Online Banking ...What Are You Waiting For?

The other day I was talking to a friend about how much I like online electronic banking and how it saves me so much time. My friend commented that she would not like online banking since she still wants to have control over her money. I pressed her a bit to find that she was equating electronic banking with automatic bill payment.

Contrary to what my friend thinks, not only does online banking give you more control over your money, it allows you to take full advantage of billing cycles without worry that Uncle Sam’s mail truck will get a flat tire causing penalties from the credit card company.

You don’t need to use automatic bill payment at all. In fact, the beauty of the service is that you can tell the bank when to transfer the funds down to the day and it can be different each month. So if your BP Oil bill is due on August 26th, you can tell the bank to make the payment on August 25th. Since it is an electronic payment there is no time delay and BP has your money on the 25th. The next month if the bill is due on the 27th, you can pay it on the 26th. In the olden days you needed to make sure that you mailed the check several days before the due date since there was no telling how long snail mail would take.

Most banks offer electronic statements as well as access to an archive of many months or years of your records. This is invaluable when doing your taxes. Having these statements stored off site in some bank’s computer beats the shoe box in the front hall closet.

Almost every bank now offers some level of electronic banking. They do this because it saves them money, too. After all, when you go into a bank the teller is essentially entering information into the same system that you use on line. If they can get you to do the work, they save money. Not mailing out paper statements is also a cost savings.

Security can be an issue, but if you use common sense most pitfalls can be avoided. For sure, keep your passwords safe and don’t use your kid’s name or your phone number as a password. Also, you should be cautious doing any online banking using a public wifi hotspot or a computer that is not yours. There are some nefarious people who can gather your passwords by electronically eavesdropping at the library or Starbucks. Do your banking at home or at the office on a computer that your know is secure.

If you have not already tried it, go for it. You can still write your paper checks when you want. Perhaps you can start by just setting up an account and using it for some of your bills. Once you are comfortable, you will never go back.