Switching to virtual banking
Evolving technology is dramatically changing how people bank. A recent Consumer Reports survey of more than 74,000 subscribers found that almost 90 percent do some of their banking online. What’s more, one in 10 switched to virtual banks that exist primarily on the Web.
These virtual banks such as USAA Bank, Schwab Bank, EverBank, Discover Bank, and Ally Bank get high scores in a Consumer Reports’ survey of its subscribers. The survey showed that readers who used virtual banks were highly satisfied, the highest levels of satisfaction seen with any service Consumer Reports has rated. That contrasts sharply with readers who use the biggest banks. Chase, Wells Fargo, Citibank, and Bank of America get relatively poor scores for their fees and only average scores for customer service.
In general, virtual banks offer higher interest rates on savings. For instance, Discover Bank pays 0.95 percent, whereas Chase and Wells Fargo pay as little as 0.01 percent.
To get cash, customers can use a network of fee-free ATMs. If they use other banks’ ATMs, they are often reimbursed for the fees. And despite having almost no branches or tellers, all eight of the virtual banks in the Consumer Reports survey did well at communicating with their customers. Still, if you like having a personal relationship at your bank, virtual banking might not be for you.
Credit unions are another type of financial institution that did well in Consumer Reports’ survey. Credit unions get kudos for customer service and low fees. And credit unions also can offer more personal service.
Switching banks can be a bit complicated. We have advice on how to make the switch.
Complete Ratings and recommendations on all kinds of products, including appliances, cars & trucks, and electronic gear, are available on Consumer Reports’ website. Subscribe to ConsumerReports.org.