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Alex
Lv 7
Alex asked in Business & FinancePersonal Finance · 1 decade ago

What are the pros and cons of online bank accounts?

The recent ads for perkstreet with 2% cash back rewards are appealing, but I’m not sure it’s right for me. It sounds like that “2% cash back” is in the form of gift cards to their preferred vendors and there are limitations on depositing/withdrawing funds. Online banks offer better interest rates because they don’t have the cost of a physical bank. It makes sense, but I’m still not quite convinced. Am I just stuck in “the way I’ve always done it” or am I right to be cautious about online bank accounts? I am interested in opinions of perkstreet or any other online bank. Thanks in advance for your advice.

1 Answer

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  • Anonymous
    1 decade ago
    Favorite Answer

    Several years ago I opened an online bank account with HSBC (branches didn't exist where I lived). At the time they were offering 5% interest, which was pretty darn good. I kept all of my emergency savings in there, and when I got interest payouts some were over $100. Not too bad.

    Then we moved, and a HUGE chunk of our savings went to buying a new house and replacing my husband's car. Over the years as the economy got worse, the interest rate went down, down, down, and eventually I just closed the account. I had that account for something like 4 years, though, and never had a problem with it.

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