MoneyLife

Online Banks vs Traditional Banks – Which is right for you?

By Grace Kilander

In the past when you’ve looked for a bank to handle all your money needs, traditional brick and mortar banks were once the only option. Fast forward to 2020 and online banks have become the future of modern banking. Which begs the question, which option works better for you? 

Continue reading to take a closer look and compare online banks vs traditional banks. 

What is the difference between online and traditional banks

While traditional banks still have their place, you no longer need to walk into a branch to get a loan, change your banking information, or sign documents. Skip the dreaded paperwork and long lines waiting at the bank when you open a mobile banking account with MoneyLion. 

Sync your direct deposits, other bank accounts, and manage your money right from the mobile app. Within minutes you’ll have access to a RoarMoney virtual card giving you the ability to handle your banking needs at your convenience.  

Here’s a birdseye view of a Roar Money online account from MoneyLion. 

RoarMoney Account 

  • Instant access to a RoarMoney virtual card 
  • Convenient and contactless banking
  • No hidden fees
  • Over 55,000+ no fee AllPoint ATMs
  • Spend report tracker to help manage budget and finances 
  • Get paid up to 2 days early! 
  • Borrow up to $1000 with a Credit Builder Loan and get same day funding 
  • Access 0% APR Instacash advances up to $250 for $1/month 
  • Earn cash back rewards year-round through the mobile app
  • FDIC Insured up to $250,000
  • Improve your financial health with the Financial Heartbeat feature

Do online banks have ATMs?

MoneyLion offers over 55,000+ AllPoint ATMs across the nation–without surcharges! You can use your physical MoneyLion Debit Mastercard or your RoarMoney virtual card from your Apple or Google wallet. AllPoint ATMs can be found in popular locations like Target and CVS. In fact,1 out of every 12 ATMs in the United States is AllPoint. 

Did you know that select participating AllPoint ATMs are now accepting cash deposits? Click here to find an AllPoint ATM location near you! 

Are online banks safe?

Before you hand over your personal information to anyone, including an online bank, you should do your research and verify their security measures. RoarMoney accounts are insured by our partner bank MetaBank, N.A., Member FDIC up to the standard maximum deposit insurance amount of $250,000. 

Can you get a loan from an online bank?

Yes, there are online banks that offer loans, but beware of online banks offering illegal predatory payday loans. You could end up paying triple-digit interest rates and wind up in a mountain of debt.

A Credit Builder Loan from MoneyLion offers up to $1000 with competitive interest rates and affordable payments made over 12-month installments. A Credit Builder Plus membership fee is $19.99/month and you gain access to weekly credit monitoring, personalized credit tips, and Instacash advances. No need to step into a bank branch to fill out lengthy applications. You can do everything safely, securely, and electronically on the MoneyLion app. 

To get started, open your MoneyLion app, tap the credit tab, and hit ‘Join Credit Builder Plus’. You’ll be asked to answer a few questions to determine eligibility. Once MoneyLion securely scans your linked bank account, you’ll know if you’ve been approved within seconds.

Upon approval, you’ll receive a portion of the loan funds the same day and the rest is held for you in your interest-earning Credit Reserve account. Over 12 months you’ll make monthly installment payments and your positive payments will be reported to all 3 credit bureaus– full and timely payments are key! 

Once your loan is paid back in full, the remaining funds in your reserve account will be released to you. This unique way of borrowing helps you build credit while practicing smart saving habits. 

Do online banks have lower fees?

Traditional banks require more overhead vs. online banks such as location rent/mortgage, utilities, branch maintenance fees, and employee overhead–per branch. These overhead costs are much higher than online banks that offer remote services and the price is reflected in consumer fees. For example, a RoarMoney account is only $1/month with no hidden fees or minimum balance and access to our smart financial services like auto-investing. 

RoarMoney investment accounts offer an approachable and convenient way to invest without the fuss. Your fully managed investment account is curated to reflect your preferences and risk tolerance level. At any time you can add funds or withdraw funds– no minimums required. 

Looking for a more laid back effortless approach to investing? Set-up your investments on auto-pilot with recurring monthly deposits. Read more about auto-investing and allow MoneyLion to do the hard work for you.

Online banking is the future 

The debate over online banking vs. traditional banking might be a personal preference, but modern banking is the future and MoneyLion is ahead of the curve. Sign up today and earn 2% cashback rewards all year at stores like Best Buy, Macy’s, Etsy, and Bed Bath and Beyond when you purchase through the MoneyLion tab in the mobile app.

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