Virtual bank accounts exist only online and do not have physical branches or ATMs. They offer various types of accounts and services, including online bill payment. Customers can access their money through associated ATMs or point-of-sale transactions. Virtual banks have lower overhead costs, which they pass on to customers through waived fees or higher interest rates. However, customers must deposit money through direct deposit or mail, and some may miss the personal service of a physical bank.
A virtual bank account is a type of bank account that exists only online. Most banks offer some type of online banking service, but true virtual banks generally do not have physical branches or ATMs. With a virtual bank account, most transactions take place over the Internet.
Many types of bank accounts can be virtual, including checking accounts, savings accounts, certificates of deposit, money market accounts, etc. Users often use the Internet to check account balances, transfer funds, and perform other routine transactions. Some virtual bank accounts offer online bill payment services, which eliminate the need to write and mail physical checks when paying bills.
Although virtual banks generally don’t have their own branches or ATMs, customers still have ways to access their money. For example, some virtual banks identify associated ATMs, from which customers can withdraw their money without a fee. Other virtual banks sometimes refund a set number of foreign ATM transactions each month. If free use of the ATM is not an option, customers can usually get cash back on point-of-sale transactions using their debit cards.
Most online banks allow customers to sign up for a new account from their website. The account opening process can be time consuming, often involving mailing or faxing account documents between the bank and the new customer. Once the account is opened, the customer generally has electronic access to their account and can conduct most transactions online.
A virtual bank account has a number of advantages over a standard bank account. Since virtual banks do not have physical branches, their overhead costs are much lower than traditional banks. Many virtual banks pass these savings on to the customer by waiving bank account fees or offering higher interest rates on savings accounts.
Also, a virtual bank account is often considered more convenient than a traditional bank account. Clients do not have to restrict their transactions to banking hours; They can usually complete almost any transaction they want at any time of the night or day. Services like online bill pay help reduce the time spent paying bills, as well as the cost of stamps, checks, and envelopes.
However, some people are put off by the disadvantages of online banking. One of the biggest drawbacks of virtual bank accounts is that there is no physical branch to accept deposits. Customers with virtual bank accounts generally must use direct deposit or send their deposits by mail. Some people find that they miss the personal service of a physical bank. Also, many people are wary of doing their banking over the Internet; PC viruses and spyware can put virtual bank account customers at risk of identity theft.
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