Monday, August 1, 2011

Online Banking Tips

The ability to conduct your banking activities online is a huge benefit. It is not easy to have to visit your branch every time you need to transfer money, deposit a check or find your balance. Today nearly all bank transactions can be done through a secure online banking platform. This can save you money and give you better control of your finances. But choosing the right online bank can take a little diligence.
Secure banking
When you sign up for online banking your bank will provide you with instructions on setting up a password, security questions and possibly a PIN designed to help keep your banking data safe. The greatest risk for fraud is not from the bank's server being hacked, but it is on your end if you do not protect your login data and passwords. To bank safely online, use firewalls, anti-virus software, random passwords and frequently clear your internet browser history. When visiting your bank's website, look for the reassuring digital certificate padlock in the bottom right-hand corner of your browser that helps verify the website is legitimate. A little diligence goes a long way with online banking security.
If you are comparing online banking accounts it is important to find a bank that offers a full array of features. Free checking, direct deposit, online bill payment, online statements and ATM fee rebates are some of the basic requirements that every online banking customer should expect out of their bank. While many brick-and-mortar banks claim to offer online banking, most still cannot provide all of the features listed above in their online banking platform. Even worse, some charge fees for what should be free online banking services. Don't get fooled by an imitator, find an online bank with a full complement of free online banking features.
Details, details, details
Banks can make it a challenge to earn the best rate. Many of their best rate offers have qualifiers and requirements that are not clear from their promotional websites pages or ads. Make sure you fully understand the terms of any bank deal before opening a checking account, CD, money market or savings account online. You can also call and have a customer service representative explain it to you fully if you don't understand or lack the patience to read the small print. Many times the devil is in the details.
Paying bills online
If you want to save money, consider paying your bills online. First, it is a great way to avoid being charged late fees. It is also is a form of eco-friendly banking. Think of all the extra energy that is expended when you mail physical checks across the country, not to mention the extra paper generated. Finally, paying bills online can help you maintain better control of your money. It is easier to maximize investment income and lower debt payments, when you know exactly when your bills will be paid. Don't delay any longer, start paying bills online today. It's easier than you think.
Watch your fees
When interest rates are very low, bank fees can eat into and even destroy your income from interest paying CDs, money market accounts or savings accounts. As is commonly known, bank profits have slumped in the last couple of years. Can you take a wild guess an area where banks are looking to increase their revenue? That's right, bank fees. While online banks have a significantly better fee structure for consumers than branch banks, you should still check all the fees that your bank plans to charge for banking activities. Make sure basic services like viewing electronic statements, retrieving check copies and ATM withdrawals are free.
Know your FDIC insurance limits
If you deposit funds at a bank in CDs, money market accounts, savings accounts or checking accounts, the FDIC insures your deposit up to $250,000. This means a husband and wife could hold $500,000 of insured money in a single bank. If they opened a deposit account for their two kids, the same family could have a million dollars at one bank - all FDIC-insured. FDIC-insured online banks are treated the same as brick-and-mortar banks when it comes to deposit insurance. The only tricky part is that many online banks have an online identity that is different from their official bank name as listed on their FDIC charter. For instance, Redneck Bank, is an online bank with a very humorous tongue-in-cheek web site. This is their online identity. Depositors at Redneck Bank are actually depositing funds at an FDIC-insured bank titled Bank of the Wichitas. The same principle applies with SmartyPig and their online social savings site at Depositors are actually insured at BBVA Compass Bank. If you open an account with an online bank, pay close attention to the exact bank that will be holding the deposits to ensure you do not exceed FDIC insurance limits. You can check the FDIC's website at for more detailed information on FDIC insurance and determine deposit coverage on online banks.
Don't go phishing
Have you ever received an e-mail from a bank with which you do not even have an account? If so, you have received a phishing e-mail. Unfortunately, countless people are fooled by these official-looking e-mails every year and give up their online account information to criminal enterprises. Remember to never click on an embedded link in an e-mail that you receive from a bank. It could be a cleverly disguised phishing operation. Instead, take the extra few seconds to type in the bank's website URL or have the site bookmarked on your computer when you need to log on to your online banking.
Finding the best bank deals
Part of the online banking experience is searching for the best bank deals and rates. Sites like MoneyRates make it easy to find banks offering great perks for opening a new bank account with them. You can find cash bonuses, free iPads, frequent flier miles, great merchandise, gift cards and more. Check for the latest bank deals before opening a new bank account or if you are tired of your current bank.
Personal financial management
An important component of online banking is incorporating your banking data into personal financial management software or financial management websites. This allows you to easily see your household budget, investments and expenses without trying to organize paper files and statements. Online bank statements can be downloaded into most personal accounting software packages, as well as financial sites like that aggregate your financial data. If you want to organize your personal financial information, signing up for online banking is a great first step.
Remote deposit
The ability to deposit checks with your computer and a scanner is a feature that can be very useful to the self-employed and small businesses that process a large volume of checks. Banks will typically charge initial set-up fees and monthly fees, but reducing the number of trips you make to the bank and cutting down your check float can save you money in the long run. Check with your bank to see if they offer this online banking service and if it might be economical based on your volume of check processing.
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