Benefits of choosing online banking
Online banking has come a very long way from a banking company simply offering an app to check your bank balance on your phone. Now, online banking has almost surpassed the need for brick-and-mortar locations, offering an array of features and functions that make it a preferred choice of customers.
Online Banking vs. Online Banks
Online banking has become such a ubiquitous term that it is often confused with terms like online banks, internet banks, or direct banks. You have direct access to your account. There is no physical building you have to visit to carry out transactions or get information about your finances.
Banks that have branches in cities across a region or the country are coming to be known as traditional banks. Most traditional banks will offer online banking as part of their services, but an online bank exists only on the internet; there are no physical locations.
Regardless, traditional banks and direct banks offer many of the same services, especially since most customers do their banking through their provider’s website or mobile portals.
The Mobile App
With online banking, you can take your banking with you wherever you go. Today, nearly all banks — traditional and direct — have their own mobile app, which will give you access to most of the functions you can get through the desktop portal and by going into a bank branch. Even if you have problems or questions, the app should let you chat with a customer service agent. This is something we offer here at Current with our 24/7 live customer support, available 365 days a year, even holidays.
Another advantage of using a mobile app is that you can get push notifications whenever there is any activity on your account. This means that you can stay on top of every purchase you make. It also makes you aware of any automated payments you may have forgotten about and if there is any fraudulent activity on your account.
Paying Your Bills
One of the advantages of choosing online banking is that your bank’s website or mobile portal will allow you to pay your bills online, removing the inconvenience and potential risks of sending a check in the mail. Most online banking portals will have a function where you can set up payees. You only have to fill out the information once and then you just choose the payee every time you want to send them money.
You should even be able to choose the date for that transaction to happen, so the banking system then makes the payment automatically at that time. This is ideal for car payments or insurance policies, which have a fixed amount that is paid every month.
In other cases, an online banking system will let you authorize a payee, like a mortgage provider or a utility company, to automatically pull only the amount of money that you owe directly from your bank account. Most companies will have secure websites where you can enter in your bank’s routing number and your checking account number. This creates a direct link between your checking account and the payee’s system.
Every month, like clockwork, the transaction debits the exact amount you owe. This removes the hassle of writing checks, manually making the payments yourself, and the possibility of forgetting that you have money due on that particular date. At Current, we will also notify you via email a reminder whenever you have an upcoming payment scheduled.
Tracking Your Transactions
Online banking lets you look at your account history and transactions from any device, at any time. You do not have to wait for a monthly bank statement to come by mail. You don’t have to go to an ATM or a traditional bank to request a record of your account activity. This is a vital way of keeping an eye on your finances, so any suspicious activity can be quickly detected and disputed. At Current, we offer instant spending notifications via push. You’ll know right when money leaves your account.
Part of looking at your account history is seeing your pending transactions — transactions that were made on the current business day or after the end of the previous business day but have not yet been completed. Keeping an eye on your pending transactions through a mobile app like Current gives you real-time monitoring of how you’re spending your money and what this does to your bank balance.
Transferring Between Accounts
One of the biggest advantages of online banking is that you can quickly transfer money from one account to another. You don’t have to go to your bank in person or use an automated phone service. In fact, most automated phone services will suggest that you use your bank’s online system to do the transfer yourself.
While transferring money from an account at one bank to an account at a different bank might take up to three days, transferring money from one account to another at the same bank — from a checking account to a savings account or vice versa — is usually processed on the same day, perhaps even instantaneously. Different banks may have different processing times, depending on the amount of money being transferred. You can also use your online banking system to automate regular transfers from your checking account to your savings account.
If you have two or more savings goals — maybe you’re saving money to both buy a car and rent an apartment — your bank might allow you to open multiple savings accounts and transfer money from your checking account into the specific savings account that you’re using for your intended goal. While a checking account requires a minimum balance to open, most savings accounts have a much lower minimum balance requirement. Some banks might offer no minimum balance requirement, but you may have to meet other criteria to qualify for this. At Current, we don’t have any minimum balance requirements.
Another benefit of online banking apps is that you can use them to deposit checks. Here’s how you can use your online bank app to do this:
- Take a picture of the front of the check.
- Sign the back of the check.
- Take a picture of the back of the check.
- Some banks require you to write an endorsement, like “For mobile deposit only to my [name of bank] account.” Others might require you to check a box on the back of the check to indicate that you are using the mobile deposit feature. Others might require just your signature.
- Confirm, through the app, the amount being deposited
And you should be done. You don’t even have to visit your traditional bank to deposit the check. At Current, we offer mobile check deposit.
It is important that you do not do any online banking on a public Wi-Fi network since such networks are not secured by any digital protections. If you do your online banking in a library or a coffee shop, your online and banking activity could potentially be observed and interfered with by a hacker. It is safest to do all your online banking only on a Wi-Fi network that you trust, like a home or office network.
Budget Apps & Lower Fees
If you use budget apps — apps that help you keep an eye on your spending, create a budget, and plan for the future — some online banking apps can sync with them, so you don’t have to manually enter your transaction history into the app. Just give the budget app the necessary permissions to access your banking app. Your budget app will then have everything it needs to provide you with the financial assistance you want.
This will also allow you to sync your budget app with a partner, spouse, or loved one. Some budget apps are designed with household-based spending and saving in mind, so you and your loved one can easily track your spending habits and stay within your shared budget.
If you use an online bank, you might enjoy lower fees (or even no fees) because these institutions don’t have to pay for maintaining any brick-and-mortar facilities. For this reason, you might also get better interest rates with an internet bank than you would a traditional bank.
For example, deposit accounts with online banks have higher annual percentage yields, sometimes as high as 1.5%. The national average savings rate is only 0.05%, and some of the largest traditional banks offer just 0.01% annual percentage yields. This isn’t true for spending accounts.
Online banking offers you faster access to your money, and at Current, we’re proud of what we offer customers. When you work with us, you’ll enjoy up to two days faster direct deposits of paychecks and instant gas holds refunds with our Premium Account. There is no minimum balance requirement and no hidden fees. As a Premium Member, you can also receive fee-free overdraft, up to $100, when you make a qualifying direct deposit.*
It only takes 2 minutes to sign up for an account. Do it today.
5 Advantages of Online Banking. (June 2020). The Balance.
Internet Banks: Pros and Cons. (August 2019). Investopedia.
2020’s Best Mobile Banking Apps. (February 2020). SmartAsset.
How to Save Money Using Online Bill Pay. (August 2011). Quick and Dirty Tips.
Pending Balance vs. Available Balance: Which Amount Is Most Accurate? (July 2019). MyBankTracker.
5 Reasons to Have Multiple Savings Accounts. (September 2020). Bankrate.
Is It Safe To Bank On Public Wi-Fi? How Not To Get Hacked! (February 2012). Yahoo! Tech.
9 Best Budget Apps for Personal Finance. (November 2018). The Street.
Nine Key Reasons Online Banking Benefits Small Business. (August 2019). Forbes.
Online Banking Disadvantages. (February 2019). Houston Chronicle.
The Pros and Cons of Online Banking. (September 2014). Nasdaq.
I Was Skeptical of Online Banks — Until Experts Showed Me Their Money-Saving Potential. (November 2019). Money.
What Are Online Banks? Learn the Pros and Cons. (March 2020). Nerdwallet.
Banking services provided by Choice Financial Group, Member FDIC. The Current Visa Debit Card is issued by Choice Financial Group pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.
What Is a Personal Finance Coach & Should I Have One?
A personal finance coach can help you to organize your finances and figure out the best path...
How to Open Your First Bank Account Online
Opening your first bank account online is a great way to take command of your finances, avoid...