By Staff Contributors
By now, you should know that you shouldn’t keep your professional money (money earned from your business) in the same account as your personal money. Fortunately, it is incredibly easy to set up brand-new checking and savings accounts for your business; in fact, you can even create a free business checking account online right now. There are dozens of online banks eager to add you as a client and help your business achieve its financial goals.
Unfortunately, you might continue to make the grievous mistake of commingling your business and individual funds because of misinformation about online banking. Online banks are not the unreliable, mystery organizations you believe them to be; for years now, online banks have cultivated excellent reputations for providing useful financial products and services in a convenient way.
Here are a few pervasive myths about online banks and the truth about why you should trust an online bank with your business’s money.
Myth: Online banks are not secure
This is easily the most popular myth about online banking, and it is also among the most difficult issue to fully and accurately address. In truth, some online banks are not secure, but the ones with bigger names and better reputations have been using tried-and-true security practices from the get-go.
Photo: © photoniko, YFS Magazine
Today, federal laws and regulations require all financial institutions, including online banks, to adhere to certain security standards. You should be able to find an online bank’s security policy posted somewhere around its website; the best online banks boast about practices like data encryption, firewalls and dual-factor authentication, all of which will keep your identity and money safer.
Myth: Online banks are not stable
Your biggest fear might not be that your business fails but rather that the bank controlling your business’s funds fails and takes all your money with it. Fortunately, this fear is completely unrealistic.
First, just because an organization exists entirely over the web does not mean it is temporary or volatile; Google, Amazon, and other only online groups have been around for decades and show no sign of disappearing. Secondly, if you are banking with an FDIC-insured institution–which you should be–then $250,000 of your money is guaranteed to return to your pocket if the bank folds.
Myth: Online banking is expensive
Seeing as though several massive banks charge exorbitant fees for you to maintain checking and savings accounts, it would make sense that a smaller institution should levy the same–if not greater–fees. Yet, the reason large banks like Bank of America and J.P. Morgan Chase require monthly fees is because they have too many customers to track; the fee helps the organization pay for necessary maintenance of your account, so you can receive the services and perks you are due.
Photo: © YakobchukOlena, YFS Magazine
Meanwhile, online banks are smaller and slimmer. Because they don’t have myriad physical premises to upkeep, they can afford to offer free services, like checking, ATM deposits and withdrawals and other essentials. Thus, not only is online banking not expensive, but it can even be more affordable than traditional banking.
Myth: Online banks lack customer service
Banking is confusing at the best of times, and business banking is even worse. There is little doubt that you will need to rely on a real, qualified banker to acquire the services you need.
Fortunately, online banks understand that customer service is among the most important offerings of any organization, so you can be certain that your online bank will have comprehensive help available at all times. In fact, most online bank clients are more pleased with online support options than traditional banking customer service.
Myth: Online banking takes more time and effort
It’s true: You will need to learn your online bank’s platform and processes, which will take time and effort — but that is true of any bank.
Most online banks devote resources to ensuring their online systems are as user-friendly as possible, meaning it should only take you a few visits to feel comfortable navigating the digital space. Plus, you can log on and off at your convenience, which isn’t true of traditional banks, which boast difficult hours, long lines and slow, near-useless tellers.
Myth: Online banks cannot provide physical payment services
Though cash and checks are slowly disappearing–in fact, many experts are calling for the altogether eradication of physical payments–they aren’t gone yet. For the time being, your business needs a bank that can manage cash and checks, but just because a bank interfaces with you online doesn’t mean it can’t supply physical payments services. You should verify with potential online banks before opening any accounts, but you should be able to acquire these services easily enough from an online institution.