The advantages and disadvantages of online banking are both persuasive, and many people nowadays use a hybrid of both internet banking and a physical banking account with a local bank. While online banking doesn’t seem as real as withdrawing and depositing your hard cash, you can do almost anything with online banking that you did at your bank branch.
Save Time and Money
Arguably one of the biggest benefits of online banking is the time and money savings. When you use online banking, you can check your account, schedule bill payments and manage deposits with a few clicks of the mouse. Even better, you have 24/7 control over your money; Not on a 9-to-5 physical banking schedule at any location across the city.
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No more phone calls or ATM visits to check your balance; No more fussing about paper bills, losing one and going looking for it, and not paying; And no wonder if Cousin Sally cashed her birthday check, or waits until your paper statement arrives in the mail to find out.
Online Bill Payment
Most internet banking institutions give you the option to set up online bill payments. Using Online Bill Pay, you can either choose to make a one-time payment on your bills, or you can set up recurring bill payments for monthly bills, such as an auto loan, car insurance or your mortgage. This advantage of online banking is invaluable as you can set up a payment at any time and know when the payment is credited.
No need to bill in the mail and receive a notice the next month that the check arrived late, or that the recipient didn’t get around to processing it until after your deadline. Online bill payment also saves you the worry of missing bills; Manage your bills electronically, and you never have to worry about missing paper.
It’s common knowledge that online savings accounts generally earn better interest rates than savings accounts at a brick-and-mortar bank, but you might not know that some Internet banking institutions also offer interest-earning checking accounts. Huh. Internet banking interest rates for checking accounts range from 0.5% to 3.40% p.a. These rates rival the interest rate you’d find for savings account at any traditional banking institution, and you’re not likely to find an interest-bearing checking account at a regular bank.
While Internet banking makes it easier for you to manage your money, it can be easy to check how much you have so you can budget. Online banking is like using a credit card – easy access makes it easy for you to spend without thinking about why you’re spending. You can set up e-mail alerts to let you know when your account drops below a certain number, but there’s nothing better than watching yourself and keeping your checkbook balanced.
Plus, when you receive a credit card statement in the mail and open it on a monthly basis, you’re immediately reminded to check that there aren’t any strange charges on your account. It’s easy to forget to track such information online, and you’ll need good money management habits.
Hackers can break into almost any computer system, so how can you be sure they won’t break into your bank’s system? You can’t do that, but any online bank site you think should have details on the type of security they use. You should e-mail the bank or visit the bank branch to find out what will happen if there is a security breach and if the answer is unclear then hit the point or go to another bank. In general, you should consider that your money online is as safe as it would be in a vault, but it is your responsibility to find out how safe a bank is, if it is FDIC-insured, and if they protect your security. Keep the system modern. Finally, you should also make sure that you use security software on your personal computer to reduce the chance that anyone can access your personal data.
you can remember that physical location
While online banking has many advantages, the biggest disadvantage is the absence of a physical location. Being able to deposit into a physical bank account ensures peace of mind; You don’t have to wonder if your check is lost in the mail or when it’s about to be credited to your account.
You may want that physical location for other reasons as well. Finance is complicated enough, and it’s no stretch to think that someday you might have a question about transactions or fees. One disadvantage of online banking is that you cannot speak to a customer service representative in person; You have to either send an e-mail or call a number and wait for your call to be answered. If it is a sensitive question or if you are facing any error in your details, you can get a quick answer if you visit any bank branch.
Internet Banking That Makes Sense: The Hybrid Approach
While a growing number of companies have gone electronic, giving you the option of checking statements and making payments online, some occasions today still require doing business on paper. Some companies aren’t set up for online banking, so you’ll need a paper check for those businesses. If you rent an apartment, your landlord probably isn’t equipped to receive payments electronically, so you’ll need a check to pay the rent. While it is convenient to be able to use electronic bill pay, you will need to use a paper check at some point.
Deposits are another disadvantage of online banking. If you use a bank that has no physical location, you will need to remit your deposit to your online bank. In these cases, you’ll be waiting a week or two for your deposit to be received and processed, and that’s when you can’t access that money. Sometimes things get lost in the mail, so the security of mailing is questionable. Many people who use banks that exist entirely online keep a second banking account at a nearby physical bank to make deposits and then transfer them electronically to their Internet banking institution.
Even if you are willing to rely solely on internet banking, the disadvantages of online banking are so strong that it is prudent to have a second banking account at a physical bank. Finding a genuine bank that offers online banking offers the best of both worlds, giving you one place for fast and easy deposits, but the freedom to access your money anytime.