Money Essentials

Online banking tips

Online banking sites can reduce the time spent balancing a checkbook, transferring money and paying bills


More and more U.S. households do their banking transactions online.

Online banking comes in many forms. It can be nothing more than a recurring bill paid to a company by your traditional bank, to a high-yield account at an online bank that has no physical presence.

The best bank websites go beyond bill payment and balance updates to let you check your credit card accounts, look at your banking and brokerage accounts, make trades, and get free stock quotes.

Banks with online services have gone to great length to increase the security of transactions in recent years, adding new layers of encryption.

Still, 'phishing' scams thrive online. Phishing is when an email or site is designed to appear legitimate for the purpose of luring unsuspecting users into giving over their account details and passwords. That information is then used to steal the victim's money or identity.

If you think you'll do all your banking online and want higher interest rates, consider an Internet bank. Internet banks can provide higher yields on accounts and lower rates on loans than traditional banks due to the reduced cost of their operations. But in exchange you forfeit some of the conveniences of a traditional bank.

Often transactions occur more quickly online than in person, but there are some cases when you just need a human teller.

Internet banks don't usually have their own ATMs, so you will pay surcharges every time you use another institution, although you may be offered some reimbursement for these ATM fees by your bank. Also, be aware of the occasional Internet bank whose accounts are not insured by the FDIC.

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Updated 7/10/2012 with content changes - aross