Pros and Cons of Online Banking

When people use the Internet they expect convenience, speed and efficiency. The same expectations apply to online banking. Consumers view online banking as a quick way to pay bills and check their finances. However there are a few drawbacks to online banking if it's used incorrectly. The following are Bankrate.com's list of online banking pros and cons and how you can avoid any unnecessary pitfalls:

Pros:

  • Convenience: Unlike your corner bank, online banking sites never close; they're available 24 hours a day, seven days a week, and they're only a mouse click away. 
  • Ubiquity: If a money problem arises while you're out of state or out of the country, you can log on instantly to your online bank and take care of business -- 24/7. 
  • Transaction speed: Online banking sites generally execute and confirm transactions at or quicker than ATM processing speeds. 
  • Efficiency: You can access and manage all of your accounts, including Individual Retirement Accounts, CDs, even securities, from one secure site. 
  • Effectiveness: Many online banking sites offer sophisticated tools, including account aggregation, stock quotes, rate alerts and portfolio managing programs to help you manage all of your assets more effectively. Most are also compatible with money managing programs.

Cons:

  • It may take time to get started: If you're new to online banking, it might take time to register for your bank's online program. Or, it may be easier to physically fill out a form at your local branch. If you and your spouse wish to view and manage your assets together online, one of you may have to sign a durable power of attorney before the bank will display all of your holdings together. 
  • Learning curve: Some banking sites can be difficult to navigate. Plan to invest some time and/or read the tutorials in order to become comfortable in your own virtual lobby. 
  • Banking site changes: Even the largest banks periodically upgrade their online programs, adding new features in unfamiliar places. In some cases, you may have to re-enter account information. 
  • Trust: Trusting an online banking system is an issue for two main reasons: identity theft and operator error. If you use a non-secure wireless Internet connection, it might not be a good idea to use online banking. It's too easy for a savvy ID thief to view your personal information. In regards to operator error, some users worry that they might have pushed the transfer button too much, or not enough. The best solution to this problem is to always print the transaction receipt and keep it with your bank records until it shows up on your personal site and/or your bank statement.

Online banking is designed to be convenient for you. If you run into any problems with while banking online, contact your local branch to sort out any errors.

For more information visit Military.com's Banking and Savings Center.

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