How to Withdraw Cash From an Online Bank

Online banks generally pay higher interest rates on deposits and charge fewer fees for services than traditional banks. On the other hand, online-only banks can’t compare to brick-and-mortar branches of a traditional bank when it comes to dispensing physical dollars and cents in the form of bills and coins. Online bank customers who need cash do have options, however, including using debit cards for cash-back transactions at participating merchants, requesting paper checks and arranging wire transfers.

A financial advisor can help you compare different banking options for your financial plan goals.

Ways to Get Cash From Online Bank Accounts

Traditional banks often fall short when comparing fees charged, interest paid and other features offered by online competitors. But while online bank customers typically enjoy higher returns and lower costs, they’re likely to be less happy if they need to withdraw cash from their online accounts.

Lacking physical branches and in some cases ATM networks, online banks may require their customers to go through some extra steps in the event they have to have actual folding money. However, even if it’s sometimes more complicated, getting cash from an online account can be done. Here are seven common options for getting cash from an online bank:

Debit card. Some online banks provide their deposit customers with debit cards that can be used to electronically pay for purchases, similar to credit cards but using funds in their accounts and involving no interest charges. Many retail merchants, such as grocery stores, will allow customers to get cash back over and above the purchase amount when using a debit card. Some merchants charge fees for this but many will provide up to $100 cash back without cost.
ATM transaction. Some online banks belong to automated teller machine (ATM) networks that allow their customers to make withdrawals from their accounts using bank-issued debit or ATM cards. Some other online banks that don’t belong to ATM networks will reimburse customers for any ATM fees incurred for withdrawing cash.
Paper check. If a debit card cash-back or ATM transaction won’t work, you can ask your online bank to mail you a paper check for the amount of cash you need. Then you can cash the check at a number of locations, including major retailers. You may have to pay a fee to cash the check. And you’ll need proper identification and have to wait for the mail to deliver the check using this approach.
Account transfer. If you have another account at a bricks-and-mortar bank, you can order your online bank to transfer the funds you need to the traditional account. Usually, this won’t cost you anything and it will only take a day or two for the funds to show up in your traditional account. After that, you can use an ATM or go to one of the traditional bank’s physical branches and withdraw the cash in a transaction with a human teller.
Wire transfer. If you need cash faster than the day or so, you may want to consider instructing your online bank to transfer the funds via wire transfer. This can sometimes get the money into your traditional account and available for withdrawal somewhat more quickly, but it will cost anywhere from $10 to $30.
Transfer money to linked accounts. This method works well for people who have multiple account types with differing fees and interest rates. Essentially, you can set up automatic transfers from your online bank account to things like credit cards, high-yield savings accounts, or certified deposits (CDs). Regularly moving funds to these accounts will allow you to use the cash elsewhere.
Use cash-back options. One of the easiest ways to get money from an online bank account is for the bank to give it to you directly. Look for accounts that offer cash-back promotions for meeting account minimums, making referrals, or for signing up during a limited-time offer.

Frequently Asked Questions (FAQs)

Do Online Banks Use ATMs?

Yes, online banks will allow customers to use ATMs but there are some conditions you’ll need to be aware of before making the transactions. The major concern is ATM fees. It’s important to check with your online bank and see if they are affiliated with an ATM network such as AllPoint or MoneyPass. Using an in-network ATM will be a no or low-fee transaction but going out-of-network could cost you a few dollars in fees.

Does the Bank Reimburse Out-of-Network ATM Fees?

Whether or not your bank will reimburse you for out-of-network fees depends on who you bank with and what type of account you have. Generally speaking, most online banks will reimburse you for third-party out-of-network fees charged by the ATM operator. This does not mean the bank won’t charge you a fee, or that every fee is reimbursed. Some banks place limits on how many fees per month. For example, Alliant will only reimburse the first $20 in fees for you.

Are There Excessive Transaction Limits?

Yes, some banks do have excessive transaction limits for certain types of accounts. This practice is rooted in a Federal Reserve rule known as Regulation D which placed withdrawal limits on certain account types, like savings accounts. It set the limit at six per month, but rescinded the rule in 2020. Still, many banks adhere to the limit so it’Ss important to check the account details if you anticipate needing to make frequent withdrawals.

Bottom Line

Online bank customers who need cash can’t go to physical branches to get it as customers of traditional banks can. However, they may be able to get extra cash back when using online bank debit cards to buy items at many merchants. Some online banks participate in ATM networks that let their customers withdraw cash. Others refund ATM fees incurred by customers using their online bank debit or ATM cards for withdrawals. Mailed paper checks offer another option. And online bank customers who also have traditional bank accounts may consider transferring funds electronically from online to traditional account and then withdrawing cash at a branch or ATM.

Banking Tips for Beginners

A financial advisor is well-equipped to help you set up your finances so you always have access to cash when you need it. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
There is more to choosing a bank than interest and fees. Banking customers also care about easy access to funds, 24/7 customer service, availability of mobile smartphone applications, user-friendly online interfaces and more. SmartAsset’s roundup compares what top banks can offer small businesses, students and savers.