Did you know that close to 95% of US households have at least one member with a bank account? These “banked” households, in turn, either have a checking or savings account. By contrast, the remaining “unbanked” don’t have any valid bank accounts.
Whether you belong to the former or the latter, you might want to consider opening a virtual bank account. We’ll give you insider details on what exactly it is and why you should get one below, so be sure to read on.
What Is a Virtual Bank Account?
A virtual bank account is a bank account that only exists online. It doesn’t come with a physical card or passbook. Even the institution that issues it may only be operating online.
Instead of a physical card or passbook, the account holder receives a virtual debit card. All transactions associated with the bank account then take place online. That includes opening the account itself, sending money, or making payments online.
Why Would You Want One?
If you don’t have a bank account yet but need one ASAP, you can create an instant virtual debit card account. That’s because many virtual banks allow you to set up one within only a few minutes. In most cases, you only have to fill out an online form and upload a valid ID.
That brings us to another good reason to open a virtual account: convenience. Since virtual banks operate online, you can create an account right from the comfort of your home. You don’t need to go to a brick-and-mortar bank and stand in a queue for a long time.
Moreover, many virtual accounts offer instant debit card activation. From there, you can turn the cards on or off in real-time. You can check out this guide to learn more about the card activation process.
Virtual bank accounts also provide a more secure banking option in the form of ghost cards. If you need to make a payment but don’t want to share your actual bank card details, you can generate these cards. They have random numbers, so your account won’t be at risk even if the cards get hacked.
Remember: bank card hacking is prevalent and can put you at risk of fraud and identity theft. A study even found that at least 1.5 million US bank cards are for sale on the dark web. That’s a good enough reason to use a virtual ghost card.
What About Drawbacks?
Some businesses, especially local mom-and-pop stores, don’t always accept cards. One reason is that card payments cost them per transaction. So, they could end up paying at least 2% or 3% of the cost of their purchase to the card issuer.
For that reason, such businesses prefer cash, and some even only accept bills or coins. So, if you only have a virtual bank account, you may be unable to transact with these stores.
Another disadvantage is that you can’t access a virtual account offline. In short, you can’t make deposits, pay with it, or transfer money without an internet connection.
So, Should You Go Virtual?
Yes, it’s wise to get a virtual bank account, especially if you do a lot of online banking. However, you’d still want to open a traditional bank account so that you can always get cash from the ATM. By having both types, you can ensure you have access to your money at all times.
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