I Mostly Bank Online, but Here's Why I Keep $10,000 in a Brick-and-Mortar Bank

If you're someone who prefers to do your banking online, you're not alone. Data from Forbes reveals that as of 2022, 78% of U.S. adults preferred to do their banking online.

Meanwhile, I have my reasons for using an online bank. For one thing, it's convenient. I can deposit checks using my phone and pay bills without having to leave my couch.

But also, online banks tend to have less overhead than brick-and-mortar banks. Because of this, they're commonly able to offer more attractive rates on products like savings accounts and CDs. In fact, the rate I get on my savings account is considerably higher than what most brick-and-mortar establishments are paying.

But while I do the bulk of my banking online, and have for years, I still make a point to keep $10,000 in a physical bank with a branch in my neighborhood. Here's why.

It's all about having quick access to cash

One downside of using an online bank is that you can't walk in and access physical money when you need it. And that's why I can't keep all of my savings at an online bank. Rather, I make sure to keep around $10,000 in a savings account at a local brick-and-mortar bank. This way, if I ever need cash on the spot, I could walk in and take a withdrawal.

Now, you may be thinking, "In what scenario would this woman need thousands of dollars in cash right away?" But you'd be surprised.

Years back, we needed to do an expensive home repair that was going to cost us thousands of dollars. The repair was an emergency, and we couldn't put it off even for a few days.

The contractor we'd found quoted us one rate for using a credit card, another for using a check, and a third for paying with a mountain of cold, hard cash. And as you might imagine, the cash price was the lowest of the bunch.

In the end, we actually opted to use our credit card for a couple of reasons. First, we wanted protection in case something went wrong. Secondly, we stood to accumulate points on our reward credit card, which somewhat bridged the gap between the lower cash price.

But that was one actual situation that happened to us where we might have needed to withdraw a large amount of cash and hand it over. And so I make a point to keep a nice balance at a brick-and-mortar bank just in case.

A move you may want to consider

You don't necessarily need to keep $10,000 at a brick-and-mortar bank when you have an online bank that's paying you a lot more interest on your money. And if I'm being honest, that $10,000 is really an arbitrary sum my husband and I landed on years ago. So you definitely don't have to follow my lead there.

But if you're someone who banks online, it could still very much pay to keep a few thousand dollars at a physical bank. You never know when you might need cash on the spot, and this way, you buy yourself that option.