As the internet started to be commercialised in the early 1990s, conventional brick-and-mortar banks began to search for methods to provide online services to its clients. Though initially limited, the success of these early efforts led many banks to expand their internet presence through improved websites that allowed customers to open new accounts, download forms, and apply for loans.
This resulted in the establishment and growth of internet-only banks. These banks provide internet banking and other financial services without a branch network. The Security First Network Bank, which commenced operations on October 18, 1995, was the first fully functioning direct bank insured by the FDIC. Because of the decreased expenses owing to a lack of overhead, Security First and many that followed were able to provide greater interest rates on deposit accounts and cheaper service fees.
Customers’ interest for internet banking expanded as the number of virtual banks available increased. According to the FDIC’s most recent research on banking activity, more than 60% of account holders perform at least part of their banking online. Advantages of Internet Banks
Despite conventional banks’ growing virtual presence, online-only rivals continue to provide significant benefits to customers.
Lower Fees and Better Rates
Direct banks may offer higher interest rates or annual percentage yields (APYs) on savings due to the absence of considerable infrastructure and administration expenses. The most generous of them provide up to 1% to 2% more than standard bank accounts, a difference that may quickly build up if you have a large sum. While some direct banks with very generous APYs simply provide savings accounts, the majority of them also offer high-yield savings accounts, certificates of deposit (CDs), and no-penalty CDs for early withdrawal.
A direct bank is less likely to slap you with a slew of fees, such as those connected with keeping a low-balance account open, making direct deposits, or paying by check or debit card. Direct bank accounts are more likely to have no minimum balance or service costs.
Improved Online Experiences
Traditional banks are aggressively investing in increasing their virtual presence and service, including the creation of applications and website upgrades. However, when it comes to the online banking experience, direct banks seem to have the upper hand.
If you would like to enjoy these benefits too, you can simply log on to your bank’s internet banking website malaysia to sign up now!