If You Don't Want To Bank Online, What Are Your Options?

Along with the explosive growth in online banking – and even mobile banking – have come concerns about banking security. Online banking holds the possibility that your information can be either hacked from your computer, or even intercepted during transmission to and from your bank.

There are security methods being used, and others you can add that will minimize the possibility of theft. Banks typically employ various security measures, including encryption of sensitive data. And you can protect your computer by adding anti-virus and other security services to the device.

But there is no way to absolutely protect your information with online banking. After all, the information is being transmitted over the internet opens many possibilities for interception.

If you’re concerned about the security risks of online banking and don’t want to bank online, what are your options?

Think of it as back to the future…

Old school banking 

With the dramatic rise in online banking over the past 20 years, many people may be unaware that traditional, old-school banking never actually disappeared. It’s just become less common.

In fact, most of the people still using old-school banking are the elderly. That’s mostly because they got used to old-school banking from doing it most of their lives. 

But the message for everyone else is that old-school banking is still an option. 

This form of banking involves the following practices:

• Receiving paper bank statements each month.
• Paying bills by check, rather than automatic drafts or online payments.
• Accessing cash at the teller window, rather than from an ATM machine.
• Checking your daily balance and activity either by visiting a bank branch or by calling for the information.
• Receiving payments by paper check, and depositing them directly into the bank.

But in today’s world, where most business takes place online, the old-school banking methods will be more cumbersome, less convenient, and not nearly as well accepted as it used to be.

The fact is, most individuals and merchants – as well as government agencies – expect to transact business online. It’s faster, easier and less expensive. As a result, you may find old-school banking less welcome than it was, well, back in the old days at least. 

Hybrid banking – mixing old school banking with SOME online practices

Your ability to use old-school banking really depends on how you’ve been banking up to this point. If you never adopted online banking, you can simply continue doing what you’ve been doing. But if you’ve already become accustomed to online banking, disengaging from it may be more challenging and complicated than you imagine. 

The best option may be to attempt some sort of hybrid merger of online banking and old-school banking.

Here are some examples:

Receiving payments

It won’t be possible to get all payment sources to pay you by paper check. You can certainly try to encourage this as much as possible. But in today’s online world, you’ll almost certainly have to accept a compromise. 

For example, direct deposit of employer checks started way before online banking. You can continue that practice. And if you have a business, and receive many payments from multiple clients each month, you have no choice but to accept electronic deposits.

Sending payments

You can certainly go back to making most payments by paper check. But increasingly, merchants and service providers are insisting on electronic payments. (It eliminates the possibility of bounced checks.)

You can make as many payments by check as possible, but in situations where electronic payments are either required or preferred, you’ll have to make those where necessary. 

Monthly statements

The complication here is that many banks no longer send them out for free. As online banking becomes more popular, and fewer people require paper statements, providing them is increasingly becoming a special service.

Most banks today are charging a fee of anywhere from $1 to $5 per paper statement. That can add anywhere from $12 to $60 to your annual banking costs. 

Making purchases

This may be the most complicated effort of all. Very few merchants will accept checks anymore, especially for small payments. The time it takes to process the checks, as well as the possibility of those checks bouncing, are scaring merchants off. Even those that do accept them do it reluctantly. And of course, making purchases online can’t be done by either cash or check.

The best alternative may be to make larger purchases, say $100 or more, by check. The rest should be made in cash.

That, of course, will require carrying a significant amount of cash at all times. You can go to the bank teller window, perhaps on a weekly basis, and withdraw a sufficient amount of cash to cover your purchases for the week. You can then make all purchases under $100 in cash.

However, if you’re uncomfortable carrying cash, for the security risks it poses, you may want to go the ATM card route. Though you may not want to make routine purchases with the card, you can certainly use it to access cash. 

It won’t completely eliminate the risks of using a debit card at an ATM machine. But by using it to access cash – which you will use for purchases – you can certainly reduce the frequency with which you use the card. The debit card will also allow you to make online purchases. 

Get a prepaid debit card

Still another option is to use a prepaid debit card. These are sometimes offered by your bank. But where they’re not, you can opt for dedicated prepaid cards. 

One example is the Green Dot Prepaid Mastercard®. You can use the card anywhere Mastercard is accepted. It also has a low activation fee, free direct deposit, and a flat-rate monthly service fee. With Green Dot, you can simply load the card, then use it to make purchases the same way you would with a credit or debit card. That includes making online purchases.

Since the Green Dot card isn’t connected to your bank, there’s no possibility of your identity or your bank account being compromised in a transaction. 

Online banking vs. traditional banking

Pros of traditional banking

Unpacking why traditional banking may still be better than online banking…..

1. Traditional banks feel more secure. Although online banks are making strides to become completely secure, the fact is, hacks are all too common.
2. You’ll have an in-person relationship with your bank. One of the biggest perks of using a traditional bank is the fact that you have a personal relationship with the folks at your bank. This relationship can lead to better rates on auto loans, mortgages, and more. It’s easier to argue your case for a better rate in person rather than online.

Cons of traditional banking

Now some of the reasons you might not want to use a traditional bank.

1. You can easily lose cash. Paying with cash comes with its own risks. First, you’ll have to carry a sufficient amount to conduct your business. That holds the possibility of the money being lost or stolen.
2. Lost checks. The most obvious thing that can happen is that your check is lost or misdirected in the mail. In fact, it’s estimated that 4.7% of all first-class mail is misdirected. That opens the possibility that a check sent in the mail can end up in the wrong hands.

Pros of online banking

Here are my top 2 pros for online banking.

1. Super convenient. Online banking is everywhere and generally 24/7. No more waiting for the bank to open and trying to build your schedule around when you can get to the bank.
2. Lower fees and interest rates. Yup – don’t you know it. Online banks can give you that much better of a rate because you’re not paying for the bank’s electricity et al.

Cons of online banking

Now just a few of the disadvantages of online banking.

1. No in-person assistance. You don’t have that friendly banker who is gonna help you figure it all out. You’re more on your own.
2. No ATM machines. Most online banks don’t have ATM machines, so to withdraw cash, expect to pay those annoying fees when you are withdrawing cash.

Summary

As desirable as old-school banking may be from a security standpoint, there’s a very real possibility it’ll completely disappear. With virtually every bank having an online presence, and some operating exclusively online, a clear future trend is developing.

While you may be able to revert to old school banking for a time, your days using it may be numbered. That’s why, as desirable as it may seem to go back to old-school banking, there may be no long-term alternative to the online version.

The better solution may be to continue with online banking, but work-in enhanced security measures to the degree possible, and as they become available.

But whether you use online banking or old-school banking, there’s no way to completely eliminate risk. Both involve transacting with money, and that always draws the attention of potential thieves. Whether that happens electronically, or with cash and paper statements, probably isn’t as important as we think.

Read more

• Banking 101—A Guide For Teenagers (And Anyone Who Needs A Refresher)
• Finance 101: How Do Banks Make Money?