Advantages & Risks of Online Banking

Many people choose to do their banking through the Internet. Before making this decision, you need to be aware of both the advantages and risks of online banking.

Function

Online banking lets you take care of your banking needs by logging on to your bank's website with a customer number or user name and password. You can access your checking, savings, credit card, mortgage and loan accounts with just a few mouse clicks, anytime and anywhere.

Features

You can transfer funds, pay your bills and view your transaction history. These online services are available to both personal and corporate clients.

Benefits

There are a number of advantages to online banking. You don't have to leave your home to do your banking. You can access your accounts online in a matter of seconds. Internet banking is an environmentally friendly option. You can choose to receive your monthly statements electronically instead of by mail and save a lot of paper in the process. You can view your statements in order of date and are likely to find the information you're looking for quicker than flipping through pages of old paper statements. This system can help you stay more organized and save space.

Warning

There are risks associated with online banking that you should be aware of. Unfortunately, technology is never 100 percent reliable. You may have trouble connecting to the Internet. The bank's website may be temporarily down. If you have not left yourself time to get to the branch or contact it by phone, then you are at risk of missing payment deadlines, which will result in penalty fees. Online banking can also compromise your security and privacy. Hackers can obtain your account number or Social Security number and make unauthorized transactions on your behalf. Someone may get your security details if you didn't close the browser window or if the password memorization feature is enabled for your bank's website.

Prevention/Solution

If you choose to do your banking via the Internet, familiarize yourself with your bank's security measures, such as encryption, firewalls or the use of security questions. Experts suggest always logging off and closing the browser window when you are done with your online banking session. These steps will ensure that managing your money from your office or home is convenient, efficient and safe.