Internet banking has been around for years, but its popularity is only now growing. Holdouts have resisted banking online because of security concerns, but there are real benefits to online banking that will make your life easier.
With traditional banking, if you want to know how much money is in your account, you’ll have to visit a bank teller or your bank’s ATM machine, or you can make a phone call to a customer service representative. With online banking, all of that information is at your fingertips simply by visiting your bank’s website.
“The ability to monitor money is important if you care about where you stand financially,” says Mark Schwanhausser, senior analyst at Pleasanton, Calif.-based Javelin Strategy & Research. You’ll know if you can afford that next purchase, he says.
Online banking also can help you quickly identify fraudulent charges made against your account. If you’re monitoring your bank account the traditional way, you can count on getting a paper statement with your transactions once a day at the bank, according to Schwanhausser. That gives fraudsters ample time to spend your money. With online banking, you’ll know when a charge is recorded with the bank, especially if you set up cell phone text or e-mail alerts.
According to a fraud survey conducted by Javelin Strategy in January, 43 percent of account fraud is detected by account holders themselves.
Most American households are inundated with snail mail, whether it’s unsolicited advertisements or banking and credit card statements. Online banking is one way to reduce that clutter and simplify your life.
With online banking, you can opt out of paper statements. At some banks you can aggregate all your bills at one location on their site. For example, on the Bank of America website, you can set things up to pay a host of bills from companies such as AT&T, Sears and Texaco as well as make your Bank of America credit card and loan payments. You’ll need copies of the bills to set up the service. Once you are set up, you’ll get e-bills at the online banking site of Bank of America.
“One of the key reasons people are turning off paper statements is they want to reduce the clutter,” says Schwanhausser. “Online banking is a central piece of that.”
Reducing time spent on banking
Need to check your balance, make a transfer or balance your checkbook? All of those things can take time, especially if you do it manually. Online banking reduces the time you’ll spend on banking, leaving you more time to spend your money.
“You can check your money any time,” says Karin Price Mueller, a personal finance columnist for The Star-Ledger in Newark, N.J. With online banking, you have access to everything you need and you save time.
The environment may not be the single motivating factor for banking online, but for many consumers it has its appeal. Since you won’t be getting paper statements anymore, you’ll help save trees and reduce the oil consumed by the mail truck.
According to Herndon, Va.-based PayItGreen, a coalition of financial institutions and companies formed to educate consumers about electronic payments and statements, if a household switches from paper to electronic statements and payments, it would save 6.6 pounds of paper per year and eliminate 171 pounds of greenhouse gas emissions.