Turns Out You Don’t Need a Bank Teller. Here’s Why This Guy Banks Online.

Matt Hoffman poses for a portrait with his surf board.
Matt Hoffman, a biotech engineering consultant, of San Diego, CA does all his banking on his phone with Radius Bank, a card that allows him to take cash from any ATM without fees. Peggy Peattie for The Penny Hoarder

Matt Hoffman was frustrated with his bank.

Super frustrated. Dissatisfied. Unhappy.

A self-employed biotech engineering consultant, Hoffman travels all over the globe to work with clients. At one point, he was doing some work for a company in the United Kingdom and was getting paid through international wire transfers that were moving through a third-party intermediary bank.

But his checking account at Citizens Bank, a big national U.S. bank, simply couldn’t handle it. The money wouldn’t appear in his account.

With Radius Bank, Matt Hoffman has used ATMs in Indonesia, Panama and Mexico without incurring fees. Peggy Peattie for The Penny Hoarder

“I had an issue, and I couldn’t get it resolved,” says Hoffman, 34, who lives in San Diego. “I kept getting the runaround. When you talk on the phone with someone from one of these big banks, you can tell when they’re reading from a protocol or a script and they’re not even really listening to you.”

Scouting around for better options, he opened an account with an outfit called Radius Bank. He was attracted to the higher-than-average interest rates it pays on its savings accounts.

And his problem with the international wire transfers?

“Radius was able to just handle that with no issues,” he says.

That was nearly a decade ago. Hoffman stayed with his new bank and never looked back.

A Digital Evolution

Matt Hoffman logs into the Radius Bank website on his laptop.
Hoffman hasn’t stepped foot in a physical bank since moving to California. Peggy Peattie for The Penny Hoarder

Originally a small community bank based in Boston, Radius has remade itself into a virtual bank with a worldwide network of free ATMs.

“Our transformation to a state-of-the-art online bank was driven by the consumer, as their preference shifted the last few years from visiting traditional brick-and-mortar stores to demanding a digital banking experience that allowed them access to their accounts from anywhere,” said Chris Tremont, Radius’ executive vice president of virtual banking.

Keeping his money in a digital bank makes sense for Hoffman, who does most of his banking from his phone.

Existing mostly online, Radius has exactly one physical bank branch — at its headquarters in Boston.

Hoffman lived in Boston when he first started banking with Radius. Later, he moved across the country to San Diego, but he found it didn’t matter.

“There are no branches here, but I can do everything online,” he says. “I haven’t had to step foot in a bank since I left Boston.”

Radius is part of the NYCE ATM network, which is connected to 500,000 ATMs worldwide. Hoffman can withdraw cash or make a deposit at those without paying those annoying ATM usage fees. And if he has to pay an ATM fee anywhere, he gets reimbursed for it. No muss, no fuss, no problem.

“I travel around the world quite a bit,” says Hoffman. “I’ve used ATMs in Indonesia, Panama and Mexico, and I’ve never had a problem.”

If he needs to send someone a check, that’s easy, too. He does it online, on his checking account’s “Bill Pay” function. He types in who the check is for, the amount of money and the date. Radius mails a certified check to the recipient.  

A Healthy Savings

Matt Hoffman carries his surf board to the surf.
Hoffman is an avid surfer, and banking online frees up more of his time for the hobbies he loves. Peggy Peattie for The Penny Hoarder

Online convenience aside, what originally attracted Hoffman to Radius were the interest rates it pays out:

Radius pays 1.96% APY on savings accounts with balances of more than $25,000 and 1.5% APY on savings accounts with balances between $2,500 and $25,000.

Compare that to the average savings account, which has an interest rate of a measly 0.06%, according to CNN Money.

The savings account is especially appealing to Hoffman, because he’s an independent contractor.

Because he’s a freelance consultant, income taxes aren’t withheld from his paychecks. Instead, clients just pay him and send him 1099 tax forms showing how much they paid him. Then he sends his income taxes to Uncle Sam in a lump-sum payment once a year.

To pay his taxes, he sets aside money from his earnings in a high-yield savings account at Radius.

“I keep it in savings and earn interest on it all year,” he said. “I pay taxes at the end of the year, but by then I’ve earned interest from the money being in my account.”

If you’re interested in online convenience and earning more money from your savings account, it’s worth checking out Radius Bank to see if it’s right for you, too. It requires just a $100 minimum deposit to get started.

As for Hoffman, he finds that customer service is readily available via a phone call or online chat if he ever needs help with anything.

He’s never going back to getting the runaround again.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He should probably switch banks like this guy.

This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.