Although online banking went through a few rough patches when initially developed, today it has become a mainstay financial solution for millions of people all over the world.  Through necessary adjustments, as well as the development of new and more innovative, online banking has now become one of the most widely used services offered on the internet.  We wanted to provide 10 reasons that people use this type of banking to show you the incredible changes now in place.

1.    Convenience – Having the ability to log onto the bank’s website via computer or mobile device from anywhere with internet access makes this an extremely convenient banking and financial solution.

2.    Flexibility – The flexibility of being able to manage funds online 24×7, 365 days a year based on the user’s schedule is yet another top benefit.

3.    Privacy – Online banking can be done from the privacy of home, allowing the accountholder to conduct business without anyone else being privy.

4.    Cost Savings – Using online banking also saves money in that the person does not need to purchase stamps for mailing bills or gas to get to the brick and mortar bank.

5.    Multifunctional – Because most banks offer a variety of services with online banking such as checking balances, transferring money, and even paying bills, people can handle a number of different tasks from one location.

6.    Assistance from Family or Friends – In case of emergency whereby the account holder would not be able to get to the bank, logon information could be shared with a trusted family member or friend who in turn could complete a transaction on behalf of the account holder.

7.    Control – Many people complain that with traditional banking, they do not feel they have as much control of their account wanted but with online banking, account holders have far more control over the way in which their money is managed.

8.    Increased Speed – Because banking and financial tasks can be done simply by logging into the bank’s website, the speed in which it takes to handle finances is much quicker.

9.    Automatic Bill Pay – Many banks now offer automatic bill pay options with the online banking solution  With this, the account holder never again has to miss a payment, which means that person’s creditors would be happier and the account holder credit score would improve.

10.    Support – The way online banking is setup is much the same from one bank to another.  For customer support, banks offer various options to include phone calls and email.  However, with online banking it is also common to see a long list of answers to commonly asked questions, as well as a chat feature so when help is needed, a representative could be reached via chat in real time.

Banks need to understand specifics about what builds and maintains a loyal customer so appropriate changes can be made.  Otherwise, bank officials are shooting in the dark, and more times than not, missing the mark.  However, when officials listen to what bank customers really want with online banking services, a new world of opportunity opens and the result is a larger number of customers but customers that are 100% loyal to the bank.

Interestingly, if you were to put 100 bankers and 100 bank customers in the same room and asked all of them for their perception of online banking, the answers would not only be dramatically different between the bank and customers, but also unique to each person.  Therefore, it is imperative that everyone get on the same page, which can only happen by everyone having a voice but also, everyone listening and agreeing to work together on a solution.

Although online banking is not a new offering, compared to other technologies, it is still in infancy.  Because of this, it is common for studies to focus more on the service itself and not the perception of the service.  Instead, studies need to be conducted that concentrate on what drive consumers to or away from online banking to include the way online banking has been accepted and methods for improving usage.

One recent study involved 599 online bank customers and the results showed that usage of this service had very little to do with gender, income, or education level.  Even the cost to use online banking had little effect on the consumer’s opinion or conception of this form of banking.  One option for changing things is for financial institutions to change the perception.  A prime example has to do with security.  Most bank customers have the perception that banking via the internet is unsafe.  By educating the public about the types of security measures in place and proving their worth, perception would change.

Another example would be ease of use.  Some people have the perception that going to a brick and mortar bank is actually easier and more convenient than using an online service.  However, offering the public with interactive marketing campaigns so they can experience online banking first-hand through demonstration would sway current thinking.  The bottom line is that the perception of many people will never change but by addressing each concern individually and showing consumers the truth, would definitely help some people.

Online banking is an exception solution that provides tremendous benefit.  However, bank officials cannot simply tell the public what they have to offer and how great it will improve their life is not the solution.  Instead, providing information that is absorbed differently would help people see that online banking could be a very important tool for managing money.

For starters, internet banking is extremely convenient.  Literally from the comfort of home while sitting in your pajamas and sipping coffee, you could log onto the bank’s website to handle all your banking needs.  Another advantage of internet banking is speed.  As long as you have high-speed internet, you would be connected in seconds and have money transferred, balances checked, or loans applied for in no time.  Compared to getting the same things done with a traditional bank, the amount of time you would save is tremendous.

Internet banking is also very cost-efficient.  Chances are you already have a computer and internet connection so there would be no added expense there.  Then, to log onto the bank’s website would cost nothing.  The only fees you may pay would be for submitting a loan application or transferring money.  Of course, if you were to request a copy of your checks or statement, or order cashier, traveler, or bank account checks a fee would be charged.

You would also enjoy flexibility of being able to deal with bank issues whenever you want and not when the bank says you can.  Unlike conventional banks, those with online services are open 24 hours a day, 7 days a week, and 365 days a year.  Therefore, you could log on in the middle of the night on Christmas Eve if wanted and still be able to complete most transactions.  Now, the only exceptions would be moving money or making an ACH deposit in that some delay would be expected.  However, overall internet banking provides far more flexibility based on your schedule.  Along with this, you could handle bank issues from home, work, or if vacationing on a foreign island, as long as you have a computer and internet connection.

Along with advantages of internet banking, some disadvantages exist.  For one thing, if you wanted to stay with your own bank, the account would need an Internet Service Provider, also referred to as an ISP.  Additionally, if you were interested in changing banks whereby money needed to be transferred from existing accounts to the new online accounts, the process can be somewhat challenging.  You would also find that if you want to use the online bank account to pay bills, the setup process is time-consuming.

Another potential issue associated with internet banking has to do with security.  Although the top online banks use only the latest and most robust security software, unfortunately some do not.  Therefore, anyone who is considering internet banking needs to learn the security system in place so personal and financial information would be 100% protected.  As long as the right system is in place, there is very little risk. Breeze by Standard Chartered Bank has added additional safeguards with their online banking products that give their customers a sense of safety and security

To determine whether an online bank is secure, there are actually three specific ways.  For one thing, you would need to look at the bank’s homepage.  In the address bar, the beginning part of the website may start with an http:// or an https://.  The “s” stands for “security” so if it shows up as https://, you know the site is protected.  However, if the site starts with http://, if it changes to https:// once you log into your account, then the site is protected but if not, you need to consider a different bank in that your information and money would be at risk.

Secondly, look on the bank’s homepage and in the bottom, left-hand corner you should see an icon that looks like a padlock.  This too would be an indicator that the site is safe.  Finally, look for certain words that would indicate the company providing the bank with online protection.  For instance, VeriSign is the one that most banks use.  In this case, you may see a gold seal or the words “VeriSign Secure Site”.

Overall, internet banking or online banking offers far more advantages than disadvantages but because there are a few negative aspects, only you could decide which bank would be best for your specific needs.

First of all, you should understand what yield means.  Yield is your annual rate of return on an investment or savings account.  It is written as a percentage.  In this article I’m talking about high yield online savings accounts which have specific features.  Most are based on amounts of $10,000 or higher, most have a very short-term guarantee period higher interest paid (3-6 months), and many have fees associated with them.

Don’t just let the interest rate offered be the deciding factor in your decision to deposit with an online company.  Make sure you check them out.  Learn how long they have been in business.  Check the FDIC website to make sure they are a legitimate bank and you are insured for the funds you deposit.  If they require you to have a checking account package to get the higher rate on your savings, what is the minimum balance requirement.  If they charge fees for the account, make sure the rate you are getting offsets that fee and you are really coming out ahead.

As recently as 12 months ago you could get a high yield online savings account for a rate up to 5.00% from many companies.  We have all seen the crash that happened since then.  There is a great site for you to check bank rates .  I saw rates there for as high 1.63% with no minimum balance requirement.  Your bank most likely can’t come close to that in this environment for a deposit account.

With savings account interest rates so low, it is more important than ever to find a good savings rate.  Higher savings rates lead to higher account balances which can lead to fee waivers on related accounts and many other benefits.  It might take a little research, but it is still possible for you to find a good rate on a high yield online savings account.  Rates won’t stay this low forever, but shopping for the best you can get right now will make your future easier in the long run.

Your daily transactions are harder to keep track of with the switch to debit cards, ATM machines and limited use of checks.  Most people don’t even have personal checks anymore.  Unless you carry a written register with you at all times, it can be very difficult to keep track of where you used your debit card for each purchase.  This is a great reason to bank online.  You can check your account balance, transactions (almost up-to-the-minute,) fees, print your statement, get copies of checks that have cleared and transfer money from between accounts with a few easy steps.  It is easy to check your balance often so you don’t have a deduction that surprises you and messes up the balance you think you have in your account.

Signing up for online banking can seem complicated but most banks are more than happy to spend the time with you to set it up in the branch.  Many of the things you can do on the bank website are services they might charge you for in person.

The following transactions can all be performed online:  opening extra accounts, electronic bill payment, loan applications, bank statements, investments, wire transfers, account balancing, ordering checks, past statement printing and usually 7 years of transaction history all at your fingertips.  If you have credit cards or a mortgage with your bank, you can pay it with a transfer from your checking account instead of standing in line at the branch, waiting for a teller.  So many other services are also available.

Another fantastic benefit?  You can download your budget and banking information into personal accounting software such as Quicken or Quick Books.  This provides you with great financial management support and allows you to follow all of your finances in one location no matter how many banks you may use for your personal needs.

Always make sure you have a firewall on your account for online banking and your security , plus you scan often for viruses and Trojan software that can put you at risk.  You should also change your password often and if you use a public computer make sure it doesn’t record your sign on information.  In the end, if you educate yourself about how to bank online and take just a few steps to protect yourself and learn the process, you can save yourself time and money by banking online.

More and more of us use debit cards for purchases now instead of checks. The funds come out of your account quicker than they used to because funds now move electronically instead of a paper check being presented for payment at your bank. Daily transactions are harder to keep track of now. Unless you carry a paper register with your debit card to write down each purchase during the day, they can get ahead of you but they are listed within minutes online, so checking daily or every few days gives you the opportunity to balance your account without waiting for the statement to come.

Many of the services you get in the bank are available thru banking online which saves you time (no standing in line for a teller) and money. You can check your account balance and see all of your transactions (almost up-to-the-minute,) fees, print your statement, get copies of checks that have cleared and transfer money between accounts with a few easy steps. It is easy to check your balance often so you don’t have a deduction that surprises you and messes up the balance you think you have in your account. Most banks charge a fee for these services if you do them at the branch and they can all be performed online. Obviously you need to find the best online banks to deal with.

More features while banking online? Opening accounts, electronic bill payment, loan applications, bank statements copies (7 years back,) wire transfers, account balancing, ordering checks and many other services. A great financial planning benefit is the ability to download your budget and banking information into personal accounting software such as Quicken or Quick Books. This provides you with great financial management support and allows you to follow all of your finances in one location no matter how many banks you may use for your personal needs.

If you have difficulty at the bank website getting signed up, go to the branch. Most companies are happy to help you with the initial sign up and will walk you thru the website so you have a better idea of how it works. In the end, if you educate yourself about how to do it and take just a few important steps to protect yourself, you can save yourself valuable time and money by banking online.

Online banks generally make money with various fees for transactions. So you want to make sure you understand the fee schedule of the bank that you choose. These days the banks online are extremely competitive when it comes to pursuing new business and new accounts. Incentives to open new online savings accounts vary from personal gifts to higher interest rates.

Keep in mind that while your account balances will be accessible 24 hours of the day transfers between accounts and withdrawals may require a few days to occur. For many people these delays can be a nuisance however, for many people it offers a built-in discipline for reckless spending.

If you have never opened an online savings account it would probably behoove you to start off with an account to help you experience the differences in a traditional bank account.

Remember that your online savings account is exactly that, a savings account. Generally speaking with online savings account there are limits to the amount of withdrawals you can make in a given month. If you find yourself having to make withdrawals beyond account limits you probably need an online checking account instead of an online savings account.

New online savings accounts generally have holds placed on the accounts. This can be frustrating, but it is part of the process of establishing your account online.

The Best Sources For Online Savings Account Rates

Presently interest rates are very low for savings accounts. However, inflation is low as well. Seeking out a high yield online savings account will maintain your buying power versus inflation. Everyone needs an emergency savings cushion and the present market conditions allow you to make significant gains versus inflation. Savings is never easy for anyone but conditioning yourself to a few basic fundamentals of saving money can help. Pay yourself first. Set up an automatic withdrawal if possible from your paychecks and deposit them directly into your online savings account. Here are a few onlien banks that can help with your financial goals.

ING DIRECT – High Yield Savings with the Orange Savings Account. offers up to 1.65% APY, on their Electric Orange interest checking account on high balances. They feature a web interface, free bill pay, free ATMs at 35,000+ locations and an online application and is truly a leader in the industry.

HSBC Direct offers 1.45% APY, no fees, web interface. $1 minimum to open. Named “best online savings account” by Kiplinger’s Personal Finance in 2006.

WTDirect Savings Account offers a variable rate currently at 1.66% APY on all balances for first 60 days. Beyond that, accounts >$10,000 continue at the variable 1.66% and lower balances are adjusted to a lower variable rate. No Fees. FDIC Insured. No minimum deposit to open the account and no checking account required in order to get the high rate.