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The growth in online banking of late has been tremendous. You may have heard all the buzz and wondered just what it would be like to bank online. I wanted to look at the advantages and disadvantages of online banking. The advantages of online banking are tremendous but the disadvantages are also striking, so we will lay out both the advantages and disadvantages and then allow you the individual to decide what you think of online, or virtual banking.

The Advantages:

• Convenience- There is no larger benefit to banking online than convenience. The bank is never closed, it is there for your convenience 24 hours a day.
• Higher yields- Online banks such as HSBC Direct offer tremendous rates on money market accounts, CD's, and online savings accounts. The yields are sometimes five to ten times that of a brick and mortar bank. The minimums and fees at online banks are generally far more customer friendly as well.
• Account efficiency- You are always one click away from viewing any of your accounts. If you are looking at your checking account and want to switch to savings it will take just seconds.

The Disadvantages

• Registration and startup of the account- This process can take quite a while at some online banks.
• Clearing of checks- The clearing of checks process can be very cumbersome. Some virtual banks also have problems with slow deposits to your account.
• Trust- This is certainly the #1 issue that online banks have going against them. Your information is subject to being hacked, and there is that unknown identity theft question.

There are certainly more advantages and disadvantages, but these are the biggest ones. Online banking has certainly come of age lately, and the future appears to be brighter for virtual banks than it has ever been before. If you can get over the trust concerns, you can certainly make higher yields online. Many individuals may find it nice to have an account at a virtual bank and another account at a traditional brick and mortar bank. This is a nice way to get the best of both worlds in the world of bank accounts. I encourage you to study the advantages and disadvantages of online banking and do whatever makes you most comfortable with your banking accounts.