What is online or electronic banking?

Introduction to online banking

Online banking, sometimes also called electronic banking, is one choice for savings and checking accounts, as well as paying bills. For consumers who have regular access to computers and are comfortable using them, online banking provides many benefits, and can save time and money.

Some online bank accounts are online versions of traditional bank accounts – savings or checking. Other online bank accounts are with virtual banks that do not have traditional phyical banking locations. These are banks, just like any other, with the exceptions that they don’t have local branches; individuals cannot deposit or withdraw funds in person; and, since most virtual banks don’t have ATM machines, they may not accept deposits via ATMs.

Convenience is the major consideration for most consumers who do their banking online. There are several types of transactions consumers can easily control via online banking accounts, such as viewing up-to-the-minute account activity; paying bills online – one at a time, in advance, or automatically; email notification of bills or other account activity; images of cancelled check; and the ability to download account records into financial management software.

Security is one concern about online banking, and banks have taken many steps to keep ahead of scam artists. But consumers must remain vigilant to protect access to their accounts. Keep your banking information private and never give out this – or any – personal information to someone in an unsolicited phone call or email.