A few years ago I began using online (electronic) banking and since that time I have found less and less need to visit a brick and mortar bank and have saved lots of time and money in the process. For many readers the information I am about to provide is old hat, but if you have not begun using online banking you may wish to read on.
Almost every major bank now offers customers access to their accounts online. Not only can you check balances, you can set up automatic payments, transfer funds and monitor several different accounts. In most cases these are all free services. They should be free. After all, you are actually saving the bank money by automating your banking activity.
One of the great benefits of electronic banking is bill paying online. With the cost of First Class postage scheduled to go up again soon, the cost to mail those checks at the end of the month can add up. Also, you may have noticed that some credit card companies continue to shorten the time you have to make your payments. Using the US Post Office you almost have to mail the payment the same day you receive the statement or your payment might be late, resulting in fees and penalties. With online banking you can tell the bank what day to transfer the funds to the credit card company. No mail, no postage and no delay. If you tell the bank to transfer on the 30th of April, the funds are received that day.
You can set up automatic payments as well. If you have a mortgage payment due each month you can set up your online checking account to make a payment each month on a specific date. If you travel a lot this is a great way to make sure that the bills get paid while you are away.
Some people are a bit apprehensive about the nature of online banking. No longer do they actually touch the checks, if they have direct deposit for their pay checks they don’t actually see what they have earned at the end of the month. While this can be off-setting at first, the benefits far outweigh the negatives.
If you are not now banking online, I suggest that your start slowly. Begin by using your computer to track your accounts. See when your checks clear. Set up a notification system that tells the bank to email you when a direct deposit is received into one of your accounts. This will get you comfortable with the process. You may then want to begin paying some of your regular bills online. The electric and phone companies and your mortgage are good ones to begin with. Each month add other bills to the online list. Soon writing a paper check will seem strange.
I have online accounts at both Fifth Third Band and PNC. Both have very easy to use systems. Setting up your bill paying for the first time takes only slightly longer than it does to write a real check and place it in an envelope. Since most major banks deal with thousands of merchants and companies, they already have most of the required information needed to make the electronic payments. All you need to do is give them your account number and fill in the amount of the payment.
Once you get used to the system you will find that paying your bills, a task that used to take me more than an hour to do each month, can now be accomplished in a matter of minutes. And because you don’t need a postage stamp for each payment, the savings add up.
A great by-product of online banking is the ability to generate various records and reports. You can keep track of the amounts each payee has received and when they received them. All of this information can be transferred into your personal financial software programs like Quicken® or Mircrosoft Money Plus®. These records are also invaluable if you do your taxes using any of the leading products like TaxCut® or TurboTax®. I think that once you try online banking you will find that you will never want to go back to the old way.