The Advantages and Disadvantages of Online Banking

The advantages and disadvantages of online bankingHackers can break into nearly any computer system,
are both persuasive, and many people nowadays useso how can you be sure they won't break into your
a hybrid of both internet banking and a physicalbank's system? You can't, but any online bank site
banking account with a local bank. While onlineyou consider should have statements on the type of
banking doesn't seem as tangible as withdrawing andsecurity they use. You should also e-mail the bank or
depositing your cold hard cash, you can do almosthead to the bank branch to find out exactly what
anything with online banking that you did at yourwould happen if there were a security breach and
bank branch.press the point or go to another bank if the answer
Save Time and Moneyis vague. In general, you should think of your money
Arguably one of the biggest advantages of onlineas being as safe online as it would be in a vault, but it
banking is saving time and money. When you useis your responsibility to find out just how secure the
online banking, you can check your account, schedulebank is, if it is FDIC-insured and if they keep their
bill payments and manage deposits with a few clickssecurity systems up-to-date. Finally, you should also
of the mouse. Even better, you have control of yourmake sure that you use security software on your
money 24/7; not on a 9-to-5 physical bankingpersonal computer to reduce the chance that anyone
schedule at some place across town.can get your personal data.
No more phone calls or trips to the ATM to checkYou Might Miss That Physical Location
your balance; no more fussing around with paper bills,While online banking has many advantages, one of
losing one and having to go search for it, and missingthe biggest disadvantages is the absence of a
a payment; and no more wondering whether cousinphysical location. Being able to make deposits to a
Sally has cashed her birthday check, or waiting untilphysical bank account assures peace of mind; you
your paper statement arrives in the mail to find out.don't have to wonder if your check is lost in the mail
Online Bill Payor when it's going to be credited to your account.
Most internet banking institutions give you the optionYou might also want that physical location for other
of setting up online bill pay. By using online bill pay,reasons. Finances are complicated enough, and it's not
you can either choose to make a one-time paymenta stretch to think that you might have a question
on your bills, or you can set up recurring bill paymentsabout a transaction or fee someday. One of the
for monthly bills, such as an auto loan, car insurancedisadvantages of online banking is that you can't
or your mortgage. This advantage of online banking isspeak to a customer service representative in
invaluable since you can set up payments anytimeperson; you must either send an e-mail or call a
and know exactly when the payment is credited.number and wait for your call to be answered. If it's
No more putting a bill in the mail and receiving aa sensitive question or if you are dealing with a
notice the next month that the check arrived late, ormistake on your statement, you might get an
that the recipient didn't get around to processing itanswer faster if you go to a bank branch.
until after your deadline. Online bill pay also saves youInternet Banking That Makes Sense: The Hybrid
the worry of losing a bill; manage your billsApproach
electronically, and you never have to worry about aWhile an increasing number of companies have gone
missing piece of paper.electronic, giving you the option of checking
Interest-Earning Accountsstatements and paying online, some occasions even
It's common knowledge that online savings accountstoday simply require doing business on paper. Some
typically earn a better interest rate than the savingscompanies aren't set up for online banking, so you'll
accounts at a bricks-and-mortar bank, but you mightneed paper checks for those businesses. If you rent
not realize that some internet banking institutions alsoan apartment, your landlord probably isn't equipped to
offer interest-earning checking accounts. Internetreceive payments electronically, so you'll need a
banking interest rates for checking accounts rangecheck to pay rent. While it's convenient to be able to
from 0.5% to 3.40% annually. These rates rival theuse electronic bill pay, you're going to need to use a
interest rate you'd get for a savings account at anypaper check at some point.
traditional banking institution, and you're unlikely toDeposits constitute another disadvantage of online
find an interest-bearing checking account at a regularbanking. If you use a bank that doesn't have a
bank, either.physical location, you'll have to mail your deposits to
Funny Moneyyour online bank. In these cases, you may be waiting
While internet banking makes it easier for you toa week or two for your deposit to be received and
manage your money, it might make it easier toprocessed, and that's time in which you can't access
forget to check how much you have so you canthat money. Sometimes things are lost in the mail, so
budget. Online banking is a lot like using a credit cardsthe security of making a deposit by mail is
- the easy access makes it easier to spend withoutquestionable. Many people who use banks that exist
thinking about why you are spending. You can set upsolely online keep a second banking account at a
e-mail alerts to let you know how when yournearby physical bank to make deposits and then
account dips below a certain number, but nothingtransfer them electronically to their internet banking
beats looking at it yourself and keeping yourinstitution.
checkbook balanced.Even if you're inclined to rely solely on internet
Also, when you get a credit-card statement in thebanking, the disadvantages of online banking are
mail and open it on a monthly basis, you are instantlystrong enough to make it prudent to keep a second
reminded to check if any strange charges appear onbanking account at a physical bank. Finding a physical
your account. It's easier to forget to keep track ofbank that offers online banking provides the best of
such information online, and you'll need to have goodboth worlds, giving you a location for fast and easy
money management habits.deposits, but the freedom to access your money
Securityanytime.