There are many benefits to online banking, including:
Lower Fees and Better Interest Rates
Online banks usually offer lower (or no) fees and higher interest rates than banks with stores as they don’t need to spend money on branch maintenance.
You Can Access Bank Services Wherever You Are at Whatever Time
You can access their services, such as checking your bank balance or transferring money from one account to another, via a computer or device wherever you are and at whatever time. All you need is an internet connection.
This also means that there’s no driving to town, trying to find a parking space and waiting in a long queue, like there is with visiting a branch.
You Can Still Deposit Cash
It’s easy to deposit cash at a bank branch but it can be a little trickier if you’re online banking as depositing cash isn’t usually an option. Many online banks offer nationwide free ATM withdrawals so you can easily get cash out of an account, but if you want to deposit cash, you may need to try these methods to get the money in to your account:
- Deposit locally and transfer electronically. Online banks like Ally and Capital One 360 allow you to electronically link your account to another account at a traditional bank. Then, you can deposit your cash at those branches and electronically transfer the money over to your online bank.
- Buy a money order at a local retailer or post office. Then, you can make the order payable to yourself. There may be a small fee for this money order, but it’s a safe alternative to cash.
- Deposit cash via a linked ATM. Some online banks can collect deposits via cash ATMs so ask your bank if this option is available. Then, you can deposit your cash via one of these ATMs and the money will go straight into your account.
You Can Still Speak to a Real Person
You might have a complicated financial life or want some advice with an investment strategy. Or, you might just want that reassurance of speaking to a real person and not the robot behind the app when you’re banking. Many online banks still offer customer service phone lines and online chat messaging with real people if you ever encounter any issues or have questions.
Your Details are Still Highly Secure
Well-known online banks have robust security measures that are just as safe as traditional banks. Standard measures include using fraud monitoring and website encryption to scramble your data so only the intended recipient (the bank) can see it clearly.
You Have Access to Better Services
Online only banks tend to offer a greater range of useful and sophisticated services that aren’t usually found on the websites of traditional banks. These tools can help you get a more comprehensive banking experience.
For instance, tools like functional budgeting and forecasting, financial planning, investment analysis, loan calculators and equity trading can help you monitor your income and expenditure. Other tools like online tax forms, bill paying and tax preparation make paying bills and taxes more convenient.
But it’s completely understandable if you’re nervous about banking online. After all, you’re entering your details over the internet - a place where anybody could be watching. Right?
Well, not exactly.
The following steps can ensure your online banking is as secure as possible:
- Don’t use public WiFi when banking online, do it at home. On public WiFi, you can’t be completely sure of who sees what you’re sending online - whether it’s an email, an instant message text or the passwords to your online bank account. It’s much better to bank online at home. If you absolutely have to log in while you’re out and about, use your phone’s 3G or 4G instead.
- Make sure the webpage you go on is encrypted. Pages are secure if they start with “https” and a lock icon appears next to the address bar.
- Keep your firewall and anti-virus software up to date. This ensures your devices at home are protected from malware and cyber criminals who might steal your data.
- Switch up your passwords. Don’t use the same password or code for everything and ensure you use a mixture of uppercase and lowercase letters, characters and numbers. Then, change them regularly. This makes it harder for hackers to get your data.
- Sign up for email or text alerts. This allows you to always know when major changes occur in your bank accounts - for example, if the balance drops to a certain level or a large transaction has occurred. This means you can immediately contact your bank if you see something that might be unauthorised and take instant measures to protect your account against further activity.
- Double check that the online bank you choose follows industry standard security measures.Research what security measures your chosen bank uses to make sure they’re doing as much as they can to protect your data.
But What About Specialty Banking Services?
Online banks can work around cash deposits and writing checks. Some even provide loans, but they can’t do everything. For example:
- Wire transfers aren’t always an option. Going into a bank branch tends to be a better option when you’re sending time-sensitive transfers or sending over a significant amount. However, there are several alternative ways to send money online.
- There are no safety deposit boxes. If you have any valuable possessions or important documents that you’d feel more comfortable behind a bank’s impenetrable walls rather than in a personal safe, it’s better to visit a bank branch.
Despite this, banking online still tends to be a much more viable option than going to the branch, especially for rural communities. The benefits often outweigh the drawbacks, which is why the number of people in the UK banking online has risen from 30 percent in 2007 to 63 percent in 2017.
Make Sure You Pair Your Online Banking with Fast, Reliable Internet
As the name suggests, online banking is banking via the internet. To make sure that you get the most out of banking via this means, you need an internet connection you can rely on. Online banking is supposed to be easy and convenient, so you don’t want to be held back by slow loading speeds and the page crashing all the time.
Fast internet ensures that you can keep an eye on your transactions in real-time, manage your budgets and take action on any potentially fraudulent activities - among other benefits.