Virtually all banks have an online banking presence these days, and a growing number of banks are completely online. If you haven't already joined the world of online banking and are weighing your options, here are some positives and negatives to consider.
- Convenience – You can do all of your banking transactions 24/7, from anywhere that has a suitable Internet connection. Many banks have mobile phone apps that handle a lot of the same tasks as the full website.
- Review of Account Activity – Online banking allows you to check your account activity anywhere, anytime.
- Online Bill Paying – You can pay bills online through your account or set up regular bill payments without ever having to set foot in a bank.
- Real Time Alerts – You can be instantly notified of account issues through your computer or internet-enabled mobile device (tablet, smartphone, etc.).
- Lower costs –Through lower overhead, banks can pass savings on to their customers through lower/fewer fees and better interest rates on CD's and checking/savings accounts. That doesn’t mean they always will, though, so it’s still wise to comparison shop.
- Security – Your virtual account is arguably less secure than a traditional account – be extremely security-conscious.
- Internet Dependence – If your Internet connection goes out, you're inconvenienced; if the bank's site is compromised, you're stuck.
- Impersonal – If you like personal contact, or need to resolve a problem with your online account, you are limited to an online chat or a phone call if your bank doesn't have a physical branch nearby.
- Depositing Traditional Checks – Many banks now offer mobile check deposit (snap a picture of the check and submit it online). If your bank doesn't have that capability, you'll still need to go to a branch. And even if it does offer the service, they often have limitations, such as the amount of the check.
Assuming the plusses outweigh the minuses for you, let's review some do's and don’ts for online banking activities.
- Verify Your Bank – Be sure that any online bank you deal with is insured though the FDIC; do your background work. Verify that the website is legitimate – beware of knockoff sites and don't trust links. Type the website into the browser directly, and look for the https:// on secure pages.
- Check Your Account Regularly – With security breaches increasing, it's best to check your account regularly for unauthorized charges. The longer that fraud goes undetected, the harder it will be to resolve. Report even the smallest charges, as identity thieves often charge a small amount to see if you are paying attention.
- Value your Password – Your password shouldn't be so complex that you can't remember it, but it should at least have some odd characters and be non-obvious for a thief to recognize. Avoid the old chestnuts like "password" or "123456,” and the temptation to use the same password for everything. Change your passwords regularly and do not let your browser "remember" your password.
- Limit Mobile/Public Access – While mobile access is convenient, it is also less secure. Limit its use to emergencies or notifications. As for public access computers, avoid them if you can and be sure you log off and close the browser before ending your session.
- Anti-Virus Software – To avoid loss of account information, make sure your computer has anti-virus software, and update it regularly.
- Don't Give out Personal Information or Fall for Scams – The bank will never call or e-mail you asking for personal or account information; they already have it. If you are not sure if an e-mail or phone message is real, call the bank's customer service for confirmation.
If you follow this advice, you can gain comfort in the world of online banking. So a week from now, you just might be checking your account balances in your underwear!