Online banking isn't out to change your money habits.
It simply uses today's technology to give you the option of bypassing
the time-consuming, paper-based aspects of traditional banking in
order to manage your finances more quickly and efficiently.
It is almost certainly the way most banking will be
conducted in the not-too-distant future.
Benefits of banking online
Whether your bank is a traditional brick and mortar institution
or a Web-only bank with no brick and mortar branches, online banking
lets you connect to your bank through the Internet and do things
such as view your accounts, transfer money between accounts, view
images of canceled checks, print copies of those checks and pay
bills online. You'll find that it's common for online banking sites
to be compatible with money managing programs such as Quicken and
Many banks make it easier to manage your checking
account by allowing you set up e-mail alerts so you can be notified
when checks clear or when your balance slips below a certain level.
There is also a detailed listing of your canceled checks.
If you'd like to eliminate paper checks from your
life, you'll find that a growing number of companies allow you to
make automatic payments through your online banking account.
Getting set up for online bill
Getting started is easy. The bank's Web site will walk you through
the steps of registering the bills you want to pay and the accounts
you want to use to pay them. You'll only have to enter the information
once. You can always make changes and add or subtract bills.
If a monthly bill is for the same amount each month,
you might want to schedule a recurring payment. If the amount varies
from month to month you can pay the bill each month on a "one
Set your schedule
Once you have registered the accounts you wish to pay online, the
next step is to schedule payments. Your creditors receive your online
payment in one of two ways: electronic payment or check. If the
company is set up to accept electronic payments, your payment is
automatically debited from your account and deposited electronically
into their account. If the company can't accept electronic payments,
your bank issues a check based on your online payment instructions.
Most bill payment sites include a payment activity
page that lists all of your payments and their status -- scheduled,
pending or processed.
Be aware that companies sometimes change the billing
address or your account number without warning. It's important to
check your statement each month to verify those details as well
as your transactions.
You'll have a user name and password to access your online account.
Just as with any information used to access any other financial
account, you should keep these codes secret. Your bank will tell
you what to look for -- usually an icon of a locked padlock -- to
ensure you're accessing your account over a secure line.
You should also beware of a scam called phishing where
crooks send out e-mails that might look exactly like e-mails from
your bank. These e-mails often claim that some account or personal
information is needed. You're asked to click on a link and fill
in the information. As a hard-and-fast rule, never click on a link
in an e-mail and then divulge account information. Call your bank
-- don't use a phone number supplied in the e-mail -- and ask if
the e-mail is legitimate.
Whether you bank online or prefer the old fashioned
way, you receive a statement every month that details transactions
and account status. In the next section, you'll see why you should
take time each month to carefully review your statement.
Did you know
The number of online banking customers increased to nearly 40 million
in the fourth quarter of 2005, according to comScore Networks, which
measures and analyzes consumer behavior. That was a 27 percent increase
over the previous year; online bill paying increased 36 percent
during that time.