In today's digital-first world, online-only banking is becoming the norm for businesses. There are some advantages to using a traditional bank, but online financial platforms provide the convenience of managing finances on the go, 24/7.
Online business banking takes place entirely online.
You can open accounts, transfer money, and pay bills via your computer or mobile device.
Because there are no overhead costs associated with operating physical branches, online-only financial platforms typically offer lower fees. Online banks can also pay higher interest rates on deposits and offer more flexible loan terms.
Don’t confuse online banking with services offered by traditional banks. With online services at a local branch, you can still access your account through a computer or mobile device and withdraw money from an ATM or in person.
By contrast, an online-only bank won’t offer any in-person services, and some may charge fees if you want to access cash from an ATM or use a check.
Online services can be convenient and cost-effective for business owners, making monitoring expenses and paying bills on time easier.
It can also offer comprehensive services, such as:
Here are some of the major benefits of online vs traditional banking:
You can meet all your basic banking needs from home or while on the go with your smartphone.
You can access your accounts on a PC, laptop, or tablet with an internet connection.
You can review recent activity and balances so there are no surprises when bills come due.
An online platform allows you to send payments with Automated Clearing House (ACH) or wire transfers.
Online banks allow electronic check deposits (ECDs), eliminating the need to visit a local branch.
It also uses encryption, fraud detection software, and two-factor authentication to protect your accounts from unauthorized access.
Online banks are a good choice for businesses that need to move money quickly and protect data.
They also allow companies to integrate their accounts into other financial systems, making tracking expenses and managing cash flow easier. Here are some examples of businesses that could benefit from an online bank:
An online bank is ideal for companies already accustomed to using digital products or services to conduct daily operations.
SMBs and startups can also benefit from online banks, which offer low-cost checking and savings accounts, as well as other products, like lines of credit or merchant services.
Startup businesses may also appreciate the convenience of quickly opening a business account with minimal paperwork.
Freelancers who work from home will find online banking helpful since they won’t have to visit a physical branch to deposit checks or transfer money.
It’s also one of the best ways to manage multiple accounts and payment sources.
Similarly, businesses looking to cut costs should consider online banks, which typically offer lower fees and minimum balance requirements than traditional brick-and-mortar banks.
Maybe online banking doesn’t seem like the right fit for your business. That’s OK!
Traditional banks are still in use and offer digital options, giving you the best of both worlds.
Here are a few businesses that might want to use traditional systems:
If your business offers goods or services that customers must pay for in cash, then a traditional bank may be better for you.
Many online banks can’t accept cash payments due to the lack of physical branches and ATMs. You may use a third-party ATM to deposit or withdraw cash, but the fees associated with this may be higher than what you’d pay at a traditional bank.
Traditional banks offer more in-person services, such as face-to-face meetings with a banker or loan officer.
When comparing online banking vs traditional banking, it’s important to consider the following:
But if you’re having a tough time choosing between the two, why not take advantage of both? Even if having an account at a brick-and-mortar location makes sense for your business, you may also appreciate the agility of online banks.
If your business is comfortable with technology and values the convenience of online banking, Aion’s all-in-one platform could be the perfect solution. With Aion, you can access a range of services, like automatic payments and transfers, as well as real-time account balances — from the convenience of your smartphone or computer.
You'll also get access to integrated QuickBooks Online, robust finance tools, and 24/7 customer support. Sign up for free today for Aion’s all-in-one business finance platform.