Online Banking

The benefits of online banking are numerous. Online banking offers access to account information 24 hours a day seven days a week (except when systems are down for maintenance). Banking can be done from anywhere in the world at any time, including weekends, and holidays. Viewing account balances and transferring money between accounts are just a few of the perks. Many banks offer their customers free online bill paying, which eliminates the need for envelopes, stamps, and going to the post office. Bills can be received directly in the system and the account holder will be notified when a bill is ready to be viewed. One click of a button will pay the bill within 1 to 2 business days, or an automatic or recurring payment can be setup. Online banking is also helpful with balancing a checkbook and viewing past transaction history. At some banks, it is even possible to view an actual copy of a check that was deposited. With online banking, old statements can be obtained instantly. Accounts can be opened online without a personal visit to the bank. Auto, mortgage, and personal loans can be applied for instantly.

There are a few drawbacks to online banking. Access to a computer and internet is necessary. Also it is important to have good computer skills to avoid a lot of frustration in navigating the sites. Occasionally banks will upgrade the layout of the screens or add new features, which require the customer to learn how to navigate the new site after becoming familiar with the old. There is also the problem with hackers who may gain access to another person's account. Although banks offer extra layers of protection that other websites may not have, vulnerabilities still exist.

Online banking should not be confused with virtual banking. A virtual bank is a bank that operates solely online without tellers or branches. Virtual banks save money by not paying rent, mortgages, or salaries to tellers. As a result, they can pass on these savings to customers in the form of higher interest rates on savings accounts or certificates of deposit. Where virtual banking is done only online, traditional brick and mortar banks utilize online banking as an bonus to already existing services. The downside to virtual banking is that no ATMs exist. As a result, fees are incurred when a customer has to get money from a different banks ATM. Also deposits may need to be done by mail as other banks often will not accept deposits via ATM. Despite the challenges, both online banking and virtual banking are becoming more prevalent each and every day.