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Online and mobile banking can make transactions faster, easier, and more secure. Indeed, the number of Americans who are going all in on managing their finances this way continues to grow. Recent research shows that about 30% of Americans use online-only banks.
Not only that, those who use any type of online banking, whether through a traditional or online-only bank, tend to use it frequently. In SoFi’s April 2024 Banking Survey, which looked at the banking usage of 500 U.S. adults, 48% of respondents said they use online banking daily, and another 26% reported using it several times a week.
Here, take a closer look at online banking, so you can decide if it’s right for you.
Key Points
• Online and mobile banking are becoming increasingly popular, with about 30% of Americans primarily using online-only banks.
• Common online banking features used include checking balances, transferring funds, depositing checks via mobile device, and using automatic bill pay.
• Some online banks may offer higher interest rates and lower fees compared to traditional banks.
• Online banks provide the convenience of banking from just about anywhere, but they lack in-person assistance and may have more limited ATM access in certain areas.
• Any traditional and online bank that is insured by the FDIC guarantees the same amount of protection in the highly unlikely case of a bank failing.
Online Banks vs Traditional Banks: What’s the Difference?
Online banking, most generally, refers to the ability to conduct transactions through a financial institution’s web page or app, making it unnecessary to go to a branch. Most banks today offer some form of online banking, and most members, in turn, are accustomed to having that option.
For instance, 63% of respondents in SoFi’s survey said they frequently use online banking to transfer funds between accounts, and 43% said they frequently do mobile check deposits.
|
Frequent Uses of Online Banking | |
|---|---|
| Check account balances | 77% |
| Transfer funds | 63% |
| Mobile check deposit | 43% |
| Automatic bill payment | 40% |
| View or download account statements | 38% |
| Chat online with customer service | 17% |
Source: SoFi’s April 2024 Banking Survey of 500 U.S. adults
Often, however, the term “online banking” is used to refer to online-only banking vs. traditional banking, meaning you manage your personal finances completely online.
Since online banks typically have no physical locations and therefore lower overhead, they can often offer consumers a higher annual percentage yield (APY) on deposit accounts and other perks.
Recommended: APY vs Interest Rate: What’s the Difference?
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How to Get Started With Online Banking
If you are interested in getting started with online banking, it’s a good first move to compare features and terms at different online banks. Then, you can typically apply online, and the process can take just minutes. It’s wise to have your materials (such as Social Security number and government-issued photo ID) at hand. It may take one to two weeks, however, for your documents and debit card to arrive.
Once your account is up and running, you can begin receiving direct deposits, making transfers, setting up bill pay, and accessing the other features that make online banking so convenient.
What Are the Main Benefits of Online Banking?
To better understand online-only banking, consider these upsides and online banking features:
Higher Interest Rates and Lower Fees
As mentioned, online-only banks tend to offer a higher interest rate on savings accounts and possibly checking accounts, too. As of mid-December 2025, the national interest rate on savings accounts is 0.39%, according to the FDIC. At some online-only banks, however, you can find an APY of around 3.00% or higher on their high-yield savings account vaults.
In addition, these banks may offer lower or no fees. Stashing your cash in one of these banks can be a way to avoid bank fees, such as account maintenance charges and the like.
Bank From Anywhere, Anytime
Online banks are open 24 hours a day, 7 days a week, which means you can take care of transactions after normal bank hours. You can manage your money whenever and wherever.
Widespread ATM Network Access
Most online banks are part of an online network of ATMs, such as MoneyPass or Allpoint. What’s more, these are generally fee-free ATMs. If the financial institution doesn’t partner with an ATM network, they will typically offer to refund ATM fees up to a certain number of withdrawals.
Seamless Digital Tools and Mobile Features
As digital innovators, online-only banks may provide a better user experience when online or in the app. Expect to get the latest tools and access to a wealth of features such as round-up savings programs or a dashboard that helps you track your earnings, spending, and savings.
What Are the Potential Downsides of Online Banking
There are, however, some potential downsides to managing money this way. Consider these potential issues with online banking:
The Lack of Physical Bank Branches
Online banks don’t have physical branches where you can deposit funds or meet face-to-face with a banker to set up accounts, apply for loans, or get a document notarized. If you are a person who wants and appreciates physical locations and this kind of personal connection, you may not be well-suited to digital banking.
Challenges With Complex Services and Cash Deposits
There may be some services that you aren’t able to enjoy with an online-only bank. It may or may not offer credit cards, car loans, and mortgages; you may not be able to deposit cash easily, as you can at a brick-and-mortar bank branch. Every online bank is different, so do your research to see what services they offer.
Is Online Banking Safe?
People may worry about whether online banking is safe. In the SoFi survey, 21% of respondents said they were very concerned about the security of their online bank accounts, and another 21% said they were somewhat concerned. The truth is, traditional banks are no more or less secure than online-only banks, and vice-versa. All are at a very minimal risk of a hack.
How to Choose the Right Online Bank for You?
Choosing the online bank can involve considering which features and benefits are most important to you. You may like the user experience of one bank’s mobile app better than another. One bank might offer a more favorable interest rate, while yet another has a particularly convenient network of ATMs.
It’s a good idea to shop around and compare your options before making a decision.
Recommended: What Do You Need to Open a Bank Account Online?
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The Takeaway
Keeping your funds with an online-only bank can offer many rewards. You’re likely to earn a higher interest rate and pay fewer fees, for instance. But those who like banking in person at a branch may choose to stick with a traditional bank. Think carefully about what suits your financial style and needs best.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
Is online banking the same as mobile banking?
While both online banking and mobile banking are digital forms of banking, there is a difference. Online banking refers to accessing your accounts using a web browser and can provide a full suite of services. Mobile banking refers to using an app to access your accounts, and, depending on the financial institution, may offer more limited functionality.
Can I deposit cash into an online bank account?
Yes, you can typically deposit cash into an online bank account, but it can require an additional step. Since online banks don’t have physical branches, you may have to deposit into its network of ATMs or at a retailer or buy a money order that you then mobile-deposit.
How do online banks make money?
Online banks may charge lower fees and offer higher interest rates, but they still have ways to make money. Typically, this is from the higher interest charged on lending vs. the interest paid on deposits, as well as from various fees.
Are online banks FDIC-insured?
Yes, most online banks are insured by the Federal Deposit Insurance Corporation, or FDIC, just as with brick-and-mortar banks. Your money on deposit is protected up to $250,000 per depositor, per account ownership category, per insured bank, in the very rare event of a bank failure. However, it’s worth checking with your financial institution to be sure they offer this coverage.
What kind of technology do you need for online banking?
In terms of what kind of technology is needed for online banking, customers typically just need secure internet access and a compatible device, such as a laptop and/or mobile device.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.
See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.
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