Online Banking can take different forms. Some online banking systems are software based--meaning you will need software such as Quicken or Microsoft Money in order to access your account (and you will only be able to handle your banking from your own computer). Other systems are Internet based--meaning you can access your bank account from any computer that is connected to the Web--from your home, office or while traveling.
Internet Based Banking. Our focus here are those banks which are truly Internet based and 100% available online--in other words, those banks without a "physical presence" of offices and branches. These banks also offer Internet-based banking, which can be accessed by any Internet computer, without the need of special software. Since these online banks have a lower business cost (they do not have to build, support and maintain expensive branches) their fees are generally lower and their interest rates (on your deposits) are generally higher than "traditional" banks.
Why Online Banking? Unfortunately, banking is a "necessary evil" that can take a large chunk out of already busy schedules. Visiting a branch or ATM, paying bills by paper check (and mailing them) and balancing a checkbook all can be time consuming. Banking online, by its nature, can automate many of these processes, saving you time and, in many cases, money. You can access your account and do your banking when (and where) it is convenient for you.
Deciding to Bank Online. If you have decided to do your banking online, we can give you lots of hints on getting the most out of the experience. If you are not sure about banking online yet, we can point out some of the advantages--and let you know of some potential disadvantages--so you can compare.
Online Banking Advantages
In general, you will find lower fees and higher interest rates for deposits due to the reduced cost of operating online and not needing numerous physical bank branches.
You will have easy access to account information and transactions, due to the fact that any Internet-enabled computer can become your "bank terminal."
You will generally have up-to-the-minute current bank account information due the automation of most systems.
In many cases, online banks like U.S. Bank offer free bill pay, which can be a big savings in both money and time.
You can transfer funds electronically between accounts.
Potential Online Banking Disadvantages
You will need to mail (or have direct-deposited) any deposits to your bank account.
Online banks generally do not have their own ATMs, although you will be able to access ATMs provided by many other banks. Most online banks offer a rebate for ATM usage.
Most online banks do not have any physical locations for you to visit if you prefer to transact your business in person and face-to-face.
DISCLAIMER: These referrals are offered as a service of Online Banking and do not constitute an endorsement of the above-mentioned companies. We assume no responsibility for the actions of or services provided by these companies.
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