Online Banking

Overview

Major national banks and credit unions have developed flexible options for customers to conduct their financial transactions online. With online banking, you have the ability to open a bank account, apply for a loan or credit card, transfer funds, make investments, and pay bills at your convenience. You can access your account to manage your finances at any time in the day.

Some banks have even capitalized on today's growing mobile technology. For example, Chase, Bank of America, and Wells Fargo have each designed mobile banking tools with applications for iPhone and iPod Touch users. Chase has even enabled text message banking, whereas WTDirect offers Internet banking with free high-lmit transfers and online statements.

The Internet has revolutionized banking options for consumers. Loan applications take mere minutes, and you can configure your bank account to automate your bill payments. You can transfer funds between bank accounts with little to no lag.

Online banking allows you the option to manage all of your funds electronically. You can even choose to stop paper statements altogether. If you use a debit or credit card, you can track your transactions. Generally, it will take between 24 and 48 hours for a transaction to post, but you can quickly identify whether someone is fraudulently using your account.

Some banks will let you synchronize your financial information with financial management software, like QuickBooks. To do this, you will need to download your financial information to your computer. You should only download information if you are confident in your ability to keep your information safe from hackers.

If you find yourself confused or with questions, you can easily reach customer service by phone. Some banks offer customer service 24-7, while others designate certain hours. Typically, a bank will have a 24 hour fraud protection service available by phone. You can clarify your questions without ever setting foot in a bank branch location.

Benefits

Online banking gives people financial flexibility. If you are shopping for a new service, you can easily use the Internet to compare interest rates and features. With online banking, you can make informed financial decisions. Best of all, you can do your preliminary research anytime, since online banking is available 24 hours a day. You can even sign on to your accounts from your iPhone or BlackBerry to maximize your down time while you are waiting in line at a checkout counter or while you are on a lunch break at work. For example, on Bank of America's sign on page for online banking, you can access information about financial hardship deferment, insurance options, debt consolidation, retirement strategy, auto loans, and college planning.

Online banking turnaround times are relatively quick. Money transfers take effect in 24 hours or less. Your paycheck will generally clear within 48 hours. If you need to dispute a transaction, you can get a customer service representative on the phone almost immediately.

You can access all of your checking, savings accounts, investment, and loan accounts from one place. For example, when you sign on to Bank of America's online banking service, you can access your checking accounts, auto loans, IRAs, and expense tracking services.

Drawbacks

Personal safety is the biggest concern with online banking. Hackers and scammers are always trying to access your financial information. In any case, you should not be afraid to manage your finances online. Remain informed and take adequate precautionary measures, and you can successfully protect your assets.

Develop an eye for phishing scams. These tend to occur over e-mail or over instant messenger. A scammer will send you an e-mail posing as your bank. The e-mail may appear legitimate and ask for personal information regarding your passwords, social security number, and account information. NEVER give your information to someone via e-mail. If you have even the slightest of doubts, call your bank's customer service department.

Some banks actually offer fraud and phishing protection and will insure your accounts in part or in full. For example, Bank of America's online banking sign on page will direct you to a credit and identity theft protection service.

Many consumers complain that online banking is inaccurate as banks may display errors, or transactions may take some time to post. These complaints should not scare you. Be an educated consumer and maintain some degree of control over your banking. Keep track of expenses on your own, and call a customer service agent if you have a question. Don't expect everything to be foolproof, and if you have a complaint, report it.

Companies

• Bank of America emphasizes its commitment to privacy and security on its sign on page. The website features extensive information for consumers in addition to a cash back program. You can order check cards online, and you can access your Bank of America credit cards from one place. You can easily report phishing scams and research your credit scores. You can even take an online banking demo before you sign up for an online banking program or account with Bank of America.
• Wells Fargo offers standard online banking services as well as a vSafe program where you can keep records of important documents like insurance policies, tax returns, wills, trusts, and passports.
• Chase offers solutions for both business and personal banking. With Chase, you can choose to receive text alerts. You can receive security alerts when a transaction or ATM withdrawal goes over a limit, your username and password changes, and your mailing address changes. You can also choose to receive daily alerts regarding your balances, account activity, and large transactions.
• American Express is a credit card company that features online banking accounts for personal consumers, small businesses, corporations, and merchants. Like other banks and credit card companies, American Express features a rewards program and frequent flyer miles. Credit card customers have the flexibility to select from a variety of rewards programs. It is important to note that American Express is a credit card company that does not feature a traditional online banking account. You can use an American Express online account to manage your personal and business credit cards. American Express features an exclusive Centurion card, which is informally known as the Black Card. These cards have a high annual fee in addition to an initiation fee, and the credit limit is extremely high. There is no application for the Centurion card. People are eligible for the Centurion card by invitation.