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Use
online banking to simplify your life
Online
banking tools are now secure, easy to use, and save time
| I
started using online banking in 1998, when my bank (The
Chase Manhattan Bank) sent me the software on three floppy
disks. In those days, for security reasons, you had to
install a software on your PC which would then dial the bank
and get you online. Even though it was not so fast in
those days and I had to be home to be able to use it, I was
hooked. So when Chase Manhattan Bank made the
browser-based version available (which means no matter where
I was I could do my banking), I am a big fan of online
banking simply because I have several less things to worry
about now. Right now several leading
banks, for example,
Wells Fargo, Sovereign Bank,
CitiBank, NetBank, Wachovia,
offer online banking. |
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 How does online banking work?
Your bank is
probably already trying to switch you to online banking (it
saves them money if you switch to online banking because you
visit the branch less often and hardly ever need to call them)
and you will need to sign up few documents for your online bank
account (call your bank
to find out how you can do it). Once you have your user
ID and password, you can get into your account from any
computer connected to the Internet. (Related:
Online shopping safety)
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Once you are
logged in, you will be able to do most things that you can do
in a branch and a lot more since the data is shown in real
time. So you can see all deposits, withdrawals, checks
cleared, etc. as they happen. But that is not the
biggest benefit of online banking. The biggest benefit
is the ability to pay your bills online. What you do is
that the very first time you want to pay a bill, you enter the
payee information (name, address, account #, etc. from your
bill) and then just enter the amount and the date that you
want the check to go out. You get an immediate
confirmation. After that it is the bank's headache to
make sure that your payment is sent to the payee. In
most cases, the banks have existing relationships with other
institutions (e.g. credit card companies, phone companies,
etc.) and they simply do an electronic transfer. In
cases where the payee is a small company (for example, the guy
who comes and fills our oil tank and another who services our
irrigation system), the bank simply prints a check with my name and mails it to them. You don't need to worry about
any of this and the bank even does not charge you for the
stamps (if it does, you should change banks and we will get
into that below). (Related:
Personal finance for empty nesters) |
How to select a bank so that you can do
your banking online?
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If your current bank is offering it, you
must sign up but do not pay a single penny to them either
as a service charge or for anything else. The bank
should also put the stamps for you and mail the checks for you
at no cost (it is fairly standard practice now). If
your bank wants to charge you for online banking, it is
time to look at other banks in your area and on the
Internet. Once you
have that information you can even "negotiate"
with your existing bank
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You can also bank with a true
"online bank" (the ones that do not have a
physical presence). Take a look at this alternative
as well because my nearest branch is now over 150 miles
away and I have not visited a branch in over 5 years now
(when I have to deposit a check, I just mail it to the
bank). I can use any ATM that I want but if you are
really concerned about paying the fees that banks charge
for letting you use their ATM, you can simply ask for
cash-back when you pay for your groceries.
How to make the best of online
banking?
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Pay all your bills through your online
account rather than going to the websites of the
institutions themselves. If your mortgage or credit
card companies want you to pay the bills on their
websites, don't do it. It will only make your life
complex since you will have too many accounts to track and
passwords to remember.
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Stop all your electronic fund transfers (EFT)
or automatic deductions. Once you sign up for these,
you lose control. With online banking, you are in
control.
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Set up automatic payments for amounts
that do not change (e.g. your mortgage payments), and when
you get the bill just check to see if there is no
change. If so, nothing to do. If there is a
change, just go and edit the amount to be sent out.
Related:
How to become rich
Money tips for couples
Tell kids about money
How to improve my income?
How to save money to have a real impact?
Do I need a household budget?
How much money needed to be happy?
How to create personal wealth |
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