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Online(-only) bank

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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Online(-only) Bank

An online(-only) bank is a financial institution that operates solely online, without any physical branches. It offers the same services as a traditional bank, such as checking and savings accounts, loans, and investments, but without the need to visit a physical location. Online(-only) banks are typically more cost-efficient than traditional banks, as they donโ€™t have the overhead costs associated with maintaining physical branches. They also offer higher interest rates on savings accounts and lower fees than traditional banks.

History of Online(-only) Banks

Online(-only) banks first emerged in the late 1990s, when the internet was becoming more widely used. The first online(-only) bank was established in the United Kingdom in 1999, and the first in the United States was established in 2000. Since then, the number of online(-only) banks has grown significantly, with many traditional banks also offering online banking services.

Comparison of Online(-only) Banks and Traditional Banks

Online(-only) Banks Traditional Banks
No physical branches Physical branches
Lower fees Higher fees
Higher interest rates on savings accounts Lower interest rates on savings accounts
24/7 customer service Limited customer service hours

Summary

Online(-only) banks are a type of financial institution that operates solely online, without any physical branches. They offer the same services as traditional banks, but with lower fees and higher interest rates on savings accounts. For more information about online(-only) banks, you can visit websites such as Bankrate.com and NerdWallet.com.

See Also

  • Savings Account
  • Checking Account
  • Investment Account
  • Loan
  • Credit Card
  • Debit Card
  • Online Banking
  • Mobile Banking
  • ATM
  • FDIC

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