Should You Choose a Brick-and-Mortar Bank or an Online-Only Bank?

Brick-and-mortar is just another name for a traditional bank located in a building. These types of banks have physical locations called “branches” and are often part of a larger, even national, bank chain. On the other hand, online banks (also known as mobile banks) have no physical location, as everything is done on a mobile device, such as a smartphone. Both have their advantages and disadvantages, so here’s a look at both types of banks so that you can choose which one is best for you.


ATMs (Automated Teller Machines)

If you rely heavily on ATMs, you’ll probably want to choose a brick-and-mortar bank. Both national and local bank branches have ATMs right outside of the building, and national banks have ATMs in various locations in various cities. When banking with an online-only bank, there are no ATMs available for you to withdraw money— without an additional fee. However, depending on which online bank you choose, you may be able to withdraw cash at certain department stores and grocery stores without having to pay an additional fee.

With cash not being used today as much as it has been in the past, this may not be a problem for most people. If this is true for you, then an online-only bank may not be such a bad idea.


Ease of Access

Again, brick-and-mortar banks may be more convenient for those who like the idea of having a physical building to go into and bank tellers to speak with. This is especially helpful when traveling out of town and your bank has several branches all over. Just keep in mind that you’ll be subject to the banks’ business hours, which are very limited. It also takes more time to open a bank account at a traditional bank than it does to open one online.

Mobile banks offer more convenience to those who don’t mind not having a building to go into. With online-only banks, you’re also not subject to any business hours. It’s also much easier and quicker to open an account online.



Traditional banks come with higher fees, whereas mobile banks come with little to no fees. These days, brick-and-mortar banks charge maintenance fees which can be as low as $5 or as high as $15. The good news is that a monthly deposit (the exact amount depends on the bank) waives the monthly maintenance fee, but not everyone is able to meet this requirement and is therefore charged the maintenance fee.

On the other hand, mobile banks charge little to no fees, depending on the bank you choose. Not many online banks will charge you a monthly maintenance fee— instead, you’ll keep all of the money that’s deposited into your bank account.


Interest Rates

When talking about interest rates and your savings account at a bank, you’ll want these interest rates to be as high as possible. Most banks (both traditional and mobile) allow you to earn interest on the money that you put and keep in your savings account. However, traditional banks offer much lower interest rates than mobile banks. This means that you’ll earn less money in your savings account in a traditional bank than you would with a mobile bank. 

Online-only banks offer higher interest rates on your savings, putting more money in your pocket and allowing you to earn while you save. If you don’t want to open an online checking account, at the very least consider getting an online savings account to earn as much interest as possible.


Mobile Access

The good news is that both traditional and online banks allow you to access them from your smartphone. Most brick-and-mortar banks (especially the national branches) have apps that you can download to your smartphone and access all of their features there. You can also use the browser on your smartphone to access a branch online, specifically local branches that may not have an app. 

However, online-only banks have much more user-friendly apps because the app is also their “building” in a sense. These types of banks make sure that their apps are easy to use since it acts as a structure when there is no physical structure.


The future of banking may look towards the online-only direction, but as long as brick-and-mortar banks are still around, there are still some advantages to using them. However, it’s still a good idea to get used to online banking by downloading your bank’s app on your smartphone. Also, consider an online-only bank for your savings account, at the very least, to earn more interest on your savings.