Introduction to Online Banking

By Susan Landis-Steward , last updated May 31, 2011

Online banking is one of the great conveniences of the 21st century. Instead of writing checks to pay bills, you just go to a website or your bank's bill paying program, and the money is sent directly from your account to the person you owe. Online banking also allows you to have your checks deposited electronically by your employer, and allows you to see an up-to-date snapshot of your financial position in real time.

Online banking is convenient because, unlike the brick and mortar bank, the online bank never closes. You can check your account, shop online, transfer funds from one account to another, all online. If you need cash, it's only as far away as the nearest ATM. Even if you are traveling, you have access to your accounts anywhere you can get Internet access.

Online banking is also quick. Do you need to transfer money to a spouse or partner but not have time to go to the bank? A couple of clicks on your online bank and it's done. You can also pay car loans, mortgage payments, utilities, and most any other regular payment online. Many companies now have payment portals where you can enter your account number and make a payment. You can even set up automatic payments so you don't even have to remember.

Many online banking accounts also offer features that make banking more enjoyable. You can often track portfolios, apply for loans, download transactions into Quicken or Money, develop a budget, or even find out your credit score without leaving your home.

The biggest hurdle to online banking for some people may be trust. Younger people, who grew up with computers, may find it easier to adapt. Some folks just can't believe that the bank will handle their money for them so easily.

Be aware that it does take a few days to get online banking established and will probably require a trip to the bank to sign paperwork. There is often a learning curve as well, although most online banking sites have tutorials to get your started.

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