Internet banking has become a popular way for people of all walks of life to conduct their financial transactions strictly online due to its great convenience. But is banking online really safe, and how difficult is it to deal with finances virtually?
In this fast paced, highly technological world we live in today it seems as if just about everything can be taken care of virtually, and now banking is becoming more popular than ever before. Over just the last six years Internet banking, or cyber, electronic, online, virtual, or web banking, as it is often called, has grown in leaps and bounds in spite of the trouble many well known banks have encountered recently.
An authentic Internet bank, or a "brick-to-click bank," as the new term was recently coined, is one that offers most or all of the very same services that a traditional brick-and-mortar bank would. Now, numerous banks and financial institutions are working to establish a respected online presence and are actively trying to educate customers of the benefits and advantages of Internet banking.
Advantages of Internet Banking
Perhaps the first and most notable advantage to Internet banking is its sheer, unrivaled convenience. Many of us have felt that there are simply not enough hours in the day to get everything done, and a trip to the bank is usually a carefully planned event thanks to banker's hours, which often coincide with the same hours people are busy at work.
But, banking online allows you to log on to your account anytime, day or night, including holidays, at your greatest convenience. And, you'll never have to wait in a long line again either inside the bank or outside at an ATM machine for things like checking on your balance or a bill that was recently paid or transferring funds. Also, many banks charge fees for calling customer service or simply getting your account balance, so choosing to do your banking online can have the potential to save money as well.
Besides the matter of limited bank hours in regard to physical locations, online banks often have more reasonable fees and charges associated with having an account. For example, minimum balance requirements are usually not necessary with Internet banking the way they are with physical banks, and some institutions will waive online fees if you also have an account at one of their branches.
As competition increases in the online banking world, so do the number of additional features and benefits offered to customers. Some online banks include a variety of helpful tools for budgeting and bill paying while others feature customer reward programs, short-term loans, and notifications about your account sent to your cell phone in addition to emails. Checking account balances and receiving different alerts or notices via text message are all possible with some online banks.
Disadvantages of Internet Banking
Much like anything in life, there are a few disadvantages to internet banking as well as the aforementioned advantages to be had. To begin with, a bank is definitely one type of institution in which relationships with customers are based upon trust, and a large number of people do not yet trust doing their banking via the Internet, and some may never, although there might come a day when it's an absolute must.
Also, some people have made the costly mistake of not remembering that some online banking procedures are still affected by the regular business hours of the bank. Meaning if you make a balance transfer late in the evening before a bill is due to be paid the next day, it might not appear in your account until after 8:00 or 9:00 the next morning. But, preparing in advance and taking this noteworthy factor into account is an excellent way to avoid expensive insufficient funds fees.
Internet Banking Safety Tips
First and foremost, an online bank should be FDIC (Federal Deposit Insurance Corporation) insured to protect your money in the event the institution were to declare bankruptcy for some reason, which, in light of today's headlines and downward spiral of many well known banks, is very well possible. This form of "insurance" provided by the federal government in the U.S. ensures your money will be safe up to $250,000 if the bank files bankruptcy.
Also, when it comes to Internet banking there are certain laws and regulations in place addressing the issue of privacy and many individual states already have their own laws in respect to these concerns and others.
Deceptive emails, often called phishing emails, are sent by the thousands every day to unsuspecting people. Banks, those that operate exclusively online or otherwise, will never send an email to a customer requesting their user name, password or PIN number. Only visit your bank's website by typing in their address into your brower's address bar making sure to type the link correctly and verifying the domain name once the site loads.
A secure online bank's website will start with the letters "https" with the S indicating a secure connection. There should also be information regarding the type of encryption software the bank uses as well as other means used to keep your information safe.
Unless you are doing all of your banking from home, be aware of your surroundings, making sure your privacy is protected at all times. Never bank on public computers at cyber cafes or libraries, and do not leave any computer unattended while visiting your bank's website remembering to completely log out of the site when you are done.
In spite of worrying about becoming another victim of identity theft when Internet banking, the convenience and useful features it offers are often worth doing what we all should be anyway, diligently protecting our hard earned money both online and off.