How to Switch to an Online Bank and Why You Should

Money | Personal Finance | Online Bank | Automate

Are you sick and tired of big banks and their ridiculous fees? I made the switch to an online bank and you can too. In this article you’ll learn how to switch and why they are so much better than traditional banks. I’ve tried the future of banking and I love it. I think you will too.

I finally did it! I’ve switched from a traditional brick and mortar credit union to an online bank. If you don’t know what a credit union is, it’s basically like a bank but with less fees and usually smaller.

You have to realize I worked in the credit union industry for 13 years. I know how everything works. I knew everyone at my credit union so it was easy to reach out when I needed help with something. This made it harder for me to change.

The problem was that I love technology and how you can use it to simplify and automate your life. My credit union wasn’t exactly on the cutting edge of technology.

Don’t get me wrong, I loved my credit union, but the inability to use things like iPay or other apps that integrate with financial institutions was becoming a problem for me. Even though I can avoid fees like the horrible overdraft fees I simply don’t like that a bank or credit union is threatening me with them.

It was time for a change.

How to Switch to an Online Bank Cheat Sheet

Problems with Traditional Brick and Mortar Banks and Credit Unions
Fees

This is the number one problem with big banks. Banks originally were not like they are today. They made money mostly off of lending out a reasonable amount of the money in the bank and charging interest.

It use to be partnership. Not any more.

Now banks are designed to find ways to make money off of you. They creatively come up with any fee’s they can to keep more and more of your money.

They’ve become a money trap more than a service to you and I.

Only the most financially savvy people are able to avoid all of the fees and actually get quality service from the banks. Here is a list of just some of the fee’s they try to hit you with:

  • Overdraft fee’s

  • Maintenance fee’s

  • Fee for losing your card

  • Fee for closing your account

  • ATM fee’s

  • Minimum balance fee

  • Returned deposit fee

  • Transfer fee

There are all kinds of fee’s. This list could go on and on.

So what is the first alternative to the banks? Credit Unions.

 

Credit Union Problems

Credit Unions are like banks but are usually local or affiliated with a group like for example, federal employees, or maybe you have an employer that has a credit union associated with it.

I worked at a credit union for 13 years and can tell you they are definitely better than a big bank in regards to fees and customer service.

However credit unions are slowly becoming more and more like big banks and have their own issues.

Just like banks my number one issue with a credit union. FEES!

Yes, credit union fees are generally lower than banks, but more and more they are simply copying the big bank fee’s but just undercutting the fee a little. All the same fee’s that shouldn’t even be there in the first place!

The next problem with credit unions is technology. Unless you are with a really big credit union, their technology may not be quite cutting edge.

At my credit union I still could not even use newer payment technologies like Apple’s iPay to pay for items.

Some apps could not even see my credit union as a potential financial service provider making it extremely hard to embrace new technology that furthers my automated money system.

On top of that, the online banking, online bill pay, and even the app were clunky, unintuitive, and behind the times.

The final straw for me was how hard it was to find an ATM that was fee free. Anytime I went to an event that was cash only, it was nearly impossible to avoid paying ATM fees.

It’s my money! I shouldn’t be fee’d to look at my balance or simply withdraw some of my own cash. That was it. I was done with the traditional dinosaurs of big banks and credit unions. It was time for a change.

 

The Online Bank

With online apps and services taking over for every niche out there, I knew there had to be a better alternative. I researched for some time and eventually decided to go with Simple.

If you haven’t heard of Simple. They are an online bank you can access via their website at www.simple.com, their app, and the phone.

Banking can be ridiculously complicated, but if you’ve been reading my site for a while, you know that I always prefer a clean, simple, and automated approach to everything. Simple provides exactly that for banking.

They provide the following services:

  • Checking account

  • Debit card

  • Bill payment

  • Photo check deposit

  • Transfers from and to other banks

  • Mail checks

  • 50,000 Free ATMs

Here are some other cool app features they provide:

  • Create financial goals

  • Instantly know what is safe to spend

  • Fingerprint unlock

  • Block and unblock your debit card from the app

  • Instant notification of purchases

  • Clean and simple iPhone and Android app

  • Great transaction details and graphs

Finally:

  • NO minimum balance fee

  • NO monthly account maintenance fee

  • NO overdraft fee

  • NO ACH bank transfer fee

  • NO account closing fee

  • NO card replacement fee

  • NO ATM fees in network

With a traditional bank I didn’t get all of those features and of the ones I did, I had to worry about whether I was going to get feed for even doing them!

 

Signing Up

Signing up couldn’t be simpler. :) No really, it’s super easy.

Download the app from your phone's app store. They have both an iPhone and Android version. They will guide you through everything you need to provide once you open the app.

They really only need info like your:

  • Name

  • Address

  • Social Security Number

  • Date of Birth

  • Etc..

Once you provide that info you will have access to the app but, you’ll have to wait until your debit card arrives in a week or two to be able to spend from the account.

In the meantime however you can connect your current bank account with your account number and routing number to transfer in some money.
 

Reconfiguring Your Automation System

The hardest part of changing to an online bank or any bank for that matter is reconfiguring your automation system.

Even if you haven’t automated your money yet you probably still have some automatic connections to your bank account like your deposits, automatic payments to services like Netflix, etc.
 

Deposits

If you work for an employer you most likely have an automatic deposit of your paycheck each pay period. If you do you’ll need to contact your payroll department and request your automatic deposit to goto your new Simple account.

You may have to fill out a short form to do so and most likely they are going to need your Simple account number and routing number. In the app on your profile page press account numbers. There you will find your account number, routing number, and bank. Everything you will need to adjust your deposits.

If you have any miscellaneous income like child support, social security, or anything else, you’ll need to call them and provide the same information to them as well.

Now, if you have a side hustle or even own your own business you’ll need to redirect your income to Simple also. Just list out all of your income sources for your business and ensure that they all have your new information as well.

That takes care of your automatic income deposits. What about random checks you get? No problem. From within the Simple app you can press the Payments and Transfers tab.

From within this tab you can press Deposit a Check. Enter the amount of the check and then press Next.

Now you will be able to take a picture of the front and back of the check. That’s it! No stopping by the bank and wasting time. In a minute or two you have deposited your check.
 

Expenses

Next you will need to setup your expenses.

If you have any companies that are automatically charging your debit card or bank account like for example, Netflix or your auto insurance company, you will need to login to their site or contact them to change your payment method to your new debit card or give them your checking account number and routing number if that is the way you have payed them in the past.

Finally, all your remaining bills need to be added into the Simple app as recurring bill payments.

If you’ve already done this in another bill payment app, it’s time to turn off those automations. Log into your existing online bill pay service and disable those payments. I would keep the list as a reference when you add them to Simple.

Now open up your Simple app and let’s add those bills to your automated bill pay system. For each bill you pay each month you’ll need to add a recurring payment and it is as simple as expected.

Press the Payments and Transfer tab. Press Pay a Bill. Press Add a Bill.

For each bill add the required info like company name, address, account number, etc. Set your schedule and your off! Couldn’t be much simpler.
 

The Future of Banking

If you haven’t already switched to an online bank. I highly recommend it. It is the future of banking.

Simple has provided features I’ve never had access to and will likely change the way I automate my money going forward.

There are ton of other great features in Simple that I’m beginning to work with now and will likely come out with some new guides on how to best use them in the future like digital envelope style budgeting built right into your checking account.

Another great feature is the ability to set goals right in Simple that can help you work toward saving for your goals.

More to come…


David Shepherd is the founder of Let's Automate Your Life. Lifestyle automation using technology for personal finance, productivity, business, and much more. Learn how to upgrade your life and become You Version 2.0!

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