INTERNET BANKING

In this site:

+ Background on internet banking
+ What are the important features of internet banking?
+ How to choose the best online bank for me?

Background on internet banking
internet banking is growing more and more popular with consumers and with banking institutions. Consumers are finding that the convenience of being able to view account information online, make transfers to other accounts, and to pay bills online is much more preferable than the more traditional methods of banking. Banks and other financial institutions are finding that they can not only reduce costs by providing services online, but that internet banking features improve customer satisfaction, boost retention, and improve overall profits.

Virtually all major banking institutions and more and more regional and local banks already have some form of internet banking to augment their traditional 'brick and mortar' banking system. Some banks are products of the Internet age and are strictly online banks with no physical branches. Each bank or financial institution has it's own particular mix of online and in-branch products and services, and this site was designed to help you choose the right bank for you.

What are the important features of internet banking?
For the most part, the same features that are important with traditional banks are the same features that are important with online banks. Here are some of the most important considerations when evaluating a particular bank:

Access to funds
Having access to your funds when banking with a traditional bank is pretty straightforward- you can walk into a branch at any time and simply withdraw your funds. For a 100% online bank, you will need a way to get your funds without going to a branch. 100% online banks will typically give you the ability to transfer funds to other banks, will allow you a higher ATM withdrawal limit, or will overnight funds to you at your request.

FDIC Insurance
Virtually all banks provide FDIC insurance on your checking and saving accounts. This is federal insurance that protects the deposit holder in the event that the bank becomes insolvent. However, you should be aware that some investment services provided by banks are NOT FDIC insured as they are considered investments rather than deposit accounts. Make sure that you understand and confirm what sort of FDIC insurance (there is a limit to the amount of coverage for any particular account) you have on your prospective account(s).

Suite of services offered
When considering any bank, make sure to find out if they offer the complete suite of services that you'll need, such as savings account, checking accounts, investment services, credit/debit cards, CDs, and loans such as mortgage, auto, etc.

Banking Fees
Each bank has a unique fee structure that cover such items as returned checks, minimum account balances, ATM fees and other services that the bank may charge you for providing. Make sure that the particular set of fees works well with your unique financial situation.

Access to ATMs
One of the perceived disadvantages of online banks is that they don't offer ATM service because they don't have physical branches, but this is actually not true most of the time. Most online banks and financial institutions do have arrangements with ATM networks to allow their customer access to ATM machines. Many of these ATMs can be used to deposit funds as well as withdraw funds.

Bill Pay
Most traditional and all online banks provide you the ability to pay your bills online. Online bill pay is a major convenience that allows you to pay your bills without having to write checks and keep a register. It also saves a few dollars in stamps every month and you never have to worry about a payment getting lost in the mail. Online bill pay services are different from bank to bank, but all will allow you to set up a list of payees that you can then send payments to directly from your account(s). You can typically set up payments that are of a set amount and that the system will automatically pay for you every month, such as a mortgage or car payment.

Customer Support
One of the major conveniences of online banking is that viewing and managing your accounts is typically available 24 hours a day. However, there is a difference in customer support and technical support. If you experience technical problems with your account, the technical support group may not be available 24 hours a day.

How to choose the best online bank for me?
When searching for a bank that also offers online services, you should keep in mind that the bank should match your personal banking needs. For example, if you prefer paying bills online but usually do so late at night, you might want to make sure that technical support would be available during those hours. Also, make sure to find out if there is a monthly charge for online bill pay. If you prefer to pay for most things with cash instead of a credit or debit card, you should look into the convenience of the bank's ATMs and cash withdrawal limits.

Beyond those issues, try to match your unique spending and financial patterns with a bank. Make sure to understand all of the fees and minimums associated with your typical balances and payment history throughout the month so that you don't routinely get hit by unnecessary fees. If you typically carry a balance on your checking or savings account, find out what interest rate for each you would earn. Also, find out about free checking where the bank would pay for your checks.

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