Online banking enables you to perform out similar financial transactions that you would at a traditional bank, but through the internet. Whether through a bank, credit union, or an online-only institution, online banking allows you to manage your finances via a website or mobile app. Often referred to as mobile banking when done on a smartphone or tablet, this convenient option lets you handle your banking needs from anywhere. If you’re considering whether online banking is a good fit for you, keep reading to find out more.

Online Banking: What is it?

Online banking, simply put, is the process of completing financial transactions over the internet. Rather than going to a nearby bank branch to deposit money, transfer funds, or pay bills, you can manage all these tasks through your financial institution’s secure website or mobile app.

Online banking allows you to manage your accounts anytime—day or night—even outside of regular banking hours or on holidays. However, some transactions, like check deposits, may still require processing time based on your bank’s operating hours, so there could be a delay before they are finalized.

Pros of Online Banking

1. Flexibility: You can view your accounts and bank statements from anywhere with a secure internet connection, without needing to visit a physical branch.
2. Convenience: If you’ve been holding onto a check for a week and can’t make it to the bank, online banking lets you deposit it anytime, 24/7.
3. Banking Services: Most services available at traditional banks are also offered online. However, some smaller community banks and credit unions might not have the technology to provide all the banking products you need or want.

Cons of Online Banking

1. Security: Online banking is generally secure if you use a reputable bank or credit union with standard security measures and your funds are insured by the FDIC or NCUA. To enhance security, avoid using public Wi-Fi, keep your login and personal information safe, and be cautious of suspicious emails or texts that appear to be from your bank.
2. Cash deposits: If you often carry or get paid in cash, an online-only bank may not work for you.
3. Limited Options: While many large banks offer services online similar to those at their branches, some services like buying money orders, accessing safety deposit boxes, or getting documents notarized are typically not available online.
4. Impersonal: Online banking can feel impersonal if you prefer face-to-face interactions with banking associates. While many banks offer chat support, it doesn’t replace the personalized help of in-person consultations.

What Transactions Can You Do Online?

Online banking services differ between banks, but typically, you can use them to carry out nearly all the activities you would normally do at a physical branch. Some of the most common transactions you can complete online through your bank’s secure website include:

Deposit Funds

If you’ve ever kept a check in your wallet for weeks because you couldn’t find time to visit the bank, you’ll be relieved to know that most banks and credit unions now offer the option to deposit checks online.

To deposit a check through online banking, you’ll usually follow these steps:

• Open your bank’s mobile app.
• Sign the back of the check.
• Take a photo the check’s front and back with your phone.
• Select the account for the deposit and tap “Submit.”

Keep in mind that banks often require check verification, so the funds may not be available for immediate withdrawal.

Bills Pay

Online bill pay simplifies the process of managing your bills by allowing you to pay most, if not all, of them in one place, instead of tracking down individual monthly invoices or statements. Once you’ve registered and created an account, you can add payees, schedule payments, make one-time or recurring payments, and set reminders for upcoming due dates. Keep in mind that it may take a few days for your bank to process and complete the transactions, so plan accordingly.

Account Management

Accessing your bank accounts online gives you real-time information, so you always know your current balance. You can view a detailed account history, including incoming funds from checks or direct deposits, and track outgoing payments and ATM transactions. This helps you stay on top of your financial activity and quickly identify and address any transactions that might be due to fraud or errors.

Intrabank Transfers

If you have multiple accounts, such as a checking account, savings account, and line of credit, online banking allows you to check balances and easily transfer funds between accounts. This is particularly useful if you maintain a minimum balance in a low-interest checking account and only move money from a high-yield savings account when needed for bills or large purchases.

Order Checks

Many big banks and credit unions allow you to order checks and deposit slips online via their website. You can typically view costs and browse a full catalog of check designs. If there is a fee, it will usually be deducted from your checking account when your order is processed.

Review Account Balance and Statements

Online banking allows you to receive electronic billing statements and check your account balances anytime. It also helps you track which bills have been paid and whether deposits have been fully processed.

It’s important to distinguish between your current and available balances. For instance, if you’ve paid $350 in bills and deposited $100 that hasn’t been processed yet, your available balance might be $250 less than your current balance. To avoid overspending, always rely on your available balance, as it provides a more accurate picture of your actual funds.

Additional Services

Some banking institutions may offer additional services online, such as free access to your credit score. Other online services your financial institution might provide include:

• Requesting a stop payment
• Setting up alerts for fraud and low balances
• Facilitating bank-to-bank transfers
• Transferring funds
• Finding an in-network ATM
• Updating your personal contact details
• Requesting a new debit card

Final Thoughts

Ultimately, the best banking option for you depends on how you prefer to access and manage your money. If you’re comfortable handling tasks like depositing checks and making transfers from your computer or phone, online banking could significantly simplify your banking experience.