The vast majority of Americans still rely on traditional banks that offer the benefit of in-person banking services, but some of the best online banks provide their own advantages. While only 27% of Americans use an online-only bank as their primary financial institution, most (71%) prefer to manage their accounts using mobile or online banking tools, according to a 2023 survey by the American Bankers Association. Online banking with 24/7 account access, competitive yields and lower fees is here to stay.
But what about when you need real, physical dollar bills? Despite the shift to contactless payments, there are times when only cash will do. In fact, 18% of purchases in the US are still made with cash, according to Federal Reserve Financial Services. (PDF)
The good news is that it’s fairly easy to access cash from an online bank.
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How to withdraw cash from an online bank
Though big banks tout their massive networks of physical branches and owned and operated ATMs, online banks don’t have that kind of real estate. It’s part of the reason they can offer better rates: Lower overhead costs translate to more perks for their customers. The trade-off is that you won’t have in-person service.
If you won’t miss having access to a brick-and-mortar bank, you can use these four options to get cash from an online bank account.
1. Use your debit card at an in-network ATM
Online banks typically issue debit cards with checking accounts and money market accounts. (However, your withdrawal options may be limited with savings accounts, which usually don’t offer debit card access.)
Online-only banks don’t operate their own ATM networks. Instead, most partner with other networks to meet their customers’ cash needs. For example, Quontic Bank offers fee-free access to more than 90,000 ATMs in the Allpoint, MoneyPass and SUM networks. Quontic also participates in the Citi ATM Community Network, so you can withdraw cash with no fee at select Citibank branch ATMs. You don’t have to scour every ATM to see if it has the correct logo -- online banks typically display nearby in-network ATMs on their websites or mobile apps.
Some online banks also offer reimbursements for out-of-network ATM charges. However, you might be capped at a maximum amount per month. Synchrony, for example, reimburses up to $5 per statement cycle for out-of-network ATM fees, which one or two extra cash withdrawals can easily eat up.
2. Use cash-back options
If you can’t find an ATM, you can get cash back when you pay with your debit card at checkout at many retail stores, such as Kroger, CVS, Walgreens and Costco. Getting cash back at the point-of-sale terminal is a free alternative to high out-of-network fees. But keep in mind that most stores have cash-back limits, so you may be able to get only $100 or less.
3. Write a check
You can withdraw money from your online bank account by writing a paper check if your account comes with checks. You can typically visit any bank branch to cash the check, but some banks may not cash checks if you aren’t a customer. In addition, some grocery stores and check-cashing services will cash your check for a fee.
4. Transfer money to a linked account
Opening an account at an online bank can serve as a secondary banking option to your accounts with a brick-and-mortar bank. By having accounts at multiple banks, you can take advantage of the benefits of both worlds.
This is especially helpful if your online bank doesn’t have an extensive ATM network. Linking your online account with a traditional bank account allows you to access a larger ATM network or visit a branch location when you need cash. Keep in mind that transfers between externally linked banks can take several business days, so you may need to plan ahead when using this option.
Pros and cons of getting cash from an ATM with an online bank
Pros
Access to big ATM networks: Some online-only banks offer extensive ATM networks like their big-bank counterparts. For example, Chase operates over 16,000 ATMs, while the Allpoint network includes more than 55,000 ATMs.
ATM reimbursements: Some online banks offer unlimited ATM reimbursements when you withdraw cash from an out-of-network ATM. But remember that not all banks reimburse out-of-network fees, and some reimburse up to a certain amount.
Cons
Less convenient: Some online-only banks have fewer in-network ATMs, so you’ll be stuck paying a fee at an out-of-network ATM. Otherwise, you’ll have to get cash back at a retail location or write yourself a check.
Costly out-of-network fees: If your bank doesn’t reimburse out-of-network ATM fees or you exceed the allocated threshold, the charges can be costly if you withdraw money frequently.
Things to consider when withdrawing cash from an online bank
If you’re comparing online-only banks and want to be able to withdraw cash, here are some key questions to consider.
- How big is the ATM network? First, make sure the account comes with a physical debit card. Then, look up how many no-fee ATMs are available and, most importantly, how many are close to where you live and work.
- Does the bank reimburse out-of-network ATM fees? Some banks impose a fee if you withdraw money from an out-of-network ATM. If you withdraw cash frequently, find a bank with unlimited fee reimbursements or a large network of ATMs in your area. Online banks like Axos and LendingClub offer unlimited out-of-network ATM reimbursements on most accounts.
- Are there excessive transaction limits? You don’t need to worry about excessive transaction fees with checking accounts, but money market and savings accounts are a different story. Most money market and savings accounts limit the number of withdrawals you can make within a single statement cycle. If you exceed this number, you incur an excessive transaction fee.
- Are there multiple options for withdrawing cash from an online bank? Not every bank offers check-writing privileges, so review your options before opening an account.
FAQs
Online-only banks don’t own and operate their own ATMs. Instead, many of the machines they use belong to partner networks such as Allpoint and MoneyPass.
Yes. Most online banks allow you to withdraw cash from a checking, savings or money market account via any ATM. But before you do, confirm whether the ATMs are part of your bank’s free network or if the bank reimburses out-of-network ATM fees.
Many online banks don’t support cash deposits. Instead, deposit options are typically limited to ACH transfers, wire transfers, payment app transfers and mobile check deposits. SoFi Bank, for example, allows you to use the Green Dot network at checkout to deposit cash at participating retailers. However, you’ll typically pay a fee to the merchant for each cash deposit.
Most online banks are federally insured by the Federal Deposit Insurance Corporation up to $250,000 per person, per institution -- the same level of protection you get at a traditional FDIC-insured bank.
