According to the American Banker’s Association, more than half of all Americans have made the shift towards convenient online banking. In fact, a record number of Americans—nearly 62 percent—prefer online banking over traditional banking, which can involve a hectic commute and long lines at a bank branch. While this is a big spike from the 36 percent of people who preferred online banking five years ago, many Americans still don’t understand how online banking works—let alone how it would be beneficial to them and their growing financial savviness.
WHY ONLINE BANKING
Think about this: Every month more than 44 million households pay at least one bill online and that number is projected to increase to 55 million households in 2016. Compared to the limited hours of traditional bank branches, most online banks are easy to access, safe, effective, and available 24 hours a day.
And if you’re like millions of Americans, you’ll want to readily access online banking for the convenience and ease of being able to bank from home or while on the go through your mobile devices.
And it doesn’t stop there. Online banking continues to become more and more efficient with substantial technological advances, increased demand for innovative online services, and new developments in Internet banking. While online banks make it possible to check your balance, transfer money, and even pay bills while on the go, there are plenty of other features available to make managing your money an easier and friendlier task.
If you’re not familiar with online banking, or not sure whether it’s right for you, we describe all you need to know about it below and provide an overview of how online banking works, as well as how online banking can help streamline and enrich how you manage your money.
What is Online Banking?
Online banking is an easy way to access and manage your money through online devices instead of visiting the bank in person or calling. With online banking, you can check your account balance in real-time, view and search through your transaction history, download monthly statements, transfer money, pay bills online and set up a one-time or recurring electronic bill payment, and more.
Online Banking Features & Benefits:
Can’t remember what life was like without online banking? Millions of Americans feel the same! There are several benefits that make it totally worth it, including:
24/7 Access to Your Money
You can get all the account information you need, whenever you need it, from the comfort of your own home. Better yet, if you’re always on the go like a lot of Americans, you can easily access your account anytime, anywhere.
Stay up-to-date on the status of your account, including your current balance, pending items, recent transactions, and more.
Need to send money to friends or family? Most online banks allow you to send money from your account directly to another account, at the touch of a button.
Helping Prevent or Minimize Fraud
With online banking, it’s easy to check your account regularly and notify your bank immediately when you see any unusual activity or a transaction that isn’t familiar to you.
Essentials for Budgeting
Many banks offer financial planning tools to help you set and meet savings goals, pay off loans early with extra payments, and more. These tools vary, so be sure to check your bank for availability.
A number of banks or credit unions offer financial incentives just for banking online. Some institutions may offer discounts and special rates with simple ways to qualify like signing up for direct deposit, making a minimum amount of purchases per month, or signing up to receive your monthly bank statement through email instead of the postal service.
No More Waiting for Statements
With online banking, your account statement is most likely available to view online or ready to download on the first day of the month. With that, you won’t have to wait around an extra three to five days at the end of the monthly period for your statement to arrive. If you use any 3rd party personal finance apps, you may be able to import your bank account information into the app, making balancing your accounts easy and stress-free.
HOW IT WORKS:
Getting Set Up
While easy to use, Online banking does require a one-time registration on the online bank’s website. Typically, you’ll need to enter the name on the account, provide your account number, and your Social Security number for verification. Then, you’ll want to create a username and password to manage your money online. You’ll also want to enter your email address to receive important communications.
Some online banks require you to register over the phone to get your account set up. If you can’t find the online banking registration form on your bank’s website, you may need to contact them for instructions on how to set it up.
Be sure to check your account regularly, and notify your bank immediately if you see a transaction that isn’t familiar to you or notice any unusual activity.
After the initial set up and registration, you’ll be able to log in and access your money at any time by entering your username and password on your online bank’s website. Once you’re logged in, you’ll see a dashboard or summary page that gives you a convenient at-a-glance look at your balance, transaction history, and more.
Most online banks offer a variety of financial tools including the ability to transfer money, pay bills, and more. When you first log in, you’ll want to take the time to familiarize yourself with the available features your Internet bank offers to get a better understanding of which ones would benefit you the most. Features vary from institution to institution, so if you don’t see what you’re looking for, contact your bank to see if it’s available.