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All you need to know about online banking

Online banking is also called the Internet banking, e-banking or virtual banking. This is an electronic payment system through which financial transactions are conducted through the institution’s website. The website is a part of the bank’s system and is operated by the bank but is different from the regular, traditional method the bank operates.

You need to have the Internet access and register with the bank. You have to set a password and other identification for verification. The banks regularly give customers a unique id whether they access it online or not. Access to accounts may be limited by the bank and may include check, savings, loan, credit card and similar accounts.

How to set up online banking

  • You must visit the website, enter your code, and then access the host. It gives your bank balance account, recent transactions, electronic bill payment, money transfers etc. With online banking, you may download the bank statements, change the address, order a checkbook, report credit card loss, stop payment on checks, and seek advice on your needs.
  • Many banks have turned completely Internet savvy. These virtual banks have lower costs and they are insured by the Federal Deposit Insurance Corporation (FDIC) and give the customers same protection as the older banks.

Online banking reduces transaction cost, there is an easy integration of services and interactive marketing, and it also boosts the profits. They are able to charm the customers with more services in a single package.

It was in the 1990s that many mergers took place resulting in a few banks becoming completely virtual. Bank of America was the first bank to top the list with 3 million online banking customers; Citigroup claimed 2.2 million online customers globally, and J.P. Morgan Chase estimated over 750,000 customers, while Wells Fargo had 2.5 million customers, including small businesses. Online customers proved themselves to be more loyal and profitable than regular banking customers. There are many banks that are branchless with only virtual branches.

Features and advantages of online banking

  • Check account transactions and balance
  • Can view seven years of savings statements
  • View Form 1099-INT when you sign for e-statements
  • Send money to another account of a person or business financial institution
  • Check copies of posted check images
  • Pay bills on time, free of cost and with security
  • Move money from deposit accounts

Online banks offer a high rate of interest and have friendlier fee structures than real banks. They save a lot of money by not operating physical branches. These include banks, backed by the Federal Deposit Insurance Corp. or the National Credit Union Administration. They are listed below:

Essential checking
Essential checking is required so that you don’t have to pay an overdraft fee, a transaction is declined if you don’t have money in your account. These accounts offer unlimited domestic ATM transactions and don’t charge a monthly fee. Although Essential Checking doesn’t bear interest.

Aspiration’s summit account
Aspiration’s summit account works like a standard bank account. The deposits are secured by the FDIC with no monthly fee or minimum balance. Their interest rate separates it from the others. A balance of $2500 earns an annual percentage of 1%while smaller accounts earn 0.25%.

Discover’s Cash-back Checking
You will need a Discover product, a credit card or savings account, to qualify for this account. This account lets you earn $120 per year in cash. The checking account lets you earn up to $120 per year in cash back on debit card purchases, online bill payments and cleared checks. You’ll also have access to 60,000 free ATMs. You won’t be able to deposit cash, except at Discover’s branch.

Free USAA Classic
USAA classic has 10 free withdrawals monthly from 60,000 USAA-preferred ATMs. This is available for former and present military and their family members. It has few branches, and much of the work is done on the computer or phone.

Alliant Credit Union
It is easy to become an account holder of this bank and if you cannot, then just donate $10 to its Alliant-affiliated nonprofit. With this you will have access to 80,000 surcharge-free ATMs and may qualify for a 0.65% APY, don’t take paper statements and have one electronic deposit made to your account each month. It does not participate in shared branches and does not have many physical locations. So, you have to take care of the banking business online. Alliant’s digital tools are up to date and easy to use.

Fidelity Cash Management Account
This is a brokerage account and has online checking options. There is no monthly fee, and it has unlimited refunds at ATMs, online bill payment, and mobile check deposit. The customer’s accounts are insured up to $1.25 million by the FDIC.

Capital One
They have a better overdraft facility and gives you options to choose from like apply for an overdraft line of credit which is short-term borrowing option with 12% interest rate and no transfer fees. You can use a savings account to cover the overdrafts, free of cost. It also offers online and mobile tools and free access to 40,000 plus ATMs.

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