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Banking Basics 101: Online Banking

For those of you that have been sold on the idea that you do need the services provided by a bank, and those of you who have been banking for a while, we all have the same issue; how do I track my accounts and spending?

Overdraft fees on average are going to cost you $35. If you factor in possible returned item fees, a non-sufficient funds incident may cost you an additional $35 per transaction. I have seen someone miscalculate their balance and end up hundreds of dollars in the hole just from the fees that snowball. Having worked as a financial services officer for a credit union, I have seen hundreds of situations that could have been avoided just from simply balancing your check book.

Online banking: the new checkbook balance

If you think about it, balancing your check book is probably one of the simplest ways you can avoid fees. However we often fail to complete this simple procedure because we are either too busy, or we are just too lazy. For me it is the latter. I mean really, how hard is it to list your deposits, subtract your debits, and list any outstanding checks? But time and again I failed to do this, and often times it did cost me in the long run. How did I overcome my abject laziness, and learn to take control of my accounts? Two words have saved my life: online banking.

Online banking tools are probably your biggest ally in taking control of your money. Online banking comes in many forms, whether it is a recurring bill paid to your utilities or the way that you balance your check book. The best bank or credit union websites go well beyond bill payment, and updates on your balance to provide you all the same service you would traditionally get from a bank branch. These sites offer bill payment, updates on your deposit accounts and credit card accounts, and sometimes even updates on your investment or brokerage accounts. With some banks you can even make stock trades and get free stock quotes.

Banking is secure

You also may be asking, are these services secured? The answer is yes. Banks with online services have gone to great lengths to protect the security of your online transactions. Both through secured servers with multiple layers of security, to adding new layers of encryption to data so that scammers and hackers have a harder time getting at your data. So in short, yes your data is extremely secure and your information is safe from corruption. However, security does take effort on part of the customer as well. You have to be extremely careful who you give your banking information too, and be quick to report suspicious activity to your bank or credit union.

Perhaps the best tool that online banking provides you is ease of use in tracking your expenses and keeping up with your balances. Most banks with online services will not only keep up with your deposits and debts, checks, and bill pays, but they will also track in real time your transactions that have not yet posted. This is the most accurate way short of writing everything down in your check book register to track your expenses, as well as your money.

Linking accounts

By linking accounts through your online services you have more options, such as moving money between accounts online, paying a loan account or credit card with that bank. Since you do it online it’s much quicker because the transactions often occur in real time. Keep in mind posting times are different so the money may debit the account but not post to the other account until the next day depending on how your bank posts transactions.

Use with Apps/Websites

Another advantage of using your banks online services is the fact that the information can often be uploaded to an outside tracking resource. As an example, Mint is a free online service that allows you to track your accounts, spending and saving. You can link all of your accounts, even credit card and investment accounts to their site. The site securely signs in to your online accounts and puts everything in one place for you. You can even download Android and iPhone apps that brings your account data to your phone. There are options available with Quicken that will allow you do to the same. I personally use Mint, and suggest it to everyone I talk to.

Now more than ever, you have unprecedented access to your financial information. Online banking is a massively useful tool that will help you to better handle your money, and to reach your financial goals. If you have questions or concerns I would suggest dropping into your local branch and having them go over your options, and even help you set up your online account. Don’t you think it’s time for you to take control of your finances, and get the most from your banking experience?

Stay tuned for our next post on alternatives to traditional banks.

Image source: http://www.executiveboard.com/blogs/files/2012/11/Online-Banking.jpg

Filed Under: Banking, Featured

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Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.


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