What Are the Different Types of Online Banking?
Since the introduction of online banking in the 1990s, consumers have embraced it in ever-increasing numbers. By 2009 almost 35 percent of all banking transactions, everything from shopping for a mortgage to paying the electric bill, were performed online. Consumers enjoy the convenience and the 24-hour access to their accounts. Banks appreciate the low cost of transactions and the fact that online customers tend to be long-term customers.
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View Accounts
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The most basic level of online banking is to simply view your accounts. To set up online banking access you will need your account number and secret code, and you will be asked to designate a user name. To access the accounts after the initial set up, you will need to log in with your user name and secret code or password. This allows you to view your account(s) online and know instantly whether a check or deposit has been posted. Internet banking also makes proof of payment a breeze. By clicking an individual transaction you may view and print front and back images of the check or deposit slip.
Pay Bills
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With Internet bill pay services you may log into your account and authorize payments without having to write or mail checks. You will need to enter the account number and remittance address one time for each vendor, but successive payments will require only the date and amount. Bill pay services allow you to set up recurring payments, which are the same amount each month. This is particularly helpful for expenses like mortgages and car payments. By never missing a due date you avoid costly fees and boost your credit rating. Just be careful to make sure you keep adequate funds in your account.
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Transfer Money
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David Bach, author of "The Automatic Millionaire," stresses the importance of paying yourself first and automatically. With online banking and savings accounts at the same bank you may schedule automatic recurring transfers to build your savings.
Communications
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Some banks use your online account as a means of communicating special offers to you. They attach an inbox to your online account and a periodically offer things like a discounted loan rate or a free box of checks. They also offer the ability to set up email alerts. Examples include the bank sending an email or text message if your balance falls below a certain level or when your certificate of deposit matures.
Maintenance
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Online banking allows you to update personal information, such as address changes, without visiting a branch. You may also have the ability to order checks online or contact customer service via secure email.
Loans and New Accounts
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Consumers may apply for loans, credit cards and mortgages, as well as open and fund checking and savings accounts online. Federal law, however, requires business accounts to be opened in person.
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