There are certain things you have to take into consideration when trying to open a new account. These are some of those things.
Online banking gives you the ability to manage your money online — over the Internet, using your computer or mobile device — instead of visiting a bank branch, according to www.thebalance.com
Besides saving trips to the branch, you can view account balances, move money between accounts, and much more. In fact, you can probably accomplish more online than you can at a branch (and get better rates). You can also use third-party services and apps with even more to offer.
This article deals with how to start banking online. Some common tasks like paying bills, depositing cheques with your mobile device, earning interest on a free current account, borrowing money, and more, will also be highlighted.
How to bank online
If you’re just getting started, there are two ways to bank online:
Use your existing bank.
Open a new account (possibly with an online-only bank).
Use your existing bank
If you already have a bank account, you’re halfway there. Almost every bank offers online services — it’s just a matter of using them. At a minimum, it’s a good idea to sign up with your bank’s app or website, and it might also be worth looking into online-only banks.
Open new accounts online
If you don’t have a bank account anywhere (or you’re going to try an online-only bank), it’s time to open an account. A fully-operational bank account allows you to save a lot of time and money, and banking online helps you make even better use of your time.
First, decide if you want to use an online-only bank (which does not have any brick-and-mortar branches). Online-only banks are more likely to offer higher rates on savings accounts and free current account. However, physical branches provide valuable services that you can’t get from an Internet-only bank.
A combination of banks: The good news is that you can have the best of both worlds — use an account at a brick-and-mortar bank and open an account at an online-only bank. Internet banks are almost always free accounts (assuming you don’t bounce checks or overdraw your account) so it shouldn’t cost anything extra to keep another account.
Important things to know about online bank accounts
It’s always nice to go into things with your eyes wide open. If you’re new to Internet banking, you might not have considered where you might run into hiccups as you manage money online. This article helps you imagine a few things that can go wrong, and tells you how to deal with those situations.
Most consumers are actually quite happy with their online banking experience. They enjoy higher interest rates on savings, and they often have access to advances in banking technology (such as remote deposit) more quickly than they would at a traditional bank.
The issues mentioned in this article are becoming less and less prevalent as banks have improved and become more competitive over the years.
According to www.thebalance.com, below are things you should know about online bank accounts
1. Online bank accounts and speed
The Internet makes some things faster, and some things slower. Opening up an account may feel like a “hurry up and wait” situation. You’ll complete an application online, and you might even have to send in a paper document with your signature. This can feel odd, compared to the relative speed of most other transactions online. At brick-and-mortar banks, you can begin using an account almost immediately.
Likewise, deposits to your online bank account can be slow. If you get a big cheque and want to start earning interest, you can expect to wait if you’re going to send the cheque in. Now, the higher rate you earn may still make it worth your while, but it’s just no fun to wait.
What can you do about this? Use an online bank that allows you to deposit cheques remotely (with a computer or mobile device). Those deposits will start earning interest faster, and you don’t even need to pay for a stamp. But there’s a catch: banks limit how much you can deposit with your mobile device, so you can’t deposit large cheques this way.
What about getting cleared funds quickly? If you need to pay somebody with a cheque, an online bank account won’t help. However, you can generally do a wire transfer out of an online bank account (if your payee will accept a wire transfer).
2. You can’t spend it from your online bank account
You can’t take it with you when you go, so why not use some of that money? Online bank accounts have traditionally made it hard to spend your money – you really had to plan on keeping your money in the account – but things have improved since then.
To keep your cash accessible, use accounts that offer online bill pay or debit cards that you can use at an ATM or retailer.
3. Customer service with online bank accounts
Things are improving, but you may occasionally have trouble with customer service. With a brick-and-mortar bank, you’ll likely have some familiarity with the staff, and at a small bank, the staff might even know you well. If you’re the type of person who enjoys personal interaction, it’s easier to find that at a brick-and-mortar institution.
On the other hand, you might want to just get things done and move on about your business, in which case online banks are probably more efficient.
Sometimes, problems are easier to solve in person. If there is a mistake somewhere, a face-to-face discussion may be the most effective way to make progress when things are confusing. You won’t have to wait on hold and deal with an “escalation” process when everybody can sit down together and figure things out.
Why does the staff matter? It’s easier to get good service if you know them, they know you, and they know what you typically do with your accounts. You can pick and choose who you deal with if you’re familiar with the employees (hopefully there’s somebody there who you like working with).
Most online banks want you to call. You might get somebody helpful and knowledgeable, or you might not. On the bright side, you can always hang up and call back – hoping for a better qualified representative, but that’s frustrating.
In recent years, customer service has improved at most online banks. But in the early days, customers were sometimes “fired” or had their accounts closed for being too high-maintenance (if they demanded too much from customer service).
Other problems with online bank accounts
Sometimes online banking websites go down. When this happens, there’s no backup branch that you can go to – and the phone lines will be clogged. To protect yourself, always keep a local bank account open with some emergency cash so you won’t be penniless while they fix the problem.
Should I ignore online bank accounts?
You should not ignore online bank accounts. Unless you simply cannot tolerate any of the situations above, you’d probably benefit from opening an account. There are several reasons to consider online banks: they offer an easy way to bank for free, they’re your best bet for finding high interest rates, and they usually make life easier. You may never run into any of the problems mentioned above, and your overall experience will probably be great. However, you now have an idea of what can go wrong when using these services. (Punch Metro)