Just Finance Information

Online Banking

September 13th, 2007 Subscribe To Our Feed

Make the Switch to Online Banking
Are you still paying your bills by mail or in person, physically going to your local bank to make deposits or apply for loans and mortgages, just like your parents did? If not, you're probably one of the millions of people who have switched to online banking.

Online banking, also known as electronic banking or home banking, allows you to bypass time consuming paper based transactions and to manage your finances more quickly and efficiently. According to Pew Internet & American Life Project, “fifty-three million people, or 44% of internet users and one quarter of all adults, now say they use online banking” which is a 47% increase on the numbers for 2002. Not surprisingly, therefore, most large banks like US Bank, Bank of American, Wells Fargo, Bank One, and Chase, as well as smaller banks and credit unions offer some form of online banking.

There are many advantages and only a few disadvantages to online banking. The major advantage, of course, is convenience. Online banks never close and customers can take care of business any time of day or night from the comfort of their home or hotel room, anywhere in the world. Bank accounts can be accessed and managed from one secure site, transactions are confirmed faster and most systems are compatible with home money managing programs.

The disadvantages to online banking are relatively few but can be significant in certain cases. Deposits into accounts must be made by mail unless there is a local branch bank nearby. If your bank is a virtual bank then this is the only option.

Making good financial decisions will help you avoid costly surprises or even scams. Be sure to confirm that an online bank is legitimate, that personal information is kept private and secure and that deposits are insured, especially if you're looking at a bank that only offers online services and has no physical location. Understand your rights as a consumer and learn where to go for more assistance if needed. Verify that the banking institution is ‘FDIC Insured’ or ‘Member FDIC’ because if the bank is not a member, your deposits may not be insured. And of course, read the bank’s online banking terms and conditions so there aren’t any surprises in your financial future.

Whether you're thinking about or already using already using online banking you can find more information regarding online banking systems in general and safe internet banking advice in particular by visiting www.fdic.gov.