Pros and Cons of Online Banking
With the advent of the Internet, online banking has gained immense popularity. The ease and the convenience of banking from anywhere in the world, without having to physically visit the local bank, has made online banking an indispensable facility for many people.
Advantages and Disadvantages of Online Banking
The pros and cons of online banking can be summarized as follows:
Pros of Online Banking: Online or Internet banking, offers the convenience of banking from anywhere, at any time of the day or night. It is a free facility provided by the banks to their customers. Expediting the payment of bills, helping people keep track of the balance in their account and transferring money between accounts are some of the advantages of Internet banking.
Paying Bills Online: Online banking provides people the facility of paying bills online from their checking account, money market account or credit card account or from their home equity line of credit. In order to avail this facility, people would have to set up payees or pay to accounts for which they would need a copy of their bills. Recurring payments can be made without delay, by making use of the facility of being able to set up pay to accounts, on completing a simple formality. One can schedule bill payments up to one year in advance. It helps people keep their bill payment history in an electronic format, thus eliminating the need for paperwork. Some companies also dispatch bills directly to the customer's online banking service. However, not all companies offer e-bills. The customer can thus receive, view and pay e-bills or electronic versions of their paper bills.
Electronic Funds Transfer: Online banking allows the facility of electronic transfer of funds between a number of accounts maintained with the same bank. Generally, people can transfer money from their checking or their savings account to the following: credit cards, line of credit and investment account. People can also transfer money from their personal account to the personal account of others, assuming that the accounts are maintained with the same bank. Customers can also opt to transfer funds from their personal account, maintained with a bank, to the accounts maintained in other financial institutions. Withdrawals and deposits are thus facilitated by electronic fund transfers.
Other Facilities: One can access one's account from anywhere in the world and view the current balance in the linked accounts. The system of linked accounts allows the bank to transfer funds from the customers savings account to cover the overdrawn checking and credit card account. Viewing the balances in linked accounts helps a person keep a check on spending habits. Stopping payments on checks, re-ordering checks, requesting copies of paid checks, savings and checking account statements are some of the other facilities.
Cons of Online Banking: Although the advantages clearly outnumber the disadvantages of Internet banking, some people may prefer banking the old-fashioned way due to the following reasons:
Safety Concerns: Phishing, the presence of malicious software, keylogger issues and security concerns due to weak wireless security networks deter people from opting for Internet banking.
Meant for Tech Savvy People: People belonging to the older generation may not be tech savvy and may find it difficult to adapt to online banking.
Online banking is a wonderful facility that can save us time and make our life simpler. However, one must take adequate measures to protect oneself from getting cyber scammed.
