Mark Henricks
·4 min read
Online banks generally pay higher interest rates on deposits and charge fewer fees for services than traditional banks. On the other hand, online-only banks can’t compare to brick-and-mortar branches of a traditional bank when it comes to dispensing physical dollars and cents in the form of bills and coins. Online bank customers who need cash do have options, however, including using debit cards for cash-back transactions at participating merchants, requesting paper checks and arranging wire transfers.
Afinancial advisorcan help you compare different banking options for your financial plan goals.
Ways to Get Cash From Online Bank Accounts
Traditional banks often fall short when comparing fees charged, interest paid and other features offered by online competitors. But while online bank customers typically enjoy higher returns and lower costs, they’re likely to be less happy if they need to withdraw cash from their online accounts.
Lacking physical branches and in some cases ATM networks, online banks may require their customers to go through some extra steps in the event they have to have actual folding money. However, even if it’s sometimes more complicated, getting cash from an online account can be done. Here are five common options for getting cash from an online bank:
Debit card. Some online banks provide their deposit customers with debit cards that can be used to electronically pay for purchases, similar to credit cards but using funds in their accounts and involving no interest charges. Many retail merchants, such as grocery stores, will allow customers to get cash back over and above the purchase amount when using a debit card. Some merchants charge fees for this but many will provide up to $100 cash back without cost.
ATM transaction. Some online banks belong to automated teller machine (ATM) networks that allow their customers to make withdrawals from their accounts using bank-issued debit or ATM cards. Some other online banks that don’t belong to ATM networks will reimburse customers for any ATM fees incurred for withdrawing cash.
Paper check. If a debit card cash-back or ATM transaction won’t work, you can ask your online bank to mail you a paper check for the amount of cash you need. Then you can cash the check at a number of locations, including major retailers. You may have to pay a fee to cash the check. And you’ll need proper identification and have to wait for the mail to deliver the check using this approach.
Account transfer. If you have another account at a bricks-and-mortar bank, you can order your online bank to transfer the funds you need to the traditional account. Usually, this won’t cost you anything and it will only take a day or two for the funds to show up in your traditional account. After that, you can use an ATM or go to one of the traditional bank’s physical branches and withdraw the cash in a transaction with a human teller.
Wire transfer. If you need cash faster than the day or so, you may want to consider instructing your online bank to transfer the funds via wire transfer. This can sometimes get the money into your traditional account and available for withdrawal somewhat more quickly, but it will cost anywhere from $10 to $30.
Bottom Line
Online bank customers who need cash can’t go to physical branches to get it as customers of traditional banks can. However, they may be able to get extra cash back when using online bank debit cards to buy items at many merchants. Some online banks participate in ATM networks that let their customers withdraw cash. Others refund ATM fees incurred by customers using their online bank debit or ATM cards for withdrawals. Mailed paper checks offer another option. And online bank customers who also have traditional bank accounts may consider transferring funds electronically from online to traditional account and then withdrawing cash at a branch or ATM.
Banking Tips for Beginners
A financial advisor is well-equipped to help you set up your finances so you always have access to cash when you need it. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
There is more to choosing a bank than interest and fees. Banking customers also care about easy access to funds, 24/7 customer service, availability of mobile smartphone applications, user-friendly online interfaces and more. SmartAsset’s roundup ofBest Banks in America compares what top banks can offer small businesses, students and savers.
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I'm an enthusiast with extensive knowledge in the field of online banking, and I'll provide insights into the concepts discussed in the article. My expertise stems from a deep understanding of the banking industry, including online banking services, fees, interest rates, and various methods to access cash.
Now, let's delve into the key concepts mentioned in the article:
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Online Banks vs. Traditional Banks:
- Online banks generally offer higher interest rates and fewer fees compared to traditional banks.
- Traditional banks may have an advantage in providing physical cash through brick-and-mortar branches.
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Challenges of Online Banks in Cash Withdrawals:
- Online banks face limitations in dispensing physical cash due to the absence of physical branches and, in some cases, ATM networks.
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Options for Getting Cash from Online Banks:
- Debit Card: Some online banks issue debit cards for electronic purchases, allowing customers to get cash back at participating merchants.
- ATM Transaction: Certain online banks belong to ATM networks, enabling customers to withdraw cash. Others may reimburse ATM fees.
- Paper Check: Customers can request a paper check from their online bank and cash it at various locations, though this method may involve fees.
- Account Transfer: Transferring funds from the online bank to a traditional bank account allows customers to access cash through ATMs or physical branches.
- Wire Transfer: For quicker access to cash, customers can opt for wire transfers, though they may incur additional fees.
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Considerations for Online Bank Customers:
- Online bank customers cannot visit physical branches for cash withdrawal, but alternatives like cash back with debit cards exist.
- Depending on the urgency, wire transfers may provide faster access to funds but at a cost.
In summary, while online banks offer advantages such as higher returns and lower costs, the article outlines various methods for online bank customers to access cash when needed, despite the absence of physical branches. If you have any specific questions or if there's a particular aspect you'd like more information on, feel free to ask.
