Top 5 Alternatives to Traditional Banking

General Course: Digital Banking Bas...
General Course: Digital Banking Basics-MPS

Bank savings accounts have started to lose their charm with most of them still offering pretty low interest rates. Moreover, as more and more banking services have started to surface, the protocols for account opening have become less lenient resulting in many applicants being denied a basic bank account. It is quite common that more and more people are looking for alternatives to traditional banking.

That is why the majority of us have become interested in looking for alternative services that let us keep our savings apart and allow us to share funds with other accounts at the same time. In this regard, here are the top 5 options that you must consider in the future.

Peer to Peer Money Transfer Services

Such services let you create an account either on the website or through their mobile app. They have become quite popular because of easy accessibility. You can conveniently send and receive funds on Cash App and other similar platforms with full security.

These applications can be downloaded on mobiles and used whenever you are on the go. They will require your full name, email ID and contact number for registration. Moreover, they are handy because they save you from the ordeal of visiting a bank or money transfer center whenever you have to send funds to another account. These services are safe and quick and hence are a worthy alternatives to traditional banking.

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Online Bank Savings Accounts

There are many banks that operate online only. These can serve as a perfect solution when you are not able to access traditional bank accounts for some reason. Luckily, they usually offer higher-yield APY and provide efficient customer support service as well so you really don’t have to worry about not being able to access a physical branch.

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Bank Accounts Typically Meant for Customers with Bad Credit

Another interesting service is that of bank accounts that don’t use Chexsystems and therefore allow even the customers with poor scores to open an account with maximum leniency.

They are targeted towards users who wish to improve their credit standing but are having trouble getting bank approval. Second-chance bank accounts are quite helpful as they offer almost all the features that traditional banks do but with lower levels of scrutiny. These are great alternatives to traditional banking particularly for people who struggle with approvals.

Cash Management Accounts

They are also known as non-bank financial service providers that can be helpful to new start-ups as they offer a handsome combination of checking account as well savings account.

You can take them as a hybrid bank account that partners with some other leading banks to make your funds FDIC-insured and easily accessible whenever needed. A major advantage is that they are remotely available just like online-only bank accounts. They are a good platform to stash your savings although they do not support debit card or ATM use. Such accounts when used wisely are perfect alternatives to traditional banking.

Certificates of Deposits

CDs are a different sort of alternative to savings accounts. They let the certificate holder earn specific interest till a specific date is reached. When the amount has to be taken out. This could be anywhere from 5 or more years.

The solid interest rate is a clear advantage that certificates of deposit have over other means of savings. Since you will be putting aside a chunk of money that cannot be withdrawn before a set date, you will be able to resist careless spending easily.

Wrap Up

You can do a lot about money management and savings. Even if you are not able to open a traditional bank account. The only important thing is that you should be aware of the right options and be able to choose the one that suits you the most. Look into a few choices that we have discussed above and maybe you will find the right match. Alternatives to traditional banking are available, but the customers should exercise proper discretion while chosing.

Garima Tomar

Senior Software Development Analyst at an IT firm

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