Most banks offer online banking services that allow you to pay bills, transfer money, and access your checking account transaction history from your web browser. Banking from the comfort of your couch, any time of the day or night, makes everything you do with your finances a little easier. Here are five advantages of online banking over a traditional bank.
Pay your bills online
You can use your bank’s website or app to pay your bills online and not worry about your check getting lost in the mail. Most banks have a section where you can configure payees. You will need to fill in the information once, then you can simply choose this beneficiary each time you need to make a payment.
Most online banks will allow you to set up a recurring automatic payment of the same amount each month. This feature is useful for an expense like paying for a car or rent that doesn’t change from month to month.
You can also authorize a payee, such as a power company or credit institution, to automatically debit your account for the amount you owe. You can set up automatic debit by first going to the company’s website and creating an online connection if you haven’t already. You will then have to go to the billing or payments part of the website and click on a link mentioning automatic payments. You will need to provide the number of the checking account you want the money to be debited to, as well as your bank’s routing number.
By authorizing a payee to debit your account, you give payment control to the seller and not to you, the payer. It’s best to set up a recurring payment from your bank account to make sure you only pay what you owe.
View your transactions at a glance
Online banking allows you to access your account history and transactions from anywhere. This is the fastest way to find out if a transaction has been made on your account. It also allows you to discover any unauthorized transactions more quickly, so you can dispute them immediately.
Many banks will show you your current transactions. These are transactions that were initiated on the current business day or after the close of the previous business day and therefore have not yet been completed.
Pending transactions may not reflect the exact purchase amount. For example, if you pay a bill at a restaurant with your credit card, the tip will often not be included in the amount of the pending transaction. The full amount, including the tip, will appear in your account once your bank has authorized full payment.
Transfer money between accounts with an online bank
You can quickly transfer money between your accounts when you do it online. It’s more convenient than going to a bank in person or using an automated phone service, which requires you to provide information when asked.
If you are transferring money between different types of accounts at the same bank, the transfer should be completed on the same day. If you are transferring money to an account at another bank, the transfer may take up to three days.
When you have more than one savings goal – for example, for the down payment on a house and for the cost of a wedding – you can consider opening several savings accounts and transferring money easily from your current account to these accounts. Savings accounts generally have a lower minimum balance than checking accounts – and some banks don’t require one at all – so you won’t have to start with a lot of money.
Do your banking on your phone with a mobile app
Most online banks offer a mobile app that makes it easier for you to take advantage of online banking services on your phone. You can quickly check your accounts when you shop, transfer funds to avoid overdrafts, or make sure a merchant hasn’t charged you twice.
Banking apps typically allow you to deposit checks by using your phone’s camera to take pictures of the front and endorsed back of the check. You should usually write something like “For mobile deposit only to [bank name]” on the back of the check.
Make sure you are using your banking app on a secure network; to prevent the theft of sensitive information, never access it using a public Wi-Fi network.
Synchronization with your budget applications
Many budget apps, such as Mint and PocketGuard, can be synced with your online banking information. This feature makes it much easier to stick to your budget.
If you have a spouse or partner with whom you share bank accounts and credit cards, you might want to look for an app that allows you to easily sync your information. Better Haves, HomeBudget, and Honeydue, for example, are budgeting apps designed specifically for couples or households.