What Should I Consider When Using Online Banking?

Sherry Holetzky

Online banking is revolutionizing the banking industry, and there are different types of Internet banking programs from which to choose. Online checking and bill paying are two popular options. Many times, banks are able to provide free checking if you choose an online account, because there is less overhead involved with managing your account. Look for free checking or online banking programs that charge minimal fees.

Double checking a banking website's URL can ensure that financial information is secure.
Double checking a banking website's URL can ensure that financial information is secure.

Something else to keep in mind when you register for online banking is security. The security of the online banking service as well as your own computer security is important to avoid identity theft and other types of fraud related to your bank account. Make sure you have a reputable anti-virus program and keep it updated. A firewall is a good idea too, as are spyware removal tools.

When choosing a bank for your online account, it's important to choose an institution that is FDIC insured.
When choosing a bank for your online account, it's important to choose an institution that is FDIC insured.

You can also help protect your security by choosing a password that is difficult to crack. A mixture of letters in both upper and lower case along with numbers and symbols is preferred. Make your password or pass code as many digits as possible to make it even tougher to crack. Be sure to log off completely after each online banking transaction and do not leave your password where others can find it.

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Use a firewall and take other security precautions when banking online or through mobile devices.
Use a firewall and take other security precautions when banking online or through mobile devices.

Do not open other windows in your browser while conducting online banking transactions. Never give your password out over the phone or via email. Online banking services will not ask you for this information other than during the log-in process, wherein your password should be encrypted.

Some online-only banks say they can keep rates low and offer better interest earnings than conventional banks because they have less overhead.
Some online-only banks say they can keep rates low and offer better interest earnings than conventional banks because they have less overhead.

Customer service is also something to consider when you decide to use online banking. Is customer service only available by email or is there a phone number you can call in case of emergency? How long does the bank generally take to respond by email? When will you receive your statement and will it be a hardcopy or an email statement? Also, find out how you can report lost or stolen bankcards and fraudulent transactions. If you don’t report such activities within the appropriate time — generally about 60 days after the last statement date — you may be held liable.

Financial transactions may be processed on computers via an Internet bank.
Financial transactions may be processed on computers via an Internet bank.

Another important thing to consider is whether or not online banking transactions are protected by the Federal Deposit Insurance Corporation or FDIC. This is important not only because your money is insured up to $ 100,000.00 US Dollars, but also because federally insured banking institutions are held to higher standards. They are required to meet fair lending regulations and also held to higher standards in regard to customer privacy.

Daily balances and charges can be checked via online banking.
Daily balances and charges can be checked via online banking.
Look for free checking or online banking programs that charge minimal fees.
Look for free checking or online banking programs that charge minimal fees.
A sign in interface for an online bank account.
A sign in interface for an online bank account.

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