A reader's online bank account has his mother worried.

Question: I’m in college, and my mom is horrified that I still don’t have a “real” bank account. I keep my money in Ally Bank, an online bank. My mom thinks that’s unsafe, and she can’t get over the fact that Ally has no branches I can visit if there’s a problem.

I realize you deal with bigger problems than this, but how can I convince my mom that online banking is legit? And that maybe she should try it? She’d definitely save some time and money.

— Patrick in Oklahoma

Howard Dvorkin CPA answers…

Like most things, online banking is safe if you do it right. Thankfully, “right” is also easy. Let’s use your bank as an example.

Ally Bank is highly rated. In fact, my friends at GoBankingRates deemed them the No. 1 online bank for two years in a row. Why? Because Ally has many of the features you should look for…

  • It’s FDIC-insured just like brick-and-mortar banks.
  • It doesn’t charge a monthly fee for a checking account. (“Fees average $8.61 at online banks and $12.95 at brick-and-mortar institutions,” GoBankingRates says.)
  • It offers round-the-clock customer support on the telephone, live chat online, and a mobile app.
  • For savers, CD rates are higher than brick-and-mortar banks.

There are many banks just like Ally Bank, and finding the perfect one for you might take an hour or so of web searching. For instance, many online banks offer free ATM service by partnering with brick-and-mortar banks. However,  the overall number of ATMs and their locations might not mesh with where you live, so checking their websites is a good idea before opening an account.

As for visiting a branch bank, your mother doesn’t need to worry. A report by my friends at Bankrate indicates, “39 percent of Americans haven’t visited a bank or credit union branch in at least six months. This is up from 34 percent when this question was last asked in March 2014.”

It’s quite possible branch banks will go the way of print newspapers: Still around for those who prefer them, but no longer the only delivery method.

I understand your mother’s reluctance to suddenly shift her hard-earned cash into a new kind of bank that didn’t exist a decade ago. Still, technology has been a huge boon for those looking to control their spending and eliminate their debt. So let me recommend a half-step for her and something you should definitely consider.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC