What is Online Banking?
Many people have heard of online banking and most have a vague idea of what it is, but is it really? Online banking provides bank customers the ability to perform many banking transactions on the internet or mobile device. The banking institutions recognized that more and more people have access to the internet and smart phones. The industry was challenged with how to can capitalize on this movement. Savvy bank customers are demanding banks deliver online and mobile services or they will take their business to a bank that does.
Advantages
There are numerous advantages to banking online. With online banking, customers can log onto their secured account, pay bills without purchasing stamps or driving to the post office, transfer money to another account, view real-time account activity, create monthly automatic payments, view cancelled check images and view other investments at the bank such as CDs or IRAs. Some banks offer an online service which will alert you about your account activity with through email or text messaging. In addition to online services, many banks still allow customers to deposit money at a branch office or make direct deposits.
The best feature about online banking is customers can access account information anytime of the day and anywhere there is an internet connection. This makes banking easy and convenient for the customer.
Disadvantages
The initial setup of an online account could take some time. Many traditional banks still require customers to come to the bank and complete paperwork prior to the setup of an online account. In order to register you will need to provide the bank with a valid ID and sign a Terms and Condition and a privacy statement. Once the account is setup there could be a slight learning curve. Most of the younger generation will be able to navigate easily around the bank’s website. Each banking institution’s website is different and navigating can be cumbersome.
The biggest disadvantage is trust. Many baby-boomers are distrustful of big banks, the internet, and especially sharing sensitive information online.
Getting Started
To establish an online account, first talk to a representative at your bank. They will provide you with the bank’s forms and website information. The bank will assign you a login ID and password. The first time you log into your account you will be required to change the bank assigned password.
Security
Website security is a battle fought every day. There are devious people in the world who want to get their hands on your banking information. Each bank has their own policy about how your personal information and money are protected. In order to help curtail this criminal act, never disclose your personal information to anyone you do not know or websites or emails you are not familiar with. Devious criminals will attempt to send an official looking email urging you to click a link and provide banking information or your account access will be suspended. Never click on these links. Always go straight to the bank website from your browser (not from your email) by typing in the full name such as www.bankname.com and enter your login ID and password.
One way to keep criminals on their toes is to change your password once a month. Your password should consists of letters and numbers and not be a family or pets name.
If you suspect fraud, immediately contact your banking institution. Federally insured banking institutions are obligated to replace any cash that is stolen from your account through fraudulent means.
Extras
Not all banks offer extra services with their basic online checking account. Typically a basic online account includes viewing account online, direct deposits, scheduled automatic drafts and ACH payments. Extra features include the ability to view cancelled check images, ability to make electronic bill payments, email alerts and incentives such as one free overdraft per year, reimbursement of ATM fees, cash back for items purchased using a bank card, 24 hours customer support, overdraft protection and waived fees for high minimum balance.
Things to Know
Typically when writing a check and mailing it to pay a bill, it will take approximately three to four days to clear. When you pay a bill online the funds are removed from your account immediately. This will require some cash flow management for the customer.
When deciding on which banking institution to use (if your local bank does not offer online banking) ensure you read and become familiar with all the fees associated with the account. Some banks will charge an online account a monthly fee if the balance drops below a certain level while other will charge a fee to pay bills online.
