes
• Fannie Mae Home Ready
• Renovations
• Community Hero – nurses, first responders, teachers, etc.
• Condo loan
• Freddie Mac Home Possible
• Bridge loan
• USDA Rural Housing 
• Lot purchases
• Physicians – MD, DO, DDS, DMD, OD, DP, or DPM
• Construction 

Many of their home loan products also come with gift cards of up to $500 at closing.

What to Know When Shopping for a Credit Union

Credit unions can offer the same variety of services that a traditional bank can, and the customer service you are likely to receive will be far superior. Many traditional banks still offer a much wider range of products and services, and if your banking needs are complex a traditional bank may be a better option.

Read our detailed overview of the main differences between a bank and a credit union to find out more.

Sure, credit unions require membership, but the potential dividend earnings and interest rate savings outweigh the initial cost. 

That said, if you decide you want to open an account with a credit union, look closely at all of the features they offer. After all, you don’t want to get stuck with a credit union that doesn’t offer all of the services you need or has account requirements that you cannot meet. 

There are a few things to keep in mind when shopping around for the perfect credit union. 

Size – Does the credit union have locations in your area? If not, do they work with an ATM network? 

Insurance – The National Credit Union Administration (NCUA) offers insurance up to $250,000 per customer account for Federal credit unions. But not all credit unions use this insurance. Some credit unions use state or private insurance instead. 

Account Requirements Versus Earnings – For instance, a checking account may have a high APY rate, which means little if you can’t meet the minimum balance and transaction requirements. 

Account types available – Does the credit union offer all of the banking and borrowing services you need? If they don’t, you could find yourself with accounts scattered across many financial institutions. 

The post 6 Best Credit Unions That Anyone Can Join appeared first on FinMasters.

Electronic transactions dominate our digital age, but paper checks are still necessary in certain situations. If you aren’t familiar with checks, this guide will help you avoid mistakes.

How to Write a Check

Recording your checks in the register — also known as balancing your checkbook — used to be a key personal finance activity that helped you stick to your household budget and avoid overdrafts. But if you only write an occasional check, it might not be worth the time and effort, as the transaction will be recorded in your online banking account.

Other Parts of a Check

In addition to the above items, you’ll usually see a few more things printed on your checks.

• Your name and address. This information is pre-printed in the top left corner to state the person or business the check comes from.
• Your bank’s name and address. Your bank’s contact information is usually printed on the check. That way, if there’s a problem with the check, the recipient knows who to call. In most cases, this is the location of the issuing bank’s main office — not your local branch.
• The check number. Each check has its own identifying number. This appears both in the upper right corner and after the account number in the lower right corner. You are not required to use checks in sequential order, and you can order them starting with any number you like.
• The routing number. Each bank has a unique nine-digit routing number, which identifies the institution the funds are coming from. It’s printed on the bottom left of the check.
• The checking account number. This is printed after the routing number, telling the bank which specific account to pull the check funds from.

Avoid Fraud With These Check Writing Tips

Since checks lack the security features of currency and credit card transactions, it’s relatively easy for a criminal to do some serious damage to your bank account.

Here are a few tips to make your checks less likely to be targeted by fraudsters.

Tip #1: Always use a blue or black pen. Checks written in pencil can be erased and altered by the recipient. Blue and black ink show up well on bank scanners. By using blue ink, you can easily tell if a check is an original or a black-and-white photocopy.

Tip #2: Don’t sign blank checks. Your signature makes the check legal. If you don’t fill out the recipient or payment amount, anyone could write their name as the payee and make the check out for a million dollars or more. If you have enough money in the account to cover the check, it will go through.

Tip #3: Don’t make checks payable to “cash.” If you write “cash” instead of the name of the person who is the payee, anyone in possession of your check can cash it. If the check gets lost or stolen, you’re out of luck.

Tip #4: Leave no empty space in the amount box — either between the dollar sign and the first number or before the decimal. An easy way to alter a check is to just add a digit in the amount box somewhere (making $10 into $100, for instance). You can prevent this by aligning the numbers at the left of the box and drawing a line after the amount to fill the remainder of the box.

Tip #5: Always “void” mistakes or unused checks. If you mess up on a check, don’t just throw it away; if someone finds it in the trash, they could finish writing the check and cash it. Write “void” in large letters over the check to prevent anyone from using it in the future.

Alternatives to Paper Checks

Because of the risk of fraud, you may want to avoid writing a check if you can. For transactions that aren’t suited to credit cards or cash, you can use one of the alternate payment means below.

• ACH payments: Automated clearing house payments (also known as direct payments or direct deposits) go straight from one financial institution to another without the need for checks or cards. Most online bill payments — such as when you pay your credit card from your bank account — are ACH transactions.
• Wire payments: You can pay money upfront to a bank or transfer provider such as Western Union, and for a fee, they will transfer the money to the recipient’s bank account.
• Peer-to-peer payments: You can use mobile apps like PayPal, Venmo or Cash App to send money to people for free (as long as they also have the same app). These apps usually link to your checking account, but you may also be able to pay through them using a debit or credit card.
• Online bill pay: This feature is often offered with checking accounts, allowing the owner to send online payments automatically without having to write and mail a check.

All of these are secure paper-free ways to make payments that you might otherwise make by check.

How to Fill Out a Check FAQs

The post How to Write a Check: Step-by-Step Instructions & Examples appeared first on FinMasters.

We’ll also examine customer experiences and WebBank’s approach to credit, providing a comprehensive overview of its ability to meet various financial needs.

Who Is WebBank?

WebBank was founded in the State of Utah in 1997 under an industrial state bank charter. They are FDIC insured, which means they must comply with federal banking laws, and your deposits are Federally insured up to $250,000.

WebBank Corporate Financial, not to be confused with Webank China, has an A rating with the Better Business Bureau (BBB).

They are actively involved in many professional organizations, including:

• American Fintech Council
• American Bankers Association (ABA)
• Commercial Finance Association (CFA)
• Economic Development Corporation of Utah
• Utah Bankers Association (UBA)
• Utah Association of CPAs
• and many others.

In 2011, the board of directors promoted Jason Lloyd to President after serving as their Executive Vice President for three years. According to the leadership team section on their website, Mr. Lloyd has over 25 years of banking and financial services industry experience with companies such as CIT Group (CIT Bank) and Mitsubishi Corporation.

What Does WebBank Do?

WebBank offers alternative and traditional loans through its branded partners. In addition, they do work directly with customers and offer savings accounts and certificates of deposit at competitive rates.

While many of the loans underlying the products are traditional revolving or installment types, the products and the way they are offered vary with the partners offering the loans.

WebBank’s credit requirements are much lower than most lenders, making them a top choice for people with no credit, limited credit, or bad credit.

Here is a list of some of the personal financial products WebBank offers through its branded partners:

• Personal loans
• Credit cards (traditional, secured, crypto rewards and more)
• Auto repair loans
• HSA advances
• Merchandise financing through alternative loans
• Auto refinance loans
• Home improvement loans

WebBank works with a number of partners to offer business solutions like:

• Small business loans
• Working capital loans
• Business credit cards

What Companies Use WebBank

Here is the list of the most prominent WebBank partners and descriptions of products they offer that are issued by WebBank.

Avant Credit Card & Personal Loans

WebBank partners with Avant to provide two financial products to their customers.

The first product offered is the Avant WebBank personal loan, which you can use for major purchases, debt consolidation, or other needs. There is no prepayment penalty.

The second product offered through Avant is the AvantCard, a traditional credit card that does not affect your credit score when you apply.

Can Capital

Can Capital provides working capital loans to small businesses with WebBank financing the loans.

Can Capital has an A+ BBB rating with over 20+ years of experience, 8 billion dollars in funds lent, and 190,000 businesses served.

You can borrow between $2,500 and $250,000. If you’re approved the funds can be deposited by the next business day.​​

Dell Financial Services

Dell Financial Services provides consumers with integrated computing technology and services.

They offer their consumers a Dell Preferred Account Credit Card with no annual fees.

In addition, they have partnered to offer the WebBank Dell Business Card for small to medium businesses.

When applying for a Dell Preferred Account you may see one of the following entries appear on your credit report, ‘DFS/WebBank,’ ‘WebBank/DFS,’ ‘DFS WebBank’, or ‘WebBank DFS.’

The ‘DFS’ stands for ‘Dell Financial Services’ and should only be alarming IF YOU DID NOT APPLY for a WebBank DFS credit card.

DigniFi

DigniFi, formerly known as CFS Financial, offers its consumers auto repair loans with the help of WebBank.

Customers can borrow between $350 and $7,500. Loans are interest-free if paid off in the first 90 days.

If you don’t have the money to repair your automobile, DigniFi can get you back on the road fast.

Fingerhut

Fingerhut provides the Fingerhut Advantage Credit Account and the Fingerhut FreshStart installment loan.

These products are usually issued to people with no credit, limited credit, or bad credit and can be used to finance purchases from Fingerhut’s online catalog.

The Fingerhut advantage credit account is a revolving loan that allows customers to access their credit for online Fingerhut catalog purchases.

Because of the relationship between WebBank Fingerhut, they can offer credit to many people who usually would not qualify.

People with bad credit or lower credit scores (below 550) can usually qualify for the Fingerhut Fresh Start Installment Loan.

Fingerhut Warning: A Fingerhut account can help you build credit, but the products you buy may be much more expensive than they would be at other suppliers. Compare prices and decide whether it’s worth it.

This program is extremely inexpensive, with a total of six months of payments for under $5.00 a month offered through Fingerhut.

At the end of the FreshStart program, the customer will then be eligible for a Fingerhut credit account.

Having credit with Fingerhut is like having a Fingerhut credit card without a physical card.

Klarna

Klarna offers an alternative shopping experience to their customers with their, ‘Shop now. Pay later.’ motto. They are one of the leaders of the buy now pay later industry.

They have partnered with your favorite stores to bring you this unique experience.

You shop at their merchants’ stores and use your Klarna Card to pay for the merchandise which is then conveniently billed to you in four bi-weekly installments.

Klarna also offers Klarna Financing which lets you spread the cost of your purchase for up to 24 months.

Mosaic

WebBank has partnered with Mosaic to offer financing for solar energy systems, batteries, and other home improvements that increase energy efficiency.

Mosaic works with contractors to offer financing to the contractor’s clients and with homeowners to finance the purchase of environmentally sound home improvements.

PayPal

PayPal, one of the world’s largest transaction facilitators, offers its business customers loan options with WebBank.

Together they offer three business WebBank loan options; PayPal Working Capital Loans​, PayPal Business Loans for Small Businesses, and Loan Builder loans.

They offer business loans from $5,000 to $250,000 with approval in minutes and next-day funding options.

Petal

Petal Card offers a traditional revolving loan credit card with no annual fees to its customers. What makes Petal different is that they evaluate your creditworthiness based on your banking history, not your credit score. This makes Petal one of the top unsecured credit cards for people with bad credit.

WebBank provides financing for the Petal credit card through their Brand Partnership program.

Petal offers its consumers a unique cash-back rewards program that grows with the number of on-time payments you make.

Prosper

Prosper offers consumers the option of a fixed rate or unsecured personal loan through WebBank.

They recently started offering home equity lines of credit (HELOC) and home equity loans in a limited number of states.

Proper loans have no prepayment penalty.

Yamaha Motor Finance

Yamaha Motor Corporation has been producing world-class motorcycles and other products for decades.

They have partnered with WebBank to provide their consumers with a Yamaha open-ended revolving credit card for the purchase of their products nationwide.

The Yamaha card application is straightforward, and you get a decision almost instantly.

Other WebBank patterns include:

• Oportun, Inc. – Oportun^® Visa^® Credit Card
• Lane Health – Health Savings Account (“HSA”) Advance
• iCreditWorks – Loans for financing dental care procedures
• Gemini – Crypto rewards credit card
• Cleo – Cleo Credit Builder Card
• OneMain Financial – OneMain Financial Brightway credit card
• Capital on Tap – Business credit card
• Libertas Funding – Small business loans
• Shopify – Shopify Capital
• Toast – Small business loans

WebBank Credit Cards

WebBank credit cards are offered exclusively through their brand partners. All cards are issued with their branding partner’s name and custom design, with WebBank underwriting the loan and deciding on credit approval.

Here’s the list of WebBank credit cards as of July 2023:

1. AvantCard Mastercard^®
2. Cleo Credit Builder Card
3. Gemini Credit Card
4. Klarna Card
5. OneMain Financial Brightway℠
6. Oportun^® Visa^® Credit Card
7. Petal Visa^® Credit Card

WebBank also offers four revolving loan credit accounts that can only be used to purchase products from each store’s product catalog. In most instances, there aren’t physical cards for store credit accounts.

These are the three store credit accounts.

• Dell Preferred Account
• Fingerhut Credit Account
• Yamaha Credit Account

Check out one of these merchants whether you are looking for credit card offers or a credit account.

Customer Reviews

WebBank issues many different types of loans for a large number of brand partners. Many people appear to be confused about who they need to speak to when there is a problem with their loan.

There are over 200 complaints against WebBank on their BBB website, but almost every one of them should have been directed toward their brand partners.

There are also many favorable reviews for companies such as Fingerhut and PayPal that should probably be attributed to the brand partner and not the bank.

However, many people forget that they do directly work with customers and offer savings accounts and certificates of deposit at competitive rates.

WebBank reviews for these services tend to generally be very positive and favorable for their customer service and high interest rates offered.

FAQs:

The post WebBank Review 2023: Credit Cards, Personal & Business Loans appeared first on FinMasters.

There are other ways to improve your ChexSystems report and score, such as disputing information and settling chargeoffs.

In this article, we’ll explore what ChexSystems is, how to clear your ChexSystems report, and what steps to take if you absolutely need to open a new account now.

What Is ChexSystems?

ChexSystems is a consumer reporting agency that collects information on your banking history.

While ChexSystems is not a credit bureau like Experian or TransUnion, the information they store can be used to make credit decisions. When a bank or lender pulls from ChexSystems, they receive the information from your report and your ChexSystems Consumer Score.

This information can be used to determine the risk you pose to a bank. The better your ChexSystems report and score, the less risk you pose.

What Information Does ChexSystems Collect?

ChexSystems collects various information related to banking history, primarily the opening and closing of bank accounts.

• Involuntarily closed accounts, which can be the result of chargeoffs or suspected fraud.
• Inquiries – both hard inquiries (when you apply for new accounts) and soft inquiries (that don’t affect your credit).
• Check activity – including returned (bounced) checks, check ordering, and inquiries related to check cashing.

ChexSystems does not collect information on your current checking/saving account balances nor store data on previously held accounts that were closed voluntarily (unless the account had suspicious activity before it was closed).

Who Uses Chexytems?

Nearly any bank, lender, or creditor can pull ChexSystems, but it is most often used by banks.

Banks pull this information when you apply for an account with them. Depending on the information and score they get back from a ChexSystems check, they can choose to deny your application or change the terms offered (i.e., remove a new account cashback promo).

Some lenders also use ChexSystems. This is most common with companies that offer debit cards that report like credit cards or cards advertised as having no credit check or minimum score. These companies often use alternative credit data, which can include pulling a ChexSystems report.

How to Check Your Report

As a consumer reporting agency, ChexSystems has to abide by the Fair Credit Reporting Act (FCRA).

This means you can obtain a copy of your report for free directly from ChexSystems once a year. You can also obtain a report if you have been hit with a negative action (i.e., denied a new checking account) because of information in your ChexSystems report.

To request a copy of your report, go to the ChexSystems Consumer Disclosure page and use the submit request tool. This tool gives you options for requesting a report online, by phone, or via mail.

You can also request your ChexSystems score through the Consumer Score page.

How to Clear Your ChexSystems Report

Unlike other credit bureaus that collect information on all of your credit activity, good or bad, the majority of the data that ChexSystems collects is negative data.

This means that the emptier your report, the better. But how do you clear your ChexSystems report?

Dispute The Information

If you’re wondering how to clear your ChexSystems report, especially when the negative items reflect fraud, mistaken identity, or other errors, initiating a dispute with ChexSystems is an effective first step.

To begin a dispute, use the ChexSystems Dispute page. Here, you can fill out your information, select the item you are disputing, and detail why the information is inaccurate. Depending on the reason for your dispute, you might need to attach documents to your dispute, such as:

• A death certificate
• Police report
• Account statements

According to ChexSystems, dispute investigations are usually completed within 30 days but can take longer.

If your dispute is denied, you may have the option of adding a statement to your ChexSystems report. With this 100-word max statement, you can describe your dispute issue. This statement will be visible to anyone who pulls your ChexSystems report.

Settle Charge-Offs

Another step you can take when thinking of how to clear your ChexSystems report is to settle charge-offs. If you have had a bank account involuntarily closed with a balance due remaining, this will appear as a charge-off on your ChexSystems report.

Charge-offs are not good for your ChexSystems score.

If the charge-off information is inaccurate, you can use the dispute process. Otherwise, your best option for score improvement is to settle the account.

Paying off the balance due will not result in the account being removed from your ChexSystems report. Instead, the account will be updated to show as paid in full or settled. If you pay off the account and your report is not updated, you can file a dispute.

You can try to negotiate with the financial institution to remove the account from your ChexSystems report after you pay off the balance, but they are under no legal obligation to do so.

Wait for Negative Items to Fall Off

The final strategy on how to clear your ChexSystems report is to simply wait for negative accounts and items to fall off your report. The time it takes for this to happen varies based on the type of item.

• 2 years – check cashing inquiries fall off
• 3 years – account inquiries fall off
• 5 years – closed account information falls off

If you have information that is getting ready to fall off soon, you might have better luck waiting a little while before opening a new account.

What to Do When You Have a Bad ChexSystems Report

If you have a less-than-stellar ChexSystems report, this can adversely affect your chances of successfully opening a new bank account or obtaining certain credit cards. But how can you clear your ChexSystem report when disputing, paying off accounts, or waiting are not options?

How to Open a Bank Account

If your ChexSystems report isn’t too terrible, you may be able to apply for some basic checking and/or savings accounts without issues. However, this may limit your access to certain promotions or APY rates.

Otherwise, you might want to consider looking for a second-chance account. These accounts are specifically designed for those who have a poor ChexSystems record. But beware, these accounts can come with hefty fees or limited features (i.e., no check writing).

Opening a second-chance account won’t necessarily improve your ChexSystems score, but they can offer you basic checking/saving services until your score improves enough to open a better account.

Facing issues with your #ChexSystems report? Learn how to clear it and smooth out your banking journey. #BankingTips

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Improve Your Credit

If your ChexSystems report is preventing you from opening a credit card account, then looking for different products that don’t use this option might be a good option. 

However, cards that don’t use ChexSystems may have higher credit requirements, so you’ll want to look at improving your credit score as needed.

You can do this in multiple ways, including:

• Opening credit builder loans
• Using services like Experian Boost
• Keeping your credit utilization low
• Using rent reporting services
• Opening a secured credit card

While your ChexSystems report is important, focusing on improving your credit report may be even more important for your long-term financial health.

FAQs

The post How to Clear Your ChexSystems Report: Essential Steps appeared first on FinMasters.

How to Switch Banks

The process doesn’t have to be complicated. Below we’ll walk through the 5 steps to take when you decide to make the switch. Following these steps can make the process as smooth as possible.

1. Pick Your New Bank

Once you’ve decided it’s time to switch banks, you’ll need to start looking for a new bank or credit union. But how do you start your search?

One good place to start is with the reason you want to change banks.

For instance, if your current bank charges high fees, you can look for low-fee or no-fee accounts. Or, maybe you’re tired of dealing with horrible customer service. In that case, looking through customer reviews might be a good move.

To help focus your search, try making a list of banking features most important to you. Here are just a few features you can consider.

• Fees
• Minimum balance requirements
• Online banking
• Banking app
• FDIC/NCUA protection
• ATM network
• Customer support availability
• Bank reputation
• Branch locations
• Promotions and interest rates
• Additional banking services (i.e., credit cards, home loans, etc.)

With your criteria set, you can narrow your search to only a few possibilities and then take time to evaluate these options before making a final decision.

2. Look at Your Banking History

Before making a final decision and opening a new account, consider taking a look at your current banking history. There are two main reasons to do this.

The main reason is to understand what you’ll need to transfer over when opening your new account. If it helps, make a list of all ACH deposits as well as all payments drafted from your account.

The other reason to look at your current banking history is to help narrow down your search for a new account. If, for instance, your bank balance dips very low during the average month, then you might want to avoid banks that require a minimum balance.

Looking through your history can also give you an idea of how often you use the ATM, how high your balance gets, how often you write checks, and other patterns that could affect your decisions.

3. Open and Fund Your New Account

Depending on the type of bank or credit union you choose, you may have the option of initiating this process in person or online. Regardless of which method you choose, the process is nearly identical.

You’ll need to start by providing your personal details (name, address, etc.) and verifying your identity (i.e., uploading a copy of your driver’s license). If you are opening an account at a credit union, you’ll also need to go through the membership step.

At this point, the financial institution can choose to research you. While this can be done through a formal credit check, reviewing the ChexSystems database is more common. This company gathers data points like how often you’ve overdrawn your account.

The final step in opening a new account is to fund it. This can be done via cash, check, or electronic transfer. You can also order checks and open additional accounts (i.e., savings) as needed.

How To Switch Banks

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4. Transfer Deposits and Payment to the New Account

Once the new account is fully set up, you’ll need to begin transferring over all direct deposits and automatic payments.

If you haven’t already, go through your old account and make a list of all automatic transactions. And don’t forget to consider periodic payments like quarterly subscriptions or annually-billed services.

When updating your banking information with your employer(s), creditors, utilities, etc., just be aware that changes can take up to a month or more to go into effect. Because of this, you’ll want to keep enough money in both your old and new accounts to cover any automatic payments.

Once you’ve taken care of all automatic payments, you may also want to update billing information for all other merchants or creditors. For example, you may need to add your new account to your credit card account and set it as the default for payments.

5. Close Your Old Account

With your new account open and all transactions being transferred, it is time to close your old account. However, you should wait to do this until you are confident that no deposits or payments are being processed through the old account.

Depending on your old institution, you may be able to quickly transfer any remaining funds and close out the account online. However, some banks/credit unions may require a phone call, online chat session, certified letter, or in-person appointment to close your account.

Be sure to get confirmation (proof) from your bank that the account is closed.

With the account now closed, you’ll want to cut up and shred any remaining debit cards and checks. But, even with the old account closed, you’ll want to closely monitor things for the next few months.

Alternatively, you can keep your old account open if it offers desirable benefits or features (i.e., a great savings account APY). You don’t have to keep all your accounts at one financial institution.

FAQs

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What to Look for in a Bank

Before you can decide how to choose a bank, it’s important to understand the essential features that you’re comparing. Banks offer a range of services and features. Not all of them may be important to you, but knowing which ones are important to you will help you make the best choice for you.

Some of the things you should look at when comparing accounts are:

• Minimum deposit/balance requirements – Some banks won’t let you open an account unless you can deposit at least $25, $50, or more. You might have to pay fees if your balance falls below that amount. Look for accounts with low minimums.
• Monthly fees – Many banks charge a monthly fee to keep your account open. You can usually avoid these fees by jumping through a few hoops, but it’s better to find an account that has no fees in the first place.
• ATM access – If you’re a frequent cash user, you’ll want to make sure your bank has a strong ATM network in your area. Bonus points if it offers reimbursements for ATM fees charged by other banks.
• Interest – Most savings accounts and even some checking accounts pay interest on your account balance. The higher the rate, the more you’ll earn.
• Online and mobile access – We do a lot of things online these days, and that includes banking. You want to make sure your bank account comes with an easy-to-use app and website.
• Variety of services – Checking and savings accounts are just a couple of the services that banks offer. Many also offer lending services, business tools, investing, and more. There’s a serious benefit to having all of your financial life in one place, so think about whether a bank can meet your other financial needs,
• Other perks – Some banks offer useful budgeting tools or other perks, like rewards on debit card purchases. If a bank offers perks that you’ll benefit from, that’s a good reason to consider opening an account.

There isn’t a hard and fast rule defining what banks you need and what type of bank is best for you. You’ll have to assess your personal needs and compare each institution holistically, considering all of these factors and focusing on the features that you most need.

Types of Banks

If you’re wondering how to choose a bank or considering moving to a new bank, there are a few types of institutions to consider.

Local banks

Pros: Familiar with the local area and needs, personalized service

Cons: Limited variety of services, worse apps and websites, smaller ATM networks

Best for: People with simple banking needs and who rarely travel

Local banks are smaller institutions that typically focus on a specific city, state, or region of the country. Because of their smaller size, they’re able to provide more personalized service to their customers. You might get to know the tellers at your local branch over time and they’ll get to know you.

This means that local banks may be willing to be more flexible, helping out customers who are on the cusp of qualifying for a loan or waiving fees here and there.

However, these banks are limited by their size. They may not offer the best online services and may not have all of the loan options or investing options you’re looking for. Their ATM and branch networks will also be limited to their service area, which can be a problem if you travel a lot.

National Banks

Pros: National branch and ATM network, standardized accounts, variety of financial services

Cons: Fees, impersonal service

Best for: People who can meet fee waiver requirements and who have typical financial situations

National banks, like Chase or Bank of America, operate all over the United States. They have massive networks of branches and ATMs, which means that you’ll never be far from somewhere that lets you access your bank account.

The drawback of that size is that you’re ultimately just another number in a spreadsheet. You won’t have much when it comes to forming a relationship with the bank. You’ll only have access to its standard accounts and other services, without much flexibility if you wind up in a pinch or an unusual situation.

If you’re just looking for a convenient bank that has locations everywhere, national banks are a solid choice, just don’t expect to get a helping hand when you need one.

Online Banks

Pros: Low fees and minimums, high interest rates, more perks, great online services

Cons: Fewer financial services, can make it hard to deal with cash

Best for: Tech-savvy consumers who don’t use cash frequently

Online banking has gained in popularity in recent years. According to Business Insider, more than 200 million Americans will use some form of digital banking services in 2022.

Online banks take digital banking to the extreme. They have no physical locations or branches, instead, operating purely over the internet. Customers never see a banker in person, doing all of their banking and borrowing from their computer or phone.

These institutions are a great choice for a specific group of people. They offer accounts with low or no fees or minimum balances and pay above-average interest rates. Many also offer ATM fee reimbursements so it’s easy to make withdrawals from anywhere.

However, few offer customers a way to deposit cash. Those that do usually rely on services like GreenDot, which can charge hefty fees. 

If you’re a digital native who rarely uses cash, online banks are great. People who prefer to work with physical currency might struggle to use these banks.

Credit Unions

Pros: Owned by their members, personalized service, low fees, and high rates

Cons: Very small footprints, may be slower than larger institutions, limited services

Best for: People who want personalized service or who have unusual financial situations

Credit unions operate much like banks. Customers can open checking or savings accounts and even get loans from credit unions. Despite their similarities, there is one key difference that sets the two apart.

Credit unions are owned by their members. Banks are owned by shareholders. That means that while banks operate for the benefit of people other than their customers, credit unions must operate in their customers’ best interests.

Every credit union must have eligibility criteria for potential members, such as living in a certain area or working for a specific employer. If you don’t meet those criteria, you won’t be able to open an account. There are some national credit unions that anyone can join: they have set up membership criteria that make them widely accessible, though there may not be a physical branch in your location.

Because credit unions work for the benefit of their members, they generally do a good job of providing personalized service. They’re also typically more willing to help people with unusual financial situations or who are facing hardships. That can mean waiving overdraft fees or approving loans for long-time customers who are on the cusp of having adequate credit.

The drawback is that credit unions are usually small, community-based institutions. It’s not unusual for a credit union just to have one or a few branches and a small ATM network, which can make withdrawals difficult. That’s fine if you stay in one location and you want personalized service. It may not be such a good thing if you travel regularly and have complex banking needs.

Explore the differences between a bank and a credit union so you can make the right choice for your situation: Bank vs. Credit Union

Can You Benefit From Using More Than One Type of Bank?

If you’re considering how to choose a bank, remember that you can choose more than one. Many consumers can benefit from having multiple bank accounts. There’s no rule stating that you can only open accounts at a single bank and that you must stay with that bank for life.

One common strategy that people use is to have a checking account with a physical institution, like a local or national bank, and a savings account with an online bank. You may even choose to have more than one account of each type.

You can use your checking account at the physical bank to handle cash transactions, depositing extra money whenever you have it on hand. At the same time, you can store your extra savings in an online savings account, earning a higher interest rate.

If you ever need to move money between the two banks, an online funds transfer takes just a few days.

This lets you get the best of both worlds: the high rates of online savings accounts plus the ability to deal with cash and the large branch and ATM network of a national bank chain.

Making Your Choice

Once you decide what type (or types) of bank you want to use, you’ll have to select a specific institution. You’ve narrowed down your options, now you have to look at the details.

Start by thinking about what account or accounts you want to open, and how you plan to use them. Knowing what you need is a key consideration in deciding how to choose a bank.

Assess a bank’s reputation, by word of mouth for local institutions, and online for national ones. Every bank will have some negative reviews – you can’t please everybody – but patterns of negative reviews may reveal issues.

If you’re looking at a local institution (most of us will keep at least one account at a physically accessible branch), there’s no substitute for paying a personal visit. Run through the list above under “what to look for in a bank”, and ask questions. You’ll get a sense of how the bank responds and how they treat customers

The Bottom Line

Each type of bank comes with pros and cons. For the best results, assess your specific needs carefully and consider opening accounts at several different institutions. You can combine their strengths by using each for the services that it provides most effectively.

Remember that there is no universal rule defining how to choose a bank or what is the “best bank”. Your job is to find the bank or combination of banks that best fits your needs. That can take some time and effort, but finding the right banks for your accounts can pay dividends in cost and convenience down the line!

The post The Essential Guide to Choosing the Right Bank for Your Needs appeared first on FinMasters.