Internet banking has taken off in recent years – as many as 80% of Americans prefer online banking over visiting a brick-and-mortar establishment.
What makes online banking services so appealing? Aside from the convenience and security of online fund transfer services, e-banking allows you to manage and track your transactions as they happen. After opening an online bank account, waiting in long lines or losing track of your financial statements can become problems of the past.
Below we’ve explained how e-banking works, as well as the importance of internet banking to achieving your financial goals.
What Is Internet Banking?
Internet banking, also known as online banking or e-banking, is a digital platform that allows users of a bank to make financial transactions online over an internet connection. Internet banking often provides most – if not all – of the same services as a traditional bank location, including deposits, transfers, and payments.
In recent years, it has become the industry expectation for banks to offer e-banking services that can be accessed by any individual who has created an online banking account with their bank. Some banks have even integrated mobile banking apps into their e-banking options.
Users will create unique users IDs and passwords to access these services. Some banks use biometric authentication methods like Touch ID or facial recognition to keep users more secure.
Services and Features of Internet Banking
While every bank is different, most have adopted a comprehensive online banking system to keep up with the lifestyle of the modern consumer. Here are features that many banks offer via their online portals.
- Secure login with unique ID and password
- Numerous customer service options and points of contact
- Set-up or cancel automatic payments
- Make bill payments
- Create accounts
- Transfer funds between accounts
- Deposit checks
- Check balance at any time
- View transaction history
- Check on mortgages, loans, and savings linked loan account
- Apply for the issuance of a checkbook
- View special offers
- Plan and track savings
- Link investments to the account
Because online banking has lower overhead than a physical location, the plethora of services are available at a low cost that can be passed on to consumers. Usually, banks will only charge a small fee – sometimes as little as $5 a month – for maintaining the account.
Electric Fund Transfers (ETFs)
When you use electronic banking, the term you’ll likely hear the most is electronic fund transfers.
Put simply, EFTs are the transfer of funds from one account to another via electronic methods. ACH (Automated Clearing House) and Wire Transfer services both are viewed as electronic fund transfers. ACH is often referred to as an EFT since ACHs are always EFTs and EFTs include ACHs under their domain.
ACHs are the most popular way to transfer money. Automatic Clearing House is an electronic network that processes transactions in groups. The National Automated Clearing House Association manages the administration and function of the network, ensuring payments are smooth and secure.
Usually, an ACH transfer will take a few days to complete because it requires confirmation from the receiving party. ACH transfers include payroll direct deposit and online bill payments.
Meanwhile, wire transfers are used for individual transactions. With a wire transfer, you can send money to someone usually within the same day, regardless of their location. Wire transfers are more expensive than ACH due to the speed of the transaction.
Advantages of Internet Banking
E-banking will provide you with security, convenience, and peace of mind. Here are just a few reasons why online banking is used by the majority of Americans.
Unlike traditional banking, internet banking does not require you to follow a 9-5 schedule. You can view your account and access services 24/7 throughout the year. You will also be able to view several customer service options, often with the ability to chat with a live agent.
Most of the services are not time-bound. You can check your balances, deposit checks, transfer funds, and even view your credit score at your convenience.
Convenient Management of Transactions
Managing your personal finances is simply more convenient with online banking. For instance, you can view breakdowns of all your bank accounts, as well as your total savings. Having a comprehensive understanding of your finances will help you make better decisions.
You also avoid the time and headache spent visiting a bank location. Online banking means no queues or wait times. You can access all of your services regardless of your location.
Automatic Bill Payment
Paying bills using traditional methods leaves room for error. Mail can go unopened for weeks or get lost after you send in your bill. You may forget to make payments and have to pay higher interest rates as a result.
E-banking offers the choice to opt-in for automatic bill payment, so you don’t have to actively make payments each period. You can even create a separate savings account with funds designated toward that specific item so you can track your payment process.
Instant & Secure
Internet banking allows for the instant and secure transfer of funds, especially if both accounts are held at the same bank. Users also have real-time tracking of these transactions, assuring them during the process and providing the exact time when the transaction is complete.
With a quick view of the ‘Transaction history’ page on an online banking profile, individuals can view detailed information about recent transactions, including the date and time of payment.
All transactions also are protected with another layer of security. Unique customer IDs and features like fingerprint authentication, make it difficult for malicious users to access private information.
The Importance of Internet Banking for Your Financial Health
The financial world is becoming more reliant on the internet every day – and it’s no surprise. Using e-banking will make your transactions secure and fast while giving you real-time updates.
Understanding the importance of internet banking is the first step toward achieving your financial goals. Contact our team at the Signature Bank of Georgia for guidance on managing your accounts and finding the best solutions for you.