What is online banking? Customers can view statements, look to see if checks have cleared or deposits have been made, and transfer money from one account to another. Online bill payment provides customers with a convenient way to pay bills and keep accurate records.
Online banking is a new service being provided to customers. "On-line banking allows customers convenient access to their account information 24 hours a day, 7 days a week", says Sharon Lee, the Executive Vice President and Director of Client Services of American National Bank, who has thirty years in the banking industry. "Customers can view statements, look to see if checks have cleared or deposits have been made, and transfer money from one account to another. Online bill payment provides customers with a convenient way to pay bills and keep accurate records," said Lee.
Most traditional brick and mortar institutions provide some online banking services. Other online banking institutions are only available over the Internet, as they have no physical presence where a person could go in and talk with a teller. This can be a drawback if there are problems, but most of these online institutions have phone and email support available.
Most services that can be done in person can be done through online banking, particularly if it a traditional bank. Some of the transaction types available are account transfers, stop payments, online bill paying and balance inquiries. Many of these online banks also offer credit card and loan applications for cars or homes. Most of the time, the information you can retrieve is real-time or with a slight delay. All have updates performed daily at a minimum though.
There are many advantages to online banking through a traditional bank. Besides the above-mentioned transactions, it is easy to set up your online account using your bank's Internet site because they already have your personal information on file. Fees may be lower for accounts that are accessed primarily online and the bank may allow a large number of electronic bill payments free of charge. They also allow file transfers between your account and several popular accounting software packages. If you are using an online only bank, the fees can be even lower because there is virtually no overhead for buildings.
Of course, there are always a few disadvantages, especially with something new to the market. It can take some time to properly set up your account access and create your automatic payments. Some online banking services are limited in scope and abilities, but that will likely change in the future. For example, you cannot easily purchase traveler's checks from online only banks. Online bill payments have to be scheduled several days before they are due. If your bank removes the money when you schedule a payment, you can miss out on interest-earning accounts.
There are very few risks to online banking. Banks have a stake in keeping their customers happy and their data safe. In 2005, federal banking regulators released guidelines to financial institutions they oversee. They pertained mostly to security measures to keep customer data confidential. Some of the techniques used are firewalls, high-end data encryption and account names that have nothing in common to the actual account number. Be sure to ask beforehand at the bank what steps they take to protect your account information.
