What Is Online Banking?
Online banking is a system by which a banking customer can conduct bank transactions using the Internet. The movement of banking into the online world was inevitable — as soon as the Internet became ubiquitous it was only a matter of time before we handled everything (even our personal finances) on the Internet.
Online banking means we have one less reason to leave the house. With online banking, you can do everything you would normally do at your bank from the comfort of your computer. Make deposits, transfer funds, and even pay bills using your Internet connection. About the only thing you can’t do with online banking is make a withdrawal — it’d be nice if our printers could spit out money, but the technology’s just not there yet.
Benefits of Online Banking
The main purpose of online banking is to create convenience for bank customers. Rather than waiting for a bank statement to come in the mail, you can access all of your bank statement information right in your web browser. You can check your account balances 24 hours a day, seven days a week. In general, your Internet bank will provide you with login details (username and password) and the URL you should use to log on.
Another big convenience factor with online banking — security. You can catch any banking discrepancies on your various accounts right away and deal with them well before you could if you were relying on paper statements. You don’t even need to be at home on your own computer — safety features allow you to access your account from any computer in the world. If you have Internet access, you have access to your bank.
If you choose to pay your bills online through your bank, you will find yourself writing far fewer checks. Not just paper checks, but the cost of postage stamps and the pain of walking down to the mailbox are all gone. Online bill pay is one of the most convenient aspects of online banking — simply enter the amount of the bill to be paid and the funds will be automatically deducted from the bank account of your choice. Even better news — the cost to the bank for providing these online services is low, so that savings is passed on to the consumer. Sure, some banks charge a fee for online banking, but it is usually extremely low. When you figure in the cost in time spent standing in bank lines or dealing with crotchety tellers, the cost of online banking is justified.
Downsides of Online Banking
The most secure Internet connection in the world is still vulnerable to hacking or interference. Since online banking depends so heavily on the Internet, outages and security breeches can be a serious problem. Sure, your information is insured and encrypted, and the chance that your online bank account will be compromised is slim, it does happen. While hacking and irresponsible online behavior can be a problem, rest assured that reputable online banks have lots of security features and stopgap measures to prevent fraud.
Another downside is the lack of personalized service. Maybe you like going in and dealing with the same bank teller week after week — with online banking, you may never see a teller’s face again. On the upside, any time you need to make a cash withdrawal or if you have to deposit cash or checks, you will be spending some time at the bank or at the bank’s ATM. Don’t fear — you’ll probably still have plenty of face to face contact with bank representatives.
In most people’s eyes, the benefits of online banking outweight the few risks and downsides. Online banking is no longer the wave of the future — it is just the way most banking is done these days. Contact your bank to see what online banking options they offer and join the 21st century.
For more information related to online banking and Internet bank accounts, see some of the following pages: