Sure, starting to bank online is A Thing I Recommend, but I’m not naive: I know it can feel like a pretty big step for a lot of people, especially since it can seem like this big black hole of “How?!” questions.
How do I actually sign up?
How do I switch over all of my stuff?
Should I switch over all my stuff?! (Nope, not always.)
How do I withdraw money?
How do I get cash?
So if you’re still stuck on step one of my ten things millennials need to do with their money – starting to bank online, even if it’s just a high-interest savings account – here’s literally everything you need to know. And yes, that includes when to keep your offline bank around, because there are just some things that can’t be done online.
Fun fact about me: I also have an offline bank account I happily pay for, because it makes my life so much simpler in very specific ways.
But hey, we’re here to talk about online banks – so let’s get started!
Step 1: Pick a Bank Based on Your Needs
Duh, right? Like, of course your first step is to pick the bank you want to sign up for – but when you start online banking, there’s one question you need to answer that will make your banking life a whole heck of a lot easier.
What do you need to use it for?
There are a lot of things banks do for us, and depending on who you are and how you use your bank, some online banking options will be a better fit for you than others. If you only really want online banking for the super-sweet interest rate on your savings account, that’s cool! And if you’re looking for a full-service, can-handle-all-your-banking option online, you’ll need to look at a wider range of things before choosing a bank.
Personally, my biggest worry with online banking was the cash thing.
I rarely use cash, but uh, you can bet that during garage sale season I don’t want to pay $2 every time I withdraw garage sale money – which is why I made sure my online chequing account with Tangerine had free ATM use at any Scotiabank before I dove in.
And speaking of bank fees, there might be some things you just can’t get, or can’t get easily, when it comes to online banking.
If you need a business account, or international banking, or certified cheques? You’ll want to plan for a combo platter of some online, some offline banking to handle your money. That’s what I do, because I need a US dollar chequing account I can easily access in Canada. That’s most easily done with an offline bank.
I made a quick checklist to help you figure out what type of bank you’re looking for, based on how you’ll need to use it.
That checklist is part of a printable worksheet I made for you guys, to help you take the stress out of this whole online-banking thing. Get access to the full worksheet to plan your own online banking adventure right here.
Step 2: Sign up
Once you’ve picked a bank (or a combo platter of banks) that will hit all of your checklist of Things You Want From a Bank, it’s time to sign up for the online parts. Luckily, almost every online bank signup form will be…
- Totally in your comfort zone if you’ve ever signed up for an online service before
- Do-able from your couch and your sweatpants
- Done in under 10 minutes
Seriously, that’s it. How easy was that?
To make sure you actually commit to doing it this time (hi, I am the world’s biggest procrastinator, what up) set yourself a deadline to actually sign up.
Yes, in writing.
Yes, I think this step is so important that I included a portion of the worksheet to set yourself a deadline. (Grab your copy of the worksheet here.)
Step 3: Confirm your account-slash-identity
Since these banks are online, some of them need you to go a step further to prove sure you’re Actually You, not some anonymous internet troll. Banks aren’t into that, and since online banks are just as legit as regular banks, they have to hit the same standard of making sure you’re a real human as a Big Bank would.
You’ll probably have a few options to confirm your identity, and which one you choose will depend on the bank you’re signing up for and what they offer.
When I signed up for Tangerine, I had to deposit a cheque from my current, physical bank – but I could do it by taking a photo of the cheque on my phone, which was sweet. It turns out you can also go verify your identity at a post office, which like… the more you know.
And if you’re sitting there like ugh, cheques, whyyyyy, I feel you. But you gotta do it, so cool your boots with the cheque-hate, and accept that this is the price we pay for stopping money launderers.
Or like… not getting accused of being money launderers.
Step 4: Connect it to your existing bank accounts
This step might be part of the making-sure-you’re-a-real-human part of things, or it might be a separate step, but if you want to make the transition to an online bank easy-peasy, you’ll need to connect it to the account you use for your day to day banking right now.
Once you’ve done that, moving money to and from the online bank will be a piece of cake, and you’ll usually be able to see how in the pay-and-transfer options.
So no, you don’t need to worry about money getting stuck in the mysterious online “bank” – it’s just as easy to withdraw money as it is to put it in.
Step 5: Decide what you want to use it for.
Now here comes the fun part: deciding how much or how little you want to use your online bank right now. And pro tip: you can change your mind later!
If you chose the bank because it’s great for savings, the same reason I set up an account with EQ Bank, you’re pretty much golden. You’ve got your accounts linked, you should have no problem transferring money in and out, easy peasy. You can walk away with a solid A for online banking like some kind of millennial money rockstar.
If, on the other hand, you want to go All In and dive further into the world of online banking?
Follow me down, my friend. And don’t forget your worksheet, because this is where it gets beyond useful.
Step 6: Transfer your recurring payments
If you’re planning to switch most of your transactions to an online bank like I did, can I just say, kudos?! It’s great and I love it. But it’s also not something you need to, or should try to, do overnight.
Instead, you’ve got a few steps ahead of you to make sure it goes smoothly, and the first is to go back through your past few months of transactions and look at everything that came out of your account automatically. I’m talking bill payments, your gym membership, automatic savings contributions (because I know you must already automate your savings, right?!) and more.
Make a list of every single payment, because those are all going to need to be switched over. That might mean contacting the organization and updating your payment details, or just manually making the switch yourself if you can.
This is going to be the most tedious and time-consuming part of the whole process, I’m not even going to sugarcoat it.
If I were to shift everything over right now, I’d have to change my direct deposit payment info with my insurance providers (multiple), my fancy gym, multiple online services and Paypal. Those are all the payments that I’ve authorized to come directly out of my chequing account.
To make the process easier, grab that printable worksheet and the list you made of all of your transactions. Then, go through and make the shift to have them come out of your new account one by one – and for your own sake, keep track once they’re done.
Try to tackle one pre-authorized contribution every day until your list is fully moved over to your new bank.
Step 7: Get your recurring deposits moved over too
Now that you’ve got the money-for-other-people stuff sorted, you need to handle the money-for-you stuff, like paycheques and direct deposits of other kinds.
Since all of your recurring payments are going to come out of your new online bank account, you’ll want to make sure that your recurring money gets added to it ASAP as well. The big one for most people will be talking to HR, and having them switch your direct deposit info. Unless your HR department is besieged by the flu or something, this should be easily doable before your next paycheque hits.
If you’re self-employed, and you get paid from a variety of fun digital systems, make sure they’re all updated with your new chequing account details too. You go, HR-slash-everything department!
Step 8: Hold on to your regular account
Wait… am I actually advising you to hold on to your old bank account even though you just put all that effort into getting everything switched over?
Oh heck yes I am, and here’s why.
It’s a perfect safety blanket, and not only in the feelings way.
If you’ve potentially forgotten one lone direct deposit, or direct withdrawal, you’ll be happy when you don’t get hit with extra fees or miss a payment because you totally blanked on that one last thing. To avoid exactly that situation, leave a bit of money in your old account for at least a month just to make sure all systems are a go.
Plus, this gives you time to fall as in love with online banking as I have, and it means you don’t have to make any changes until you’re really sure about them.
Can I get a high five?
Well sure, here you go – but why?
Because friends? That was the last step.
You are the proud new owner of an online bank account that is fully, 100% functional.
Do you feel like a tech magician?! Because you should.
Ok, so maybe, quite possibly, you’re still at step one, because you didn’t do all of this while reading this post, or keep this tab open for months while you tackled each step. That’s cool. Here’s what you should do right now.
Download the printable worksheet to keep track of every step you need to take during your transition to an online bank, with places for you to fill in your own personal lists of transactions to switch over, bill payments to connect and more.
It’ll keep you hella organized, and make this entire process seamless no matter how far you want to take it, or which bank you want to switch to, or how much or little you want to use online banking.
PS. If you want to listen to the story of how I got started with online banking, and then did all of my other money things, I’m over on the Mo’ Money Podcast with Jessica Moorhouse today! It’s one of my fave podcasts ever and I’m a little bit freaking out about it.