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3 Best Alternatives to Traditional Banking

27 Feb 2019   #Bitcoin

There used to be a time when the traditional banks were the safest way to go about storing your money. However, due to the banking royal commission, a lot of people are turning away from institutions, and are seeking out other ways to manage their personal funds.

This is a trend of the modern age when alternatives to traditional banking keep appearing. As such, the younger generations are especially prone to seeking out different solutions.

Of course, there is always the option to stash your cash under the mattress and hope it will remain safe there. You will not see any interest, but you will also not have to deal with account keeping fees either. However, as mentioned, there might be other interesting and even profitable solutions.

So, if you are ready to say goodbye to a traditional bank (or if you already did so), here are your options regarding what to do with the cash.

Cryptocurrency investments

Most people have probably already heard of cryptocurrencies, Bitcoin, blockchain technology, and similar high-tech sounding terms. It has been a decade since this technology came to life and a few years since it started gaining worldwide popularity.

Even so, it might still be confusing to many, so let's quickly break it up. Cryptocurrencies are a new form of money which comes as digital cash. Bitcoin is the prime example, and the first cryptocurrency to see the light of day. It is decentralized, meaning that no centralized authority or institution has control over it. Instead, it is managed by the community. As for the blockchain, this is the technology that underlies cryptocurrency.

Due to its decentralized nature, high speeds, universal availability, and a certain level of anonymity (which is really more like pseudonymity), Bitcoin took the world by storm and inspired the creation of countless other cryptocurrencies known as altcoins. While Bitcoin, as well as many other coins, aim to be digital cash — some of the altcoins have different goals in mind, such as fueling development platforms, disrupting countless industries, and changing the world of business.

For the time being, cryptos are popular among regular people, and a handful of countries has accepted them. Most, however, did not, and it should be viewed as an emerging trend which currently still lacks regulations. As such, they have yet to reach mass adoption, but many believe that the day will come when people will be able to pay for pretty much anything via crypto. Interested yet?

P2P lending

Another good application for the money you own is to use it in P2P (peer-to-peer) lending. In recent years, a lot of platforms emerged with the goal of connecting borrowers and lenders directly. There is no need to go to the bank and pay their fees, simply connect directly to the lender/borrower and do your business at much lower interest fees.

There are risks here as well, of course, so be cautious and always check the fine print, the interest rate, and whether the service you're looking into has the necessary licenses.

Credit unions

Finally, there is another option, which is considering a credit union. For all intents and purposes, they are just as safe as any traditional bank, with the difference being in the fact that these are customer-owned banks.

Their popularity has also grown in recent years, with customer-owned banks usually being made up of credit unions, building societies, and mutuals. However, they are still a part of the finance sector, so potential acquisitions and merges remain a possibility.

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