Friday, March 07, 2008

Convenience of Online Banking

The term "bankers hours" is seldom heard these days, and with good reason. Gone are the days when banks were open from 9 - 3 Monday through Thursday and 9 - 6 on Fridays. Thanks to online banking, banking services are available 24/7. Today practically every banking transaction except making a cash deposit or accessing your safe deposit box can be done online. But with ATM machines even cash (other than coins) and check deposits can be made 24/7 via an ATM machine.

The name of the game here is service and security. We want to be able to access bank services quickly and easily and make sure that our money is safe. Ironically, despite all the Internet scams we read about where people lose money, studies have shown that people who use online banking regularly have fewer losses than those who do their banking the traditional way. The reason is that people who use online banking generally access their accounts online many times a month and can quickly spot when something is wrong. While those who engage in traditional banking have to wait until they receive their statement at the end of the month to see if anything is amiss.

Like services from traditional brick and mortar banks, the services from online banking operations vary in price and quality. However, with online banking you literally have every bank in the nation competing for your business, so you can shop around to find the bank that offers the types of services you want and the quality of service you want either for free or a low price. For instance, my main bank is a totally online and mail operation. They offer excellent service and most of their services are free (free interest bearing checking accounts, free bill pay, free savings accounts, etc.). I can not only move money between accounts at that bank but can move it between other banks that I do business with. To handle things like checks I receive in the mail and my wife's pay check, which is still hand written by her employer, I maintain an account with a neighborhood credit union. Checks are deposited into the credit union ATM and the funds are then moved, via the Internet, to my main bank. We also have the children's accounts at the credit union and have received some good deals on loans from them as well.

Being online, I can access my accounts from anywhere. I also have my paycheck automatically deposited to my checking account. Even when I am traveling out of state or out of the country on pay day, I still have immediate access to my pay check from wherever I am and, using the bank's bill pay service, I can sit down in my hotel room and pay my bills on the spot rather than waiting until I get home and risk a late fee.

However, I have discovered that "online" means different things to different banks. A couple of months ago my wife and I stopped by a couple of car dealerships on a Saturday morning window shopping for a car for our daughter. We found a nice one but did not want to do the financing through the dealer. I drove home, went online with my main bank, filled out an application and received an approval all within about 30 minutes. I printed the approval which stated that I had the loan contingent upon my actually purchasing the car and confirming to the dealership that a check would be FedExed to them on Monday. I picked up my daughter on her lunch break and she had her car before she returned to work. Then a couple of weeks ago I went online with my credit union on a Sunday evening, filled out an application for a Visa card for my wife and I, and submitted it. On Monday evening there was a message on my phone to call the credit union, which I did on Tuesday and was informed that the card had been approved but that my wife and I would have to come in and sign the application. When we arrived we discovered that "signing" the application meant giving a loan officer all the information I had previously submitted on line. He dutifully typed it into the computer, printed it out and we signed it. An hour and a half later we left with the assurance that the cards would be mailed to us shortly. Obviously, some banks have put more thought into their systems than others.

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