Whisper it quietly, but it appears as though the classic bank account is becoming increasingly dated with every passing day.
Of course, we’ve already seen the wider banking industry transformed through the process of digitization, with this trend having been accelerated during the coronavirus pandemic.
Overall, it’s thought that 40% of customers now use digital banking more than they did before the first lockdown, and this is undoubtedly changing how we look to manage our cash.
In this post, we’ll address the challenges associated with the classic bank account while asking how you can better manage your cash in 2021.
The Disadvantages of the Classic Bank Account
When it comes to opening a classic bank account, this can be a challenging and time-consuming practice that’s becoming increasingly outdated in the digital age.
Firstly, opening this type of account will usually require a basic credit check, which creates an instant barrier for individuals who may have poor credit or struggled to manage their finances during the previous six years.
This lack of accessibility is a significant drawback, as is the amount of time that can be taken to transfer funds from one account to another. This is particularly pertinent when sending money to an account registered to another banking organization, where transactions can take up to five days to complete in some instances.
On a similar note, traditional bank or checking accounts don’t offer any viable interest. At the same time, they may also be subject to a variety of maintenance fees and transaction charges (particularly when transferring cash overseas or completing international payments).
It can also be argued that classic savings accounts are largely restricted in the digital age, particularly as they tend to yield a lower interest rate than money market alternatives.
Many traditional savings accounts also come with stringent withdrawal restrictions. They won’t be equipped with a debit card, making them relatively inaccessible for those who want to use them with relative freedom.
Instant Bank Accounts – How to Manage Your Money More Effectively
Of course, we’ve all grown accustomed to these drawbacks over time, not least because there has historically been no viable alternative to traditional bank accounts.
However, this is no longer the case with brands such as Monese offering accessible, instant online accounts that offer significant value in the digital age.
With an instant online account, you can process quick deposits and transfers, the latter of which may be completed immediately through third-party financial platforms. It should also be noted that you can instantly open this type of account (as the name suggests), enabling you to get started with managing your money in a matter of minutes.
Ok, but how do these benefits translate into better and more efficient money management? Well, aside from the immediate access that allows for real-time decisions and transactions, instant accounts also minimize transaction fees and enable you to retain more of your hard-earned cash.
Similarly, this type of financial vehicle creates a better and more localized money management experience, especially when dealing with international transactions or transferring money freely between similar accounts.
With the use of third-party technology and services mentioned above, instant account providers such as Monese also create a one-stop-shop for effective money management in the digital age.
This also has a huge and positive impact on reducing fees, which is a crucial consideration for anyone who has to operate on a tight budget.