As so many things have moved online, so have checking accounts. Checking accounts online offer many conveniences and financial savings that more traditional accounts do not. However, they are not without their drawbacks.
When opening internet checking accounts, people first need to look at the same things they would if they were opening a more traditional checking account. Apart from offering all the needed services, the bank should be reputable and FDIC insured.
The safety of online checking accounts
The first concern of many when opening internet checking accounts is safety. The internet can often be lawless, and people are naturally wary with their money. Also, banks do not offer the same kinds of risks-free guarantees with banking accounts as they do with credit cards.
As a general rule though, online checking is safe if one follows basic security precautions like using a firewall on their computer (never login from a public computer) and never responding to unsolicited emails. Any reputable bank will have stringent security features to avoid unauthorized transfers. In fact, they offer certain security advantages since online checking eliminates the need to send personal checks through the mail (mail is sometime stolen, checks “washed” by thieves and then used to withdraw money from the account).
Advantages of free online checking accounts
Some of the advantages can be seen in the checking account deals that many banks offer to entice users to go online. Since online banking saves the banks on some operating expenses such as reduced personnel costs and more paper-free transactions, they offer their online customers incentives not offered with other accounts. For example, interest bearing checking accounts can be found a lot easier online, and other services such as overdraft protection are better for online accounts.
Online bill pay
The biggest advantage for most is online bill pay. It offers many benefits vs. more traditional methods. Payments are sent electronically or mailed from the bank. This makes payment much safer and faster. Once a payee has been setup, future payments can be made automatically or with a few mouse clicks. This saves on mailing costs and time. Most online checking accounts allow more free transactions each month than the typical user needs to handle all their payments. Also, one is much less likely to accidently make an overdraft when banking online.
Other benefits of online checking
With checking accounts online, anyone can handle banking and payments 24/7 from the comfort and safety of their homes. For those times when cash is needed, online bank accounts offer access to more ATM machines, usually with a number of free transactions every month, as an incentive to bank online.
Disadvantages to checking accounts online
Online banking has its drawbacks though. One of course has to be careful with security and watch out for scams such as phishing attempts to steal account numbers and passwords. Also, many miss the face-to-face interaction that is lost with internet banking.
Furthermore, while most interfaces are pretty simple, online checking accounts require a degree of technical skill that some are not comfortable with.
In short, while online banking is not for everyone and some will never be comfortable handling their money online, it does bring significant advantages and ways to save money and time while offering greater convenience.
