View Mobile Site

Ask the Expert

Signal Photos


Advantages of Internet banking abound

Know the Score

Posted: May 3, 2008 3:00 a.m.
Updated: July 4, 2008 5:02 a.m.
Now that you have followed all the directions for doing your "due diligence" making sure your Internet banking company is legitimate, let's look at the advantages:

* It's easy to open an Internet banking account from the comfort of your home or office. You answer a few questions, set up the security measures to access your account, and then print off and sign a form to send in to complete the process.

* Internet banking is cheaper. Having no physical structure to keep up, virtual banks have low overhead. They can afford to cut you a break with higher interest rates on your savings, and lower overdraft fees. Even brick-and-mortar banks encourage online banking with free bill paying services.

* Internet banking allows you to compare deals easily. You can go to different online banks and find their interest rates and policies, what credit cards they offer, what their credit cards rates are, and compare loan terms. (Remember, always check with the FDIC to verify the bank's credibility.) n Internet banking customers can watch their daily balances and what is going on in your account, any day or time. You can check if a certain check has cleared or see when automatic deposits are made. This makes check bouncing nearly a thing of the past.

* Your monthly statement can be reconciled by using your computer. You can download your bank data into a software program like Quicken or Microsoft Money. Then with a few mouse clicks you can square up your account. You can even see copies of the checks you've written.

* You have a better chance to catch fraudulent use using an Internet banking account. When you check your debits and deposits, you'll notice if something is there that you did not do. If someone withdraws money from your account, you'll know it as soon as you log on and look over your account. You can then work on correcting the situation long before you'd notice it with conventional banking.

* Your banking is much more convenient because you don't have to wait for the bank to open its doors. You don't have to drive there wasting valuable time, and you can manage your funds from anywhere - even when you're on vacation.

Internet banking is growing for a reason. People are getting accustomed to transacting business over the Internet. They're enjoying the convenience and the control over their money that Internet banking gives them.

That's not to say that there are no problems with Internet banking, but many of the problems start with the consumer. For example, there are quite a few people who don't use Internet banking because of their lack of knowledge. They're resistant to technology or they feel it's too difficult to learn. Because young people are exposed to computers at an early age, people who have this problem are usually seniors.

Unfounded fear
Some people also fear using the Internet because of thinking it will be a loss of privacy. This is mostly an unfounded fear, and if you're alert about how you give out information and to whom, this will not become a problem.

You must also have the proper equipment which includes a basic modem and a browser with 128-bit encryption capability.

You'll also be better off with a faster Internet connection than dial-up. If your computer is no older than two years, this shouldn't be a problem.

Security may be a problem for some users because user names and passwords are often complex. This is good, for the most part, because no one else would guess them. However, it can be a problem if you can't remember them. What's even worse is that people who fear forgetting them will write them down and keep them near their computers. This makes it easy for thieves to get in and steal money from their accounts. This is especially a hazard if you work in an office with other employees.

Then there are the problems to do with the Internet banking and not the customers. One such problem is if the bank's computer system has an extremely high volume, your transactions may not be made in a timely manner. (I must say though, I've been using Internet banking for several years now and haven't had that problem, but it's possible.)

Another disadvantage is if you want to deposit a paper check that someone gives you. Virtual banks usually will not let you deposit through an ATM, so often your only choice is to mail it to them. This is where having a combination of a physical bank and Internet banking is an advantage. On those few occasions, you can take the time to drive to the bank and make your deposit in person.

A great advantage with Internet banking is that it makes bill paying a quick and easy task. Once you set it up, it can be done automatically if you set it up that way. Think of what an advantage this is if you're planning an extended vacation? Your monthly bills would be paid automatically without you having to be concerned.

Some Internet banking companies allow you to do online bill paying for free. You usually have to have a "qualifying account," but these rules vary. You can also get free online bill paying if you carry a large balance in your Internet banking account. You can find all this out at your bank's site.

To sign up for automatic bill pay start at the bank's Web site.

There's usually a tab marked "bill pay" or something similar. Click on that and you can enroll in their services. You'll be instructed how to set up your payees, options of how to list the people and companies, and probably the name and zip code of the company.

Paying bills
Next you designate from which account that company or person should be paid. You can set up a bill payment up to a year before you have it taken out of your account. Then you can choose how to be notified every time they pay a bill.

Paying bills through Internet banking is easy once you get the hang of it. If you set it up correctly, it takes very little management to keep up the stream of payments going from your account to those with whom you do business.

Now, if Internet banking could come up with a way for you to stop having to pay bills, you'd have it made!

Commentary by Dr. Maureen Stephenson, a local author and owner of REMS Publishing & Publicity. Her column represents her own views, and not necessarily those of The Signal.


Most Popular Articles

There are no articles at this time.
Commenting not available.
Commenting is not available.


Powered By
Morris Technology
Please wait ...