Credit union vs online bank for checking?

I've been using my local credit union for everything (checking, savings, car loan) for about 8 years. The people are great and I like walking into a branch, but my savings rate is 0.75% APY which is painful compared to what you all talk about here.

I'm thinking about opening an online bank for savings but keeping my credit union for checking. Is that a common setup? Or should I just go all-in on an online bank?

I guess my concern is... what if I need to deposit cash? Or get a cashier's check? Or talk to someone face to face? Online banks can't do any of that right?

This is exactly what I do! Credit union for checking (I need branches for occasional cash deposits and my credit union has great auto loan rates) and Ally for savings.

It works perfectly. I transfer money between them via ACH and it takes 1-2 business days. I keep about $2k in the credit union savings as a buffer and the rest goes to Ally at 4%.

The only annoying part is having two separate logins and apps. But you get used to it.

Keep the credit union for:
- Checking (free checks, branch access, ATM network)
- Auto loans (credit unions almost always beat online banks on loan rates)
- Anything that requires physical paperwork

Use online bank for:
- Savings (way better rates)
- CDs if you're into that

Best of both worlds honestly.

Just switch to an online bank entirely. The "I need a branch" thing sounds important until you actually think about how often you use it. When was the last time you walked into your credit union? Once a year? Twice?

Cash deposits: most online banks accept mobile check deposit. If you receive cash frequently, that's a different story, but most people don't.

Cashier's checks: you can get these from Ally, they mail them to you. Takes a few days but when is the last time you needed one urgently?

Talk to someone: Ally has phone support. Fidelity has phone support. You don't need to sit in a branch.

I think the split approach (credit union checking + online savings) is the most practical for most people. Going fully online works for some but there are legitimate reasons to keep a local account:

- Cash deposits. Yes some people still deal in cash. Landlords, side gigs, selling stuff at garage sales. You can't deposit cash into Ally.
- Notary services. Many credit unions offer free notarization. This comes up more than you'd think.
- Wire transfers. Some situations require wire transfers and they're easier to do in person.
- Fraud resolution. If something goes seriously wrong with your account, being able to walk in and talk to someone is genuinely valuable.

I keep a checking account at a local credit union with about $1,500 in it. Everything else is at Ally. The credit union is there for the edge cases.

The 0.75% savings rate at your CU is bad though. Definitely move your savings to an online bank. That's an easy win.

i did exactly what jenny described about 2 years ago. kept my credit union for checking, opened ally for savings. zero regrets. the extra interest adds up fast

my credit union savings was 0.60% lol. thats basically nothing on $15k. now im earning 4% at ally which is like $50/month in interest. not life changing but its free money for basically no effort

Ok I think the split approach is what I'll do. Keep the credit union for checking and my car loan (they gave me 4.2% which I don't think I could beat anywhere) and open Ally for savings.

I do deposit cash maybe once a month from some side work so going fully online wouldn't work for me. But there's no reason my savings needs to be at the CU earning almost nothing.

Thanks everyone. Going to open the Ally account tonight. Can't believe I've been leaving this much money on the table for 8 years haha.

@TotalReturnGuy I actually go to my credit union like twice a month so it's not as rare as you'd think for everyone!