dmitrinekol
Active member
Still setting foot inside an actual bank? Why not take advantage of online banking? Online banking doesn’t have to be intimidating — after all, millions of people deposit money and pay bills from a smartphone or computer.
If you haven’t quite taken the leap, we’ve put together a short guide to help you learn how to get started.
If you haven’t quite taken the leap, we’ve put together a short guide to help you learn how to get started.
Main Takeaways: Your Guide to Online Banking
- Online banking allows you to conduct your financial services fully online. Some banks have no storefronts and others offer extensive online services while still having physical locations.
- Benefits to online banking include convenience, speed, high interest rates, and more. This is all possible without having to spend funds maintaining a physical property.
- Drawbacks include safety, no face-to-face interaction, and more. This is caused by an inability to go into a store and speak with an employee.
- Setting up your online banking account is easy. What you are responsible for is making sure that an online bank, and the services they provide, fit your style of handling financials.
What is Online Banking?
Online banking is like traditional banking except all transactions are conducted through a financial institution’s website or mobile banking app.
You can do almost everything online that you could do standing in line at the bank. You can open checking and savings accounts, make deposits, withdraw money and pay bills online.
You’ll need a computer, smartphone or tablet if you’d like to bank online. Every time you log in, you’ll have to provide a username and password, and in some cases, you’ll have to answer a few security questions.
All of your banking information is accessible only by you and your bank.
Benefits of Online Banking
Online banking has a few perks. Before you jump into online banking, consider the pros and cons first.
Convenience. Banking from your phone or laptop is a huge time-saver. You can pay bills, check your balance and transfer money between checking and savings accounts with just a few clicks. One of the savings accounts we highly recommend is from Credit Karma. They currently offer one of the highest APYs on the market.
Higher interest rates. Online banks can pay up to 5 times more in interest than traditional banks, according to a study by DepositAccounts.
Instant notifications. You can opt-in for text message and email notifications, which will be sent to you based on your preferences.
For example, if your balance is negative or a large purchase is made, you’ll receive a text or email so you can monitor your account around the clock.
Always accessible. If you only use brick-and-mortar bank branches, you’re tied to their business hours, usually 9 a.m. to 5 p.m., and only a few hours on Saturday (most are closed on Sunday). Online banking is available 24/7.
No paperwork. Online banking doesn’t require you to fill out any paperwork, such as an application form, withdrawal slip or paper check. Most offer the ability to deposit checks by taking a picture from your phone.
Drawbacks of Online Banking
Since online banking depends on the reliability and speed of the internet, there are some drawbacks you may face related to that fact and a few others. Here are some other disadvantages you can consider.
Impersonal. You won’t get a warm, fuzzy personal experience when you bank online. You can still chat with customer service reps using the bank’s online chat or by calling, but you won’t be able to walk into a bank and see real people.
Some tech-savviness required. There might be an online banking learning curve. For example, you’ll need to know how to navigate online services, how to set up direct deposit online and how to download a mobile app.
Fortunately, a lot of banks provide tutorials so you know how to use online banking.
Data breaches are possible. Any bank (online or traditional) that conducts business online is vulnerable to cyber hackers. According to a study featured in ABA Banking Journal, nearly ¾ of Americans were more concerned about data privacy in 2018 than they were in 2017.
You can’t do everything online. There are times when personally visiting your bank makes sense, such as when you need to buy rolls of quarters, need a money order or certified check to pay for a large purchase or need to deposit cash.
In these instances, you’ll have to physically go to a bank branch or find the nearest ATM.
