Walking into a bank branch to talk with a teller is comfortable and familiar for a lot of consumers. You know that no matter what you need, the person behind the counter will be able to assist you. And, you will not have to jump through any technological hoops to get the assistance you need. Many individuals continue to visit physical branch offices because of this sense of comfort.
Yet, there is a newer form of banking that is getting easier every day and slowly overtaking traditional banking as the preferred method for handling one's money. Online banking is no longer intimidating for the average person, and it is much more convenient than driving to your local branch and waiting in line.
What Is Online Banking?
Online banking is a system that allows consumers to use the Internet to complete banking activities at home. Some online banks have no physical presence and are online only while others are traditional banks that also offer online banking.
Customers can perform bill payments, account transfers, stop payment requests, balance inquiries, and other routine transactions when they do online banking through traditional banks. Some traditional banks even offer online credit card and loan applications. Account information can be accessed from anywhere at any hour of the day or night.
Some online banks update information daily while others do it in real time. Information does not need to be reentered for similar subsequent checks once it has been entered once. And, you can schedule future payments to occur automatically. To simplify recordkeeping, many banks allow for file transfers between popular accounting software packages and their program.
There are a few drawbacks to online banking. It takes a little work to setup your online account and get used to it. Plus, some banks have been slow to roll out online banking and have limited functionality. Account holders may have to put in check requests up to two weeks before the payment is due to make payments online. This can be annoying, especially when the bank takes the money out of the account the day the request is received.
What Are the Benefits to Online Banking?
Doing your banking online is advantageous for several reasons. Online banking has a lot going for it whether you want to cut down on paper statements to help the environment or you are trying to carve out a little additional time for other activities.
Convenience is the main benefit to doing your banking online. Online banking means no standing in line, no rushing to the bank before it closes, and really no trips to the bank at all. You can use any mobile device to access your bank just about everywhere, 24 hours a day, seven days a week.
Checking your account balance used to mean visiting an ATM or calling your bank. Now, you have this service at your fingertips. From the comfort of your home or possibly your phone, you can make loan and credit card payments, view your balance, carry out a variety of other transactions, and transfer fund with online banking.
With traditional banking, you used to have to wait for your monthly statement to come in the mail before you could review your transactions. Thanks to online banking, you can get account information that is up to date. And, as mentioned above, this also eliminates the need for paper that could potentially end up in landfills.
Few people realize what online banking does for their financial IQ. Overall, it will give you a better understanding of how your account works. You can add a layer of transparency to the banking process with online banking, including information on how long it takes for a check to be processed and when deposits will be available.
When you turn to online banking, you can learn whether direct deposits are credited the next business day or immediately. And, perhaps best of all, it can dispel or confirm any suspicions you may have about your debit or credit card being billed improperly.
What Is the Difference between Banking with a Mobile App and Online Banking?
The main difference between online banking and banking with a mobile app is how you access your account information. You open up your computer's Internet browser and visit the website for your financial institution to access online banking. On the other hand, you need to download the app for your bank to your tablet or smartphone to access your banking information via a mobile app. You are accessing your bank account information over the web in both instances. Each will also likely offer you similar information. Your financial institution will dictate what information is available.
The ability to deposit checks is one helpful feature that you are unlikely to find with online banking, but that is often available through a mobile app. Many mobile banking apps use your tablet or phone's camera to collect the check information and complete a deposit without ever leaving your couch. If you do not have time to make it to the bank, this can come in handy.
Is Online Banking Expensive?
As many people are considering making the leap from traditional banking to online banking, they often wonder if there are additional monthly fees or per item fees associated with opening up an online banking account. For the vast majority of banks, there is not. In fact, some banks may have fees for traditional banking that are waived with online banking. This is because it is generally less expensive for banks to have consumers conduct their business with a few clicks rather than taking up the time of a teller.
That said, there still are some tangential fees associated with online banking, such as fees charged when you request check copies, initiate stop payments, perform outgoing transfers outside of the country, or other similar services. These fees are also found with traditional banking.
Now that you have a strong understanding of how online banking works, you should be able to make an informed decision on whether or not it is right for your purposes.