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Online Personal Banking

Online personal banking provides convenience and security from the comfort of home.

Online personal banking can be conducted at any time of day. [©Jupiter Images, 2010]
©Jupiter Images, 2010
Online personal banking can be conducted at any time of day.

Online Personal Banking

Online personal banking allows people to handle all of their financial accounts over the Internet, often without ever having to step foot in a bank. The United Services Automobile Association (USAA), for example, serves millions of active duty military members and their families around the world, but their one brick-and-mortar office is located in San Antonio, Texas. Just what is online personal banking and why do people find it so appealing?

What is Online Personal Banking?

According to Bankrate, online banking is using the Internet to meet banking needs. Online banking is quicker than standing in line at the bank, allows 24-hour-a-day access and decreases wasted paper. Most large banks offer free online banking, which includes online account viewing, bill paying and initiating transactions.

A person can use online banking to check his or her account balances, pay bills, receive account statements, transfer money between accounts, stop a payment on a check, reorder checks, change mailing information and download an account summary and history.

Online personal bank accounts at banks such as Sovereign Bank are protected through a secure database that is encrypted using Secure Socket Layer (SSL) technology and firewalls. Account holders are given a user identification number and choose a secure password for account access.

There are many banks that offer free online checking accounts, and some of the common features provided are online banking, an unlimited number of checks that can be written and a free debit card.

How does Online Personal Banking Differ from Online Business Banking?

Online business banking is a bit different from online personal banking because it is designed specifically to meet business needs. Online business banking accounts allow up-to-date reviews of account information; controlled access for bookkeepers, accountants and controllers; the transferring of funds between accounts; access to bank statements; bill payment. Companies can also upload ACH files for processing payroll and paying invoices. Banks like First International Bank and Trust charge a fee to open a business account.

Online personal banking is free to set up and is used for strictly personal reasons. A personal account cant be used to process payrolls or pay invoices, but it can be used to manage personal finances, pay bills and examine account information online.

What should a Person Investigate Before Choosing an Online Bank?

To see if a bank is FDIC-insured, interested patrons can visit the Federal Deposit Insurance Corporations (FDIC) Web site. The FDIC protects money in insured bank accounts for amounts up to $250,000. Since the program started in 1933, not one person with money in an FDIC-insured bank account has ever lost their money, even when a bank failed.

People should pay close attention to the fees that banks charge, especially on small things. Fees vary by bank and can be very high. The fee charged for using an ATM of a bank that a person is not a member of has risen 25% since 2003 and 40% since 1995. Some banks even charge a fee if a customer with a low-balance account wants to visit one of their branches and talk to a teller in person.

There are dangers associated with conducting any type of business over the Internet, but scammers have frequently set up fraudulent bank Web sites in order to obtain personal customer information. When researching a bank, a customer should ask what type of authentication software the bank uses and what they do to guarantee that their customers information doesnt fall in to the wrong hands. Also, a person researching an online bank should find out what course of action the bank will take if there is fraudulent activity on the persons account.

What are the Benefits of Banking Online?

Online banking is convenient. It offers bank account access any hour of the day, seven days a week. There are no business hours and it is always open. Also, with online personal banking people can access their bank account even when they are traveling across the country or world. Online banking allows people to see how their finances are doing or handle a financial problem immediately, no matter where they are.

Another benefit of online banking is that people can access all of their bank accounts, investments, IRAs, CDs and more at just the click of a mouse. Depending on the bank they use, patrons may be able to access all of this information on one Web site.

Customers can set recurring bills to be automatically paid through their personal bank account, meaning that they will never have to worry about missing a payment or paying late charges again. Paychecks can be direct deposited into accounts as well, so most of a persons finances automatically take care of themselves.

There are many reasons people are choosing to use online personal banking, including ease of use, quality customer service and less fees. Customers want a bank that is secure and trustworthy and allows them to easily manage their cash flow.

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