As more and more businesses are offering their services to customers online, the banking industry has followed suit. The widespread availability of online access is changing how many of us bank, from monitoring checking balances to transferring money between accounts, accessing customer service, and paying bills electronically.
Women as online bankers
Women represent a significant portion of Americans choosing to do their banking online. In the first third of 2000:
- Twenty-four percent of women currently bank online.
- Forty-eight are "strongly considering" testing the online banking waters.
Advantages to online banking
There are many advantages to online banking. Here are just a few:
- All of your records are stored in the software and so are easy to access and locate.
- Some banks offer proprietary software that works exclusively with their system, while others allow you to use commonly available programs like Quicken, Managing Your Money, or Microsoft Money to initiate transactions.
- Some banks only have an on-line existence, which allows them to charge lower service costs because they have minimal physical overhead.
- Electronic bill paying saves you much of the monthly hassle of writing checks and mailing envelopes.
Her Tip: There are usually some fees associated with online banking services. They are generally either annual or monthly. You'll have to check with the institution itself for details on what it offers.
Is online banking safe?
If you're new to the online banking game, as many of us are, you may be concerned about the safety of conducting your banking online. Here are a few things that you should know:
- Most online banks will provide information about the safety measures they've taken to protect their customers. Read this carefully and be sure that you understand it before going forward.
- Look for the term encryption somewhere in the bankˇ¦s safety message. This means that the data you've provided will be sufficiently scrambled so that only the intended recipient can use it.
- Most online banking services are password and PIN (personal identification number) protected to ensure safety.
Do your homework
It is important not to jump into on-line investing unless you have a solid understanding of what is going on. Although it might appear like a game, it is not! For more information click here for investing. As with all financial decisions, careful planning and informed decisions will help to make your online banking experiences a positive one. Here are a few tips:
- To get the best deal you must do extensive research.
- Some banks offer free checking if you are a shareholder or if you set up direct deposit of your paycheck. Inquire about these and other deals offered to online customers.
- Compare fees, yields, and minimum deposit requirements carefully. Remember that these can add up quickly, so you'll want to be sure you understand all that youˇ¦ll be charged with each online service provider.
HerTip: Look for a bank that will contact you before you bounce a check (writing a check for more money than is in your account). And ask your bank to give you a credit line -- an automatic loan the bank will extend to you if your check bounces. Credit lines are also known as no-bounce checking, cash advances, overdraft protection, or advance accounts. These can save you significant sums in exactly those times that you need your money most.
What can an online bank do?
Most online banks can do just about anything your regular bank can, including:
- Monitoring account balances
- Transferring money between accounts
- Customer service
- Paying bills electronically
- Investing
Let's look at bill paying and investing more closely now.
HerTip: Deposits that you mail take longer to clear than those made on-line.
Paying bills electronically
When you're working out the kinks of paying bills, take a moment to consider the option of online banking. More and more people have taken to paying their bills online. It's a no-fuss alternative to mailing checks out each month. Advantages include:
- Online bill payment is easy to set up -- finding your payee is easy. Many banks have a ready-made list of standard payees such as electric and gas utilities and credit card companies.
- Electronic payment is certain and immediate. The check is never "lost in the mail."
- You'll have excellent records of the bills you have already and are planning to pay.
- Keeping track of tax information is easy. You can print out all your payments that may generate tax deductions, such as medical expenses or charity donations.
- Interest saved is interest earned. Electronic payment allows you to hold onto your money for a longer time so you can continue to earn interest on the funds. With off-line bills you must withdraw the money way ahead of time to make sure payment arrives in a timely fashion.
Investing
The Internet has had quite an impact on the brokerage industry. More and more investors are shedding their traditional brokerage relationships and giving online investing a try. Many women enjoy online investing because of its low fees, easy access, and anonymity (no one over your shoulder to watch what you are doing).
You have several options when it comes to selecting a firm with which to open your online brokerage account. One way to begin is with a discount brokerage firm like WFNInvest. Discount brokers, like ours, offer their clients high-integrity products and services at a significantly lower rate than full service firms do. In our case, for example, the commission rates are up to 80% below the full-service firms.
With a discount broker, you can invest your funds in a full range of products including individual equities, bonds and other fixed income securities, mutual funds, money market accounts and more. You also have access to research, information on up and coming initial public offerings (IPOs), timely updates on how your portfolio is performing and more. Although many discount brokerages are able to service their clients personally, the only thing you can not receive with such a firm is direct investment advice. It is up to you to ultimately make your own investment decisions.
Click here to find out more about what WFNInvest offers.
Continue to: Part VI: How to read your bank statement and balance your checkbook
How Banks Work