Online banking is revolutionizing the banking industry. Some of the advantages of online banking are that it gives consumers more choices and flexibility with their money management. Consumers have become more comfortable with buying goods and services online. Brand experiences take place on social networks and websites, not just in brick-and-mortar stores.
As more people wanted online experiences and became comfortable with e-commerce, the banking industry adapted. Most banks have mobile applications where users can access their funds and other features. However, new banks have emerged that don’t rely on bank branches to serve customers and provide quality features.
What is Online Banking?
Before the Internet, you had to visit or call the bank to make any request or fulfill a transaction. You had to show up in person to take out funds for a purchase, pay off a credit card, or perform other financial activities. Showing up in person for basic transactions seems strange today because of online banking.
Online banking platforms allow us to make these transactions from any device. They simplify a consumer’s financial experience. Some banks provide the minimum, while others exceed expectations with their features designed to improve your financial health.
Online Banking vs. Traditional Banking
Traditional banking makes it more difficult to conduct basic transactions. You have to call or visit a local branch to get anything done. You have no way to withdraw money for purchases if you aren’t near a local branch. Although you could use your credit card, you can’t immediately pay off credit card debt. You would have to reach out to someone and write a check to the credit card company.
Online banking lets you perform these transactions with ease. You can check your bank accounts and credit card balances anytime you desire. Traditional banks don’t stay open 24/7, giving you a limited window to obtain funds, make payments, and get your questions answered.
Is Online Banking Right for You?
The internet has increased convenience and provided us with more choices. Online banking does the same and makes life less stressful. If necessary, you could pay bills from your hotel room during vacation. You don’t have to drive to a local branch or call your credit card company.
Online banking gives you easy access to your credit score and financial products, such as loans and lines of credit. Online banking apps are safe ways to view your finances and make transactions. You can do online banking anywhere in a few minutes without dialing your local branch’s phone number. All you need is an internet connection to get started.
5 Advantages Of Online Banking
Online banking provides consumers with many advantages. We’ll highlight the five advantages of online banking you’ll come across the most frequently. You may already capitalize on some of these perks, but you don’t want to miss out on any of them.
1. Convenience And Control of Your Account
Convenience and control reduce stress and uncertainty in your life. Having your account information accessible on a mobile app means fewer trips to the bank. Online banks give you more time to spend with loved ones, work on a side hustle, or pursue a hobby.
Some business owners receive checks from their customers. Under the traditional banking model, you would have to drive to the bank to get the check deposited in your checking account. However, online platforms let you take a picture of the check with your mobile phone. After taking the picture, the funds will show up in your account once reviewed and ready for use. You’ll save time and money on gas with this approach.
It’s easy to take the internet for granted since we’ve had it for decades. However, it continues to simplify many parts of our lives. Financial institutions with online setups also give you more control over your account. You can use several safety features to restrict access to funds so malicious thieves don’t blow through your savings. Apps also come with passwords and two-step authentication to help protect personal information and give you more control over your account.
2. Easier Bills Payment
Bills will never go away, but late payments make them worse. Credit card debt comes with higher interest rates than average, and missing utility payments can result in losing power. A more accessible bill payment system reduces the chance of making a late payment or falling behind.
You can pay down credit card debt and other bills through a mobile device. Consumers can visit their bank’s website, log into their account, and check their balances. Online banking makes it simple to pay bills ahead of time to create a buffer.
3. Simple Fund Transfer
Transferring funds gets complicated if you don’t use internet banking. You’ll either have to visit a local branch or call your bank. Simple fund transfers can protect you from overdraft fees. It’s common for people to eat at restaurants.
Let’s say you get a restaurant bill for $250 and want to use your debit card. After handing them your debit card, you remember your checking account only has $200. You don’t have enough time to call or visit a local bank. Let’s assume that you also have $100 sitting in your savings account. Instead of getting your payment declined and incurring a late fee, you should quickly transfer $50 of your savings into the checking account tied to your debit card. Online banking apps on your phone let you do this within minutes. After initiating the transfer, the funds automatically move from your savings to your checking account.
You may not be down to the wire with a debit card payment, but simple fund transfers come with other perks. Some money management apps make it easy to create several budgets. You can allocate funds for the following categories:
- Living expenses
- Vacation
- Taxes
- Investments
- Entertainment
You can get creative with your categories, but simple fund transfers become vital. You can take a percentage of each paycheck and distribute it across your accounts. Under the traditional banking model, you would have to visit a financial institution’s local branch or make a call each time you wanted to distribute your funds across accounts. The online banking model simplifies this process and only takes a few minutes.
4. Better Rates, Lower Fees
Don’t like getting higher interest rates on your loans or fees? Mobile banking apps don’t rely on local branches, which means less overhead. These companies pass their savings on to consumers.
Traditional financial institutions offering digital apps can’t provide these same benefits. They still have local branches to manage. Those commercial properties come with mortgage payments, utilities, and other expenses. Traditional institutions pass those costs to consumers through hidden fees and higher interest rates. Online financial technology companies don’t have to raise prices on consumers to break even.
5. Tons Of Features
Online banking apps aren’t only for checking your account balances and paying bills. Some apps provide features that can strengthen your finances. You’ll get the basic features from any app, but some online platforms go above and beyond with their financial services. Some offer perks to using your debit cards, such as points for cash back rewards from eligible purchases, fee-free ATM access, and contactless cash deposits.
Where Can You Bank Online?
Many financial institutions let you bank online. However, some of these institutions rely on their brand’s past successes to attract new account holders. Modernized online banking companies offer more advantages of banking with them, which lower your costs and strengthen your personal finances. But whichever platform you choose, assessing your individual needs is key in finding the right bank for you.
