Online Banking: Is It For You


Online banking is for you if it will save you time and/or money.

You're the ideal candidate for online banking if you a) are online already, b) have more than just a few bills to pay, and c) already use a personal finance program like Quicken or Microsoft Money. If one or two of these apply to you, then you're still a pretty good candidate.

But what, exactly, do we mean by online banking? There are three aspects to what is broadly called 'online banking,' otherwise known as PC banking, Internet banking, home banking, or electronic banking. First is the fact that you can shop for interest rates online (not just interest rates for your interest-bearing checking account, of course, but also for such things as home loans or car loans).

Then, beyond finding your best interest rate, there are concrete services offered online that can benefit you in tracking and managing your bank account: account viewing and online bill paying. The former indicates that you can access your account online to see your transaction history and account balance. The latter offers, in addition to that, the ability to pay your bills online and have your register updated and the data automatically imported into programs such as Quicken or MS Money.

There is also the distinction between banks that are wholly on the Internet and for which no special software is needed (such as Net.B@nk and Telebank) and the traditional banks that have added the option to bank from home via special software.

There are key advantages to banking online. First, you can do it from anywhere. From the office, from home, from your cousin Lester's place in New Jersey (if you can ever get his kids off the darned computer). You can also do it any time of day or night -- and at last fulfill those bizarre cravings you've had at 3:00 in the morning to check your account balance. The disadvantages have mostly to do with the effort that may be required to get set up.

Are you online already?

Umm... well... you're reading this, right? So it's a pretty fair guess that you are. This means you don't have to jump through any hoops in terms of getting a computer, figuring out what a modem is and whether or not you have one, getting an ISP or using AOL, etc. You already know all that. If your current bank has a website and the ability for you to view your account, you may be just an instructional phone call or a mouse click away from viewing your account online already.

How many bills do you pay each month?

If it's only two or three, then it may not be worth your while to get set up for online banking. If however, it's more like 20, then you're a prime candidate. Once we're talking paying rent and/or mortgage, the utility company, the garbage collector, your VISA bill, the local phone company, the long distance phone company (and possibly a separate cell phone), the cable company, one or two student loans, a car loan, the water bill, and the newspaper delivery -- well, think hard about doing your banking online. There is great joy in not having to write your account number by hand on so many checks, put stamps on so many envelopes, or write your return address over and over.

Banks offer these services for varying rates, but a reasonable rule of thumb at present is that you'll pay around $5 a month. If you send out 20 bills a month, you're saving over $6.00 in postage right there -- so you're already ahead. If, in addition, you're saving yourself time and getting that extra pleasure from not wasting energy in the humdrum of irritating tasks like licking envelopes, it's a no-brainer: you should be banking online.

Do you use Quicken or MS Money?

If you already use one of these programs, you're way ahead of the game. You already know most of what you need to know. In addition, your bank will (most likely) be able to update your register on your hard drive -- automatically -- each time you use it. This is, as the saying goes, way cool. You simplify and automate your bookkeeping and make tax time less painful. You pay your bills with a minimum of effort. You save money.

It's no-brainer #2, fer cryin' out loud.

Is your time important to you?

Well, all right, you caught us asking a leading question. Everyone's time is important. But we state it here because it's something to think about: an investment of time up front may pay handsome dividends down the road. (It's just like investing in stocks, right? You know, "time is money" and all that.) Even if you're not online and you don't use Quicken or MS Money, you may decide that taking the time now to get set up for the future will be worth it.

Now, suppose you decide to take the plunge and to bank online. Suppose further that your current bank has online services available to you. What's ahead? Let's see.

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