Using online banking for transactions
Online banking gives you the ability to manage money online with your mobile device or computer. There is no need to visit a bank branch, and you can do what you need to do when it is most convenient for you. They can be easier to use, they usually have higher interest rates, they are free or inexpensive, and they are better for tracking spending, according to www.thebalance.com.
Money is increasingly electronic. Some people still use cash, but other forms of payment have become more popular. Why? They can be easier to use, they are free or inexpensive, and they are better for tracking spending. Banks play a meaningful role in that evolution.
Online banking used to be limited to banks that operated exclusively online. But now, even big brick-and-mortar banks and local credit unions offer online services. That said, you can still use an online-only bank, and we will discuss the pros and cons of different choices below.
Online banking services
Skipping a trip to the branch means you can conduct business anytime, from (almost) anywhere. But what can you really accomplish? A lot.
To bank online, you would need to use your computer or an app on your mobile device. Getting started can be tricky if you are not comfortable with technology, but everything gets easier once you are set up.
Open accounts: You can open accounts online, without the need to print or sign anything. In the past, you had to sit with a personal banker during business hours and fend off numerous sales pitches. With electronic signature capability, the entire process might take less than 10 minutes.
Pay bills: Instead of writing cheques to pay bills, your bank can print and mail a cheque for you—month after month. It is also possible to transfer money to your payee electronically, even if the amount you owe changes every month.
Transfer funds: Need to move money from your current account to your savings account? How about putting extra cash into a fixed deposit or opening a brand-new fixed deposit? You don’t need to visit a branch or wait on hold to get those things done. You can even link bank accounts at different banks and zap money back and forth.
Apply for loans: Loans are a “paperwork” intensive process. But they don’t have to be. Type in your information, which will speed the process of checking your credit, and your bank would get back to you with an answer. Some lenders operate entirely online, and they can make almost-instant lending decisions.
Get good rates: Online banks are known for competitive rates. In theory, you should be able to earn more in online savings accounts and pay lower interest rates on loans. It is always a good idea to shop around and compare online banking rates to traditional rates, but you would almost always do better online. Some brick-and-mortar banks offer online-only options. To use those accounts, you would have to give up your paper statements (which you might prefer anyway) and the ability to bank with a teller.
Stay informed: In addition to manually checking your account online, you can use “old-fashioned” text messages to manage your account, check balances, and more. Sometimes it feels like too much work to open an app and log in just to find out how much you have available. Find out exactly what types of services are available and how you benefit from texting with your bank.
View history: Need to see if that cheque cleared, or how much your employer paid you? It is easy to view transactions online, download historical statements, and search for specific events.
Dodge fees: Online banking services typically cost less than traditional brick-and-mortar accounts—while still offering competitive rates. You have got a good chance of landing a free account and avoiding monthly maintenance fees with an online bank.
Pros and cons of online banking
There are numerous benefits to online banking, and it is worth at least having the option to bank online. But traditional banks and credit unions also have their place.
In-person services: Banks do more than just hold money and shuffle it around. They can also provide notary services, safety deposit boxes, and official checks in an instant. You might not need those services often, but when you do, it is typically during an important event. Evaluate whether or not it makes sense to keep a local account open.
Technology issues: If you’re not comfortable with technology, online banking may be more trouble than it is worth. Plus, glitches happen, and if your computer (or the bank’s computer) is not working, then there is not much you can do. For complex situations like pesky customer service issues or discussions about different types of loans, it might be best to have a face-to-face conversation.
No cash? There is also the issue of getting cash. Online-only banks typically provide a debit card that you can use to withdraw cash, and they may even belong to networks with free ATM access. But for large deposits or withdrawals, a branch is always best. culled from punchng.com