Banking Without Branches (3 Months Later) & A HUGE Life Lesson Learned

Woah, I can’t believe time has flown by this quickly.   It seems like just yesterday I was walking into my banks, closing my accounts, and requesting a cashier’s check with the remaining funds.   Why did I do this? My wife and I were looking to consolidate our finances after our wedding and wanted to experiment with using a bank without any physical branches in our area.   Ultimately, we selected Capital One as for this grand experiment.  That was three months ago, so I wanted to share the results of this experiment with all of you!  But wait, there is more.  Over the last three months, this experience and others has taught me a HUGE life lesson that I would like to share with all of you.

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An Update on banking without branches

Really, I’m just trying to build up the drama here by calling this a grand experiment.  In truth, there is nothing too risky or difficult with deciding to leave a traditional brick and mortar bank and only bank with a company like Capital One (referral link), Discover, etc.   Before the switch, my wife and I had accounts with four different banks.  Now, we are down to one….ah the peace that has come with only having to log into one account.   Happily, I would like to report that we the switch has not impacted our life one bit.  Those were the results we were hoping for here as we continued to find ways to simply our finances.

In the article I linked in the introduction of this article, we walked through our concerns about making the switch and I dispelled each concern with why I thought it wouldn’t be a big deal.  Now, I’m going to revisit each of the concerns and see if my predictions were accurate:

Concern #1 – Depositing Checks.  My response to this concern was that Capital One offers mobile deposit for up to $5,000 in checks in one day.  As it turns out, my limit was increased to $50,000 after I wrote the initial article.  I’m fairly confident that I will never cash more than $50,000 in checks in one day….or if I do, I will welcome those days with open arms.  Plus, it is really, really nice depositing the checks from the comfort of home versus driving to the bank/ATM.  My prediction proved right on this one!

Concern # 2 – Access to Cash.  I dispelled this concern after learning that Capital One offered free access to over 20,000 ATMs nation wide and 5 within a one mile radius of my house.  In the last three months, I can count the number of times I withdrew cash from an ATM on one hand and when I did, it was really nice being able to do it at the ATM in the 7 eleven that is two blocks away from my one.   Once again, my prediction proved right!

What Life Lesson Did I Learn?

Am I really shocked about this??  Heck no.  This was about as safe as a departure from a norm as possible.   But I think there is a larger lesson here and one that was driven home by ditching my traditional bank in favor of an online one.  Hopefully a lesson we will write more about on this website over time (As we have already over other areas/topics as well).  The lesson:  Don’t be afraid to challenge financial norms or the lessons we have been taught about finance throughout our life.   I grew up driving through ATMs or depositing checks in a bank with my mom and we probably did this hundreds of times.  It was great, we caught up with one of her friends that worked at the branch and I always received a free treat of some capacity (candy as a child…coffee as I turned older).   This is what banking was to me and this is what bank is to so many out there.  When I moved out on my own, I didn’t even consider Capital One because my first instinct was to find a bank that had no fees and was conveniently located to me.  However, finally, my wife and I were creative and willing to try something that didn’t feel natural and was a little uncomfortable.  And you know what, life continued without missing a beat.  All because we challenged something we were taught throughout our lives.

Switching banks isn’t risky, as I mentioned earlier, and their really wasn’t a financial benefit from doing so.  Fine, I’ll show you an example of where Lanny or I challenged a financial norm that can benefit you financially.  A few months ago, Lanny began writing about his tax-adjustment series because he was tired of paying a ridiculous tax burden.  No one likes paying the taxes.  What norm did Lanny attack?  How many of us were told to funnel our money into a Roth 401k vs. a Traditional 401k because you won’t pay taxes later?  Probably most of you out there because I sure as heck know the two of us were.  One day, Lanny decided to attack this financial norm and perform an unbiased analysis in an article to determine whether a Roth or Traditional 401k  provided the greates benefit.  Judging by the tone of this article, you can guess which option won.  I’ll be honest, it took me a while to get on board with the idea because it was different from my perception of the most efficient way to save for retirement.  But he kept challenging the assertion and trying to sway my opinion about the topic.  I wasn’t convinced until I finally saw the results trickle in and see his portfolio skyrocket as a result of it.  Then, only then, was I willing to consider this new option.  Of course I switch my 401k from Roth to Traditional shortly after.

Alright, now I’m stepping off my soapbox here.  I entered the process with 4 bank accounts and I leave with only one account and a completely different perspective on an aspect of life.  Over the last three months, I have challenged one norm and Lanny tackled many through his there part tax series all with extremely successful results. Why am I not challenging more of them?  I leave this article and my conversations with Lanny thinking “what other norms are there for me to tackle?”  They don’t all have to make a large impact, but a bunch of small battles can add up quickly.   One of our blog’s first articles was about 7 easy ways to save money and as I re-read the article earlier, I realized we wrote that article in the spirit of this lesson as each of the seven ways to save opposed the norm or practices that were common among co-workers, friends, and family.  Surely there are more than seven norms to tackle out there and now it is time to begin finding and challenging all of them.

Do you use an online bank exclusively?  What easy financial norms have you challenged in the past?  Any suggestions of some norms to challenge going forward?

-Bert

 

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18 thoughts on “Banking Without Branches (3 Months Later) & A HUGE Life Lesson Learned

  1. Does Capital One let you schedule transfers to internal accounts (savings to checking) on a set date? I like Discover bank but the missing feature from them has me looking somewhere else. I prefer to keep money in checking only when I have to make payments.

  2. Sorry to be dense. did you move from Capital One or to capital one? I do all my banking exclusively online through Cap One 360 which is pretty awesome. Their savings offers 0.75% and anyone can open up a money market which is paying 1% which makes it a nice place to stash any extra cash. The only problem is their business account (spark) which has a terrible website and is always down. But for the liquid & interest rate it’s worth it to me. The future is branchless banking and when cash goes away it will all be digital anyways so just getting ahead of the trend! 🙂

    • Dividend Ten,

      Sorry I was not more clear in the article. I moved TO Capital One. I had a savings account that I periodically used; however, I mostly used this for trading as it allowed free transfer to my Capital One Investing account. We did not use it as our day to day checking account. The Capital One 360 interest rates are AWESOME and it is nice to receive a high rate in our mortgage savings account. Will definitely help give us some extra firing power when we finally decide to buy a house.

      That’s a bummer that the business accounts aren’t better. I would think they would be able to win over a lot of customers if they offered businesses the same quality of a website that they offer regular customers. Banks are looking to shed branches, that’s for sure. But I may have to disagree with you about a digital currency. That might be too large of a shock to the system.

      Thanks for the comment!

      Bert

  3. I have not used a bank with branches in 16 years, thanks to USAA and Navy Federal, although NF does have branches scattered on bases.

    We currently use Charles Schwab for our main checking account and Ally Bank for our savings accounts. Works like a charm and I never pay any fees whatsoever.

    I get people who ask “but what if you need cash”? For small stuff I can use any ATM anywhere and get refunded the fees. For large purchases like when I bought our van last month for $9,400 cash, I walked into a Wells Fargo (I have no accounts there) and did a cash advance for $9,400 using my Schwab debit card. Easy peasy and no fee.

    • Woah. 16 years. Man you were ahead of the trend Chad! Sounds like your combination of Schwab + Ally accomplishes the ease of online banking plus the high interest rate that I can achieve with Capital One. As you demonstrated, there will always be a way to get cash. Sometimes the periodic fees may be worth it as a trade-off for simplicity 99% of the time. The online banks all re-imburse fees it seems because they all know how big of a concern this is to potential customers. Good call with the cash advance. People forget that their is more than one way of doing things sometimes. I’m happy we decided to jump into this pool.

      Thanks for sharing your story.

      Bert

  4. I’m in the hybrid world. I have a traditional bank account and one that’s exclusively online (Capital One like you). The reality is such that I do not need to go to a traditional branch and can count on one hand the number of times I actually visit a branch in one year. Like most people, the number of checks I write in a year or receive for that matter may total 10, combined. Still, I keep my traditional account as several monthly payments are attached to it and laziness more than anything to make the switch is the reason I haven’t closed my account yet. Branches will go away sooner than later and traditional banks will make the switch to online only formats as cash becomes increasingly digital. Thanks for sharing your real world “experiment.”

    • Divhut,

      Nothing wrong with the laziness factor haha Trust me, after switching automatic payments once I will never do it again unless I need to. Many is it a pain in the a**. You are right, banks are looking to shed the fixed cost and even the smaller community banks are finally starting to adapt the mobile technology needed. For some people and some places of the country, they will never be able to shed the traditional banking experience. And for that, there will always be a branch where they can deposit their funds. However, those will be the minority one day.

      Thanks for stopping by!

      Bert

  5. We are with the biggest bank in Australia, it has the most amount of branches and ATMs. But, it’s been a few years since I last went into a branch, and a few months since I last used a branch (thanks Visa!), the cashless society is really happening.

    We exclusively do online banking, it’s a lot easier, quicker and more accessible. Branches, except for banking cash and cheques just aren’t needed any more.

    Tristan

    • Tristan,

      Isn’t it crazy how infrequently you actually go to a bank?? My mom has the traditional banking model in mind and it blows my mind how frequently she is always going to the branch. I’ve showed her countless times how to remotely deposit checks and she still prefers the old way. I can’t convincer her how much more convenient it is haha Why drive and incur the gas cost when you can do it from home??

      Thanks for stopping by!

      Bert

  6. Like Chad, I use Schwab for banking as well. I do have a US Bank checking account that I used to use to deposit checks (before Schwab added check deposit to its mobile app). I also used them in the past to get quarters when I still needed those for laundry. However, it’s been years since I’ve walked into a branch. The ATM fee rebates that Schwab offers mean I can use any ATM without worry.

    Sounds like you made a great choice with Capital One!

    Scott

    • Scott,

      Thank goodness I don’t need to get rolls of quarters any more for laundry! I hated going to the bank or grocery store just for that. Speaking of technologies that could benefit from a credit card or a different way to accept currency…

      Glad your conversion from US Bank to Schwab has worked out for you too!

      Bert

  7. Hey Bert,
    Good for you, glad it is working out well. We have also been banking online for years now and we like it. The Dutch bank we are with, ING, still has a few branches around. But I cannot even remember the last time I visited one, could have been as long as 10 or 15 years since we last visited one.
    Cheers and have a great weekend!

  8. Real talk – I wouldn’t even know what to do if someone handed me a check. Nor do I know how to deposit cash at a branch. Maybe I should check one out, if only for some sort of retro experience.

    • hahaha I can’t think of the last time I filled out a deposit slip at a branch. Even when I went to the branch, I barely wrote out the deposit slip. I just handed it to the teller and she usually completed all of that for me. Let me know how your “old timers” experience goes if you decide to go to the branch. Make sure you get the free cup of coffee!

      Bert

    • Well, when you have deposits over the FDIC limit, we are talking about a completely different ballgame here. I would do the same and make sure I have all of my accounts in as many banks needed to make sure I am below the FDIC limit. But at this stage in my life, that’s not even on the table yet.
      Bert

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