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Think hard for a moment: When was the last time you walked into your bank?
With the 24-hour access to their bank accounts that an ATM computer terminal delivers, many bank customers seldom enter the 8:30AM-to-3:00 PM world of the typical bricks-and-mortar bank branch. With the advent of online banking, you now have the option of doing virtually all of your banking without leaving home 24 hours a day. Online banking effectively transforms your personal computer into a bank teller, enabling you to complete nearly all the transactions you used to take care of during a trip to the bank or ATM, except for cash withdrawals. What's more is that online banking gives you access to more detailed financial information allowing you to better track where your money is going, as well as plan where you want it to go in the future.
Six reasons why you should be banking online
ATMs revolutionized the way we bank. With the exception of being able to cash back from your PC, online banking offers all of the advatages of an ATM and more:
- Know as much about your accounts as the bank does. Unlike the account balance you receive at an ATM, the one you access via your computer will show the outstanding checks that have yet to clear the bank.
- Double-check ATM cash withdrawals, debit card purchases, and other transactions that often go un-entered in your checkbook record. (In a recent year, Americans used their ATM cards over seven billion times, averaging more than six hundred million times a month. That's plenty of opportunity for overlooking some important checkbook entries!)
- Transfer funds from one online account to another.
- Make a payment on any loan or credit card account at your bank.
- Download transaction information and automatically insert it into personal finance software.
- Closely monitor all your accounts so you can avoid or minimize service charges and overdraft fees, as well as maximize the interest income you can earn.
The specific choices available to you in an online banking relationship will depend on what features your bank offers in its online version. Your options may range from the most basic capabilities, such as being able to check account balances and transfer funds from one online account to another, to the more complex that allow you to track investments and apply for loans online.
If your bank doesn't yet offer an online banking service, chances are very good it will in the near future. By 2003, 60 percent of adults in the United States are expected to have access to online services. That's a powerful incentive for banks to develop and enhance their online technology, because online banking is even less expensive for banks than serving customers with ATMs.
For now, the way you access online banking and the options available to you will depend on what your bank offers. You can access online banking features using three different methods:
- The Web This involves using a standard Web browser (such as Netscape Navigator or Internet Explorer) to access account information via your bank's World Wide Web site on the Internet.
- Personal Finance Manager Software These programs, which enable you to track and manage all your financial information, also have the capability to exchange information with your bank online, if your bank supports such a connection. Among the most popular packages are Quicken, Microsoft Money, and Managing Your Money.
- Your Bank's Software These programs are provided by your bank and run on your computer. Referred to as "bank-branded" or "proprietary" software, these software packages enable you to connect to your bank (usually via a private data network, not over the Internet) for online banking. The features they contain can vary, from enabling you to perform such basic tasks as reviewing your account information, to more complicated tasks, such as tracking your investments.
What can you expect to pay for this online convenience? The usage fees will vary, depending on which of the above methods you choose. Also, if online bill payment is a priority for you, be aware that most banks consider that a separate service, and so include a separate charge for it. For example, a Web-based online bank may charge no fee for the most basic features such as checking a balance and transferring funds, but charge $4 a month for bill payment.
Even with all the convenience online banking provides, there are still two important financial tasks you cannot perform online. You will still need that human teller or ATM to dispense actual greenbacks, and to accept checks for deposit. But with the majority of your financial life fully automated, those visits may begin to seem as quaint as a buggy ride in the park.
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