Internet banking works in a similar manner to traditional banking, the major difference being the way one is making payments, accessing his account and personal details, and reconciling statements. Rather than visiting the local branch of his bank, the customer uses his computer to complete transactions. Internet and traditional banking have their pros and cons to consider. The choice of online vs. brick-and-mortar banking is often based on one's lifestyle and priorities.
As a major advantage of internet banking, the customer can accomplish multiple tasks in the comfort of his home. Efficiency is what makes online banking attractive to customers: they can pay bills, move money between different accounts, check multiple accounts, and much more. Banking is fast and saves customers valuable time. Transactions are completed in seconds and one can print out the receipts for his personal records. The customer may access his account at any given part of the day, even during weekends and holidays. Moreover, the online account may be accessed from any place around the world, provided that internet connection is available.
make banking expedient, convenient, and inexpensive.
Online bank accounts get fees for the online banking services they offer. Furthermore, banks have higher interest rates on savings accounts and certificates of deposit, and offer more financial services and products. Customers don't need to buy envelopes and stamps, run to the post office at the last minute, and risk being late on their payments. Monthly bank statements and bills can be accessed electronically. Finally, online banking employs sophisticated tools that help manage one's money and accounts with ease. Despite increased security measures and the availability of anti-virus and anti-spyware programs, identity theft is still a concern. Other threats associated with online banking include phishing and hacking of online accounts.
Time is among the precious commodities, especially for multi-taskers. On the other hand, some people prefer to visit their local bank and interact with the teller in person. Customers can turn to the bank's special account representative or even to the bank manager. Clients are physically present when cash is handed over to them and when they place valuable items in their safety deposit boxes.
When customers hold their money in banks, they expect to have them available when required. The Federal Deposit Insurance Corporation offers coverage of up to $100.000 if banks cannot cover their clients' accounts. Most banks have increased the level of security by installing more surveillance cameras and hiring a larger number of security guards. With traditional banking, customers are better protected against identity theft. However, security is still a concern with traditional banking. While criminals cannot hold a gun to one's personal computer, they can rob a bank the traditional way.
Inconvenient locations, fixed schedules, and more limited financial services are some of the disadvantages associated with traditional banking. In contrast to internet banking, customers opting for traditional banking services need to draw money before using it.
The FDIC (Federal Deposit Insurance Corporation) pays up to $100,000 of coverage, in case that a bank cannot cover its accounts (both online and traditional). However, protection from identity theft is an aspect of banking that traditional banks take better care of.
Disclaimer: This article is provided for educational and informational purposes only and should not be considered a substitute for professional and/or financial advice. The information found in this article is provided "AS IS", and all warranties, express or implied, are disclaimed by the author.
John Stevenson writes about finance, loans, online banking, money, investing and credit.
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