Online banking is the practice of making bank transactions or paying bills via the Internet. Thanks to technology, and the Internet in particular, people no longer have to leave the house to shop, communicate, or even do their banking. Banking online allows a customer to make deposits, withdrawals, and pay bills all with the click of a mouse.
For the online banking customer, the convenience factor rates high. No longer does a person have to wait for the bank statement to arrive in the mail to check account balances — he or she can check the balance every day just by logging onto the account. In addition to checking balances and transactions, customers can catch discrepancies in the account right away and deal with them swiftly. This can be done anywhere, as long as the person has Internet access.
Since bills are paid online, the need to writing checks, affix postage, and post the payment in the mail is eliminated. Once the amount is entered and the payee is checked off, the funds are automatically deducted from the payer's choice of account.
Since the cost to the bank is minimal, the cost to the consumer, in many cases, is also minimal. While there may be a fee for some online banking transactions, they are often extremely low. Those who use this type of banking often agree it's worth every penny, and not having to spend all Saturday morning standing in a crowded bank line is justification for most. It can even pay for itself since costs like postage and ATM fees are reduced.
Online banking also eliminates paper waste, which is a plus not only for those who have to handle all the paper work, but also for the environment.
Of course, there are also disadvantages. Security is always an issue with Internet transactions. Although information is encrypted, and the chances of an account being hacked are slim, it happens. Banks pay a lot of money to install high tech firewalls, however, and chances are good that a customer's money is in good hands.
People who do all of their banking via the Internet may also miss the personal service available at the bank. No smiling teller or representative hands the customer a receipt. Instead, except for what's recorded on the account, all the paperwork is the responsibility of the customer. Experts recommend that people always print copies of important transactions.
If someone needs to deposit cash or checks, he or she will probably still have to spend time at the ATM. Unless a payment is directly deposited, it often has to be handled manually. Still, for most customers, the benefits far outweigh the risks and minor inconveniences.