Online banking has quickly gone from just a novelty feature of brick and mortar banks to mainstream business as usual. Nearly every bank now offers some form of online banking with some banks existing primarily online only (such as ING Direct).
Many people used to paper checks, in person banking, and ATMs are often concerned about the security and accuracy of online banking. But online banking is actually a quite efficient way to manage your finances, pay bills, and get up the minute access to your spending habits and balances.
Benefits of online banking:
24/7 access: Except for occasional downtime to upgrade servers and sites, most customers using online banking having 24/7 access to their accounts. Some online banking sites even let users set up text and e-mail alerts about their account and some allow mobile access from cell phones.
Less fees: Since online banking allows you to check your balances and even debit card purchases and bill payments anytime, you can avoid costly overdraft and late fees by getting the latest information on your balances and accounts.
Payments: Many banks allow online banking customers to send bill payments right through the site. This can save time and money and ensure your bills are paid on time, every time.
Security: Online banking is often FDIC insured with the same standards as physical banking locations and the websites use high levels of encryption and security. Unlike physical banking, your account information is only seen by you and the bank’s system. This means your account numbers pass through far less people then paper checks and paper banking.
More money: As some banks begin to pop up as online only banks, the savings associated with not owning branches and a lot of staff gets passed on to you the customer in the form of higher interest earning accounts.
Saves paper: For all you environmentally friendly banking customers out there, online banking saves millions of pounds of paper a year.
Concerns with online banking:
Many people are concerned with identity theft and other security issues when banking online, especially since more and more people rely on online banking for everything from paying bills to seeing credit card statements.
To reduce security risks with online banking make sure the site uses encryption and secure site access (at the most basic you’ll see a little padlock icon in the bottom right of your browser indicating a secure server). Make sure the bank that runs the online access site is FDIC insured (for US customers).
Also make sure your computer is up to date and has it’s firewall enabled. You’ll want to make sure you have anti-virus software and the latest patches installed to greatly reduce the risk of programs like key-loggers recording and transmitting your passwords and account information to malicious third parties.
Be wary also of accessing your online bank accounts on unsecured wireless networks. While data encryption on financial sites is generally at the highest level of security, open wireless networks can still offer a chance for criminals to get some account information.
Overall, online banking is a great way to manage your money. You can even use free sites such as Mint.com to bring all your online financial accounts to one viewing site to organize, budget ,and see all your cash in and cash out.
Paper checks and physical bank branches will one day be a thing of the past I believe, online banking has gone well beyond the early stages where you might be able to log on and order some checks. Now most banks offer full feature secure websites to handle all of your financial life.