About E-banking
E-banking, or electronic banking, provides a convenient way for people to perform a variety of duties involving their bank accounts. Electronic banking can be done either completely online or through an online banking service provided by your brick-and-mortar financial institution. If the bank offering e-banking is a member of the Federal Deposition Insurance Corp., your online banking transactions will be covered by the FDIC.
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Facts
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E-banking is a digital way of conducting financial transactions with your bank, financial institution or credit union. Electronic devices used to conduct e-banking include cell phones, computers and hand-held devices, such as personal digital assistants. Electronic banking transactions are also covered under the Electronic Funds Transfer Act.
Types
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Types of e-banking transactions include transferring funds between accounts, applying for loans, wire transfers, checking balances of accounts and downloading financial information onto your computer. Another type of e-banking involves paying bills online through your bank's software. An external type of e-banking involves transferring money from PayPal or other online entity into your bank account.
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Benefits
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E-banking allows you to obtain real-time information about your bank accounts. This allows you to verify whether a transaction or a check has cleared or whether there are any unauthorized transactions on your account. You benefit by having better control and protection against identity theft. Because the account is available 24/7, you have the benefits of accessibility and convenience. Paying bills online provides cost savings because you use fewer postage stamps and go to the post office less, thereby also saving gas money.
Considerations
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Even though e-banking sites are encrypted and secured for online transactions, some individuals still feel unsafe about using the Internet to perform banking transactions. It is important to consider the level of risk at which you are comfortable. There still is a chance that your financial information will be stolen. It is important to realize that some Internet-only banks charge higher rates for possibly fewer services than brick-and-mortar banks that offer e-banking. Also, know that some banks charge fees for e-banking.
Safety
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Safety protocols are especially important when e-banking. Never give out financial information over the phone or via email. Avoid keeping open connections to cable or phone lines while not in use. This lessens unauthorized access. Choose a personal identification number that is hard to guess, unlike your birthday. Protect your PIN to prevent unwanted account transactions. Consider purchasing anti-virus, encryption and firewall software for your computer. Don't allow others access to your personal files. Use passwords on your computer and maybe even cell phone, and give them to only those you trust if necessary.
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