Still setting foot in a real bank? Why not take advantage of online banking? Online banking doesn’t have to be intimidating – after all, millions of people deposit money and pay bills from a smartphone or computer.
If you haven’t taken the plunge yet, we’ve put together a quick guide to help you learn how to get started.
Top takeaways: your guide to online banking
- Online banking allows you to perform your financial services entirely online. Some banks do not have a storefront and others offer full online services while having physical locations.
- The advantages of online banking include convenience, speed, high interest rates and more. All of this is possible without having to spend funds to maintain a physical property.
- The disadvantages include security, no face-to-face interaction, and more. This is due to the inability to walk into a store and speak with an employee.
- Creating your online bank account is easy. What you are responsible for is making sure that an online bank and the services it provides match your style of managing finances.
What is online banking?
Online banking is like traditional banking, except that all transactions are done through a financial institution. website or mobile banking app.
You can do almost anything you could do online while standing in line at the bank. You can open checking and savings accounts, make deposits, withdraw money, and pay bills online.
You will need a computer, smartphone or tablet if you want to do online banking. Each time you log in, you will need to provide a username and password, and in some cases you will need to answer a few security questions.
All your banking information is only accessible by you and your bank.
Benefits of online banking
Online banking has a few advantages. Before you jump into online banking, first consider the pros and cons.
Convenience. Banking from your phone or laptop is a big deal. huge time saver. You can pay bills, check your balance, and transfer money between checking and savings accounts with just a few clicks. One of the savings accounts we highly recommend is Credit Karma. They currently offer one of the highest APYs on the market.
Higher interest rates. Online banks can pay up to 5 times more interest than traditional banks, according to a study by DepositAccounts.
Instant notifications. You can opt for SMS and email notifications, which will be sent to you according to your preferences.
For example, if your balance is negative or if a large purchase is made, you will receive a text or email so that you can monitor your account around the clock.
Always accessible. If you only use physical bank branches, you are tied to their hours of operation, typically 9 a.m. to 5 p.m., and only a few hours on Saturdays (most are closed on Sundays). Online banking is available 24/7.
No paperwork. Online banking does not require you to complete any documents, such as an application form, withdrawal slip, or paper check. Most offer the option of depositing checks by taking a photo from your phone.
Disadvantages of online banking
Since online banking relies on the reliability and speed of the internet, you may face some drawbacks associated with this fact and a few others. Here are some other drawbacks you can consider.
Impersonal. You will not get a warm and fuzzy personal experience when banking online. You can still chat with customer service representatives using the bank’s online site chat or call, but you won’t be able to walk into a bank and see real people.
Some technical knowledge required. There could be a learning curve in online banking. For example, you will need to know how to navigate online services, how to set up online direct deposit, and how to download a mobile application.
Fortunately, there are many banks that offer tutorials for you to learn how to use online banking.
Data breaches are possible. Any bank (online or traditional) that does business online is vulnerable to hackers. Almost ¾ of Americans were more concerned about data privacy in 2018 than they were in 2017, according to a study published in the ABA Banking Journal.
You can’t do it all online. There are times when it makes sense to visit your bank personally, such as when you need to buy quarter rolls, need a money order or certified check to pay for a large purchase, or need to deposit money. ‘silver.
In these cases, you will need to physically go to a bank branch or find the nearest ATM.
How does online banking work
Once you’ve signed up for online banking, you can go online and complete all of your financial transactions. You will have access to customer service online or by phone if you encounter technical difficulties or need other help.
Financial transactions are done instantly, and as long as you become familiar with your bank’s website, services, and mobile app, most online banking is fairly intuitive.
Who offers online bank accounts?
Most traditional banks offer online banking services, and some banks are completely online.
If you don’t use your bank’s online services, ask what they offer and do some research to see if online banking is something you could benefit from.
Some traditional banks offer a wide range of online services, such as credit monitoring and budgeting applications. Everyone’s financial needs are different, so figure out what type of online banking might be right for you. Here are a few examples of each.
Online banking only
- Allied bank
- Discover the Bank
- Bank of chimes
Physical banks with online services
- Wells fargo
- Bank of America
- Citizen’s Bank
How to create an account
If you’ve never done banking online, the steps to get started are similar to opening a physical bank account.
- Open a new checking or savings account. Do it with one of the banks listed above. Online banking only requires your driver’s license number and social security number.
- Sign into your account. Once your account is open, you will have access to the bank’s website to log in and carry out transactions as well as view your balances and statements. You will also receive a debit card in the mail for the times you wish to do business in person.
- Explore your benefits. Take advantage of online banking services offered by your bank or credit union. You can do this in a number of ways, including downloading your bank’s mobile app and signing up for online banking.
- Keep your accounts. You will be able to view your account balance online at any time and carry out transactions wherever you go to your bank. You can bank online when it’s most convenient for you, and when you need to go to a bank branch, you can always do so.
Try online banking
Traditional and online-only banks have become more and more more competitive because there are thousands of banks for you to choose from. As mentioned above, online banks usually offer higher interest rates.
Some also offer financial rewards and incentives just for signing up and opening an account. Concerned about security measures? Online banking is constantly improving. Some now offer voice, face and fingerprint login. =
As with any technology, you should always do everything possible to protect your financial information. Whether you choose online banking or traditional banking, remember that you are responsible for your finances. Do what’s best for your lifestyle and your situation.
You want to know more ? Check out Benzinga’s guides to the best checking accounts, the best online checking accounts, and the best online savings accounts.