Monday, July 20, 2009

Online Banking Pros and Cons

Like most people, you have probably heard a lot about online banking. Most of the major banks are offering the convenience of banking online. If you have not tried online banking you are probably still banking the old way - paying your bills by mail and going to your local bank branch to make deposits. You may look online for information regarding a mortgage, life insurance, or a personal loan, but when it comes time to make a move, you feel more comfortable dealing with an actual person - a banking associate or your insurance agent.

Why Use Online Banking

For years the banking systems have used computer networks to automate their daily transactions; improving with the changing times. Today, advanced technology gives you the option of bypassing the traditional banking - standing in lines, filling out deposit slips, going to your branch to withdraw money, and so on. Online banking allows you to manage your finances quickly and more efficiently.

Banks view the online option as an added value to attract new customers and retain the old ones. This method of banking helps to keep costs down by eliminating the paper trail and teller transactions associated with traditional banking.

How safe it is to bank online?

The banking industry is faced with the challenge of designing a system that is customer friendly and secure. They take every available precaution to ensure your transactions are secure.

To attract customers and lead them to online banking, many institutions offer added values such as free checking or "limited time offers," for signing up and using online services. Many of the larger banks offer fully function online banking enabling you to view your account balance and history as well as apply for loans, work with your IRA and CD's right from your desktop.

Advantages of banking online

  • Convenience: Your online bank never closes; you have access to your account 24 hours a day, seven days a week.
  • Availability: If you're out of state or out of the country, you can instantly log on to your online bank and take care of business, 24/7.
  • Quick Transactions: Online bank sites generally execute and confirm transactions at or quicker than ATM processing speeds.
  • Efficiency: You can access and manage all of your bank accounts, including IRAs, CDs, even securities, from one site.
  • Effectiveness: Many online banking sites now offer sophisticated tools, including account aggregation, rate alerts, stock quotes, and portfolio managing programs to help you manage your assets more effectively. They are often compatible with programs such as Microsoft Money or Quicken.

Disadvantages of online banking

  • Start-up time: In many cases, you will have to go to a branch and provide identification before registering online.
  • Learning curve: At first glance, banking sites can appear difficult to navigate at first. Most often tutorials to help you through this process. Once you have learned how the system works, you can complete your banking in minutes.
  • The trust factor: This is a big mountain to climb for most people. Learning to trust the online banking system just takes some getting used to. Did I push the transfer button once? Did my transaction go through?

Some welcome the change; others are still a bit hesitant. As with anything the deviates from the norm, it takes some getting used to. Once you are familiar with the process, you will wonder how you ever lived without it.

By : Jason Karp
For more information on sending money or money transfer both within the United States and abroad visit Send Money

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