Wells Fargo CEO Tim Sloan took over the company last year after the fake accounts scandal.
In 1960, Life magazine described a new Wells Fargo branch in San Francisco as having “such striking architecture that it is now a local tourist attraction.”
It was one of many “glass-and-metal palaces” that transformed the public’s perception of banks “from solemn financial cathedral into joyous playroom,” complete with 4% interest rates and prizes for new customers.
Fast-forward half a century and a different kind of banking evolution is underway. Traditional brick-and-mortar institutions face increasing competition from online-only banks that offer checking and savings accounts with fewer fees and higher rates. Of the 11% of people who switched banks in 2015, 19% of them joined an online bank while only 8% left one, according to consulting firm Accenture.
One of the most prominent online-only banks, Ally, signed its 1 millionth account holder in 2015 and reported that it added another 150,000 customers in 2016.
Many people still prefer traditional banks, but the continued growth of online banking has made one thing clear: That branch down the street is no longer the only place to keep your checking and savings accounts.
Different banks, different strengths
Online banks’ checking and savings accounts come with higher interest rates and fewer fees than those at traditional banks. Rates at top online banks can be as high as 1.20%, 20 times the national average of 0.06%.
Average rates at credit unions aren’t much better, according to data from the National Credit Union Administration.
Online banks also tend to offer more perks on their standard checking accounts. One example: unlimited domestic ATM fee reimbursements. Traditional banks occasionally offer the same, but often only on premier checking accounts that require steep minimum deposits — think $10,000 and up — to get monthly fees waived. These fees can be as…