How to Bank Online

This article provides information on how to bank online and how to set up online bank accounts. The convenience of online banking attracts many types of banking customers. Online bank accounts offer several benefits to account holders. For example:

Three Types of Online Banking Are Available

  1. 1. A bank located at a physical site - sometimes called a bricks and mortar bank
  2. 2. An actual bank that has added online banking services - sometimes called a clicks and mortar bank
  3. 3. An online bank only with no physical location - called a virtual bank

How to Choose the Right Online Bank

Compare the benefits of the versions of online banking before deciding to sign up. Consumers should choose the online version that is compatible with current banking transaction choices such as ATM use.

How to Bank OnlineLooking at the two types of online banking, we see one major difference. The online bank that has a physical location has its own ATMs. The virtual bank does not. Although some virtual banks do share an ATM network with other virtual banks.

What does this mean to the customer? Banks do not charge their customers for ATM use. But they do charge customers of other banks including virtual banks. Many account holders use ATMs frequently. With a virtual bank account, charges for ATM use add up fast.

At least one large netbank has its own network of ATMs which are listed on their website. Other online banks reimburse a set amount each month for ATM charges.

Online Banking Includes the Following Types of Accounts

Lower overhead costs mean savings to the consumer. Virtual banks maintain no bank buildings. Online banks do not mail out statements which means saved costs in paper and postage. These savings are passed on to account holders in lower fees and charges on accounts. For instance, a bounced check costs less online.

The online version pays higher interest rates on savings and investments. Recently, on a $15,000 account a major bank paid just 1.5% interest while a net bank paid 3.04%. On the other side, they charge lower interest rates on mortgages and auto loans.

How To Set Up an Online Account with Your Current Bank

Major banks all have online capability. Many smaller banks and credit unions also offer online banking. To add online to an existing account talk with customer service at the bank. But first check the bank's website; adding online might be accomplished on the site. Have these items ready:

Accounts currently active

1. account numbers
2. debit cards on the accounts
3. personal information, social security number
4. most recent statement

List of questions to ask

1. types of online transactions that can be done
2. details the online statement includes
3. do cleared check images display online
4. do recent transactions show up immediately
5. is automatic bill pay available
6. is direct deposit available

How to Set Up New Accounts with a Bricks and Mortar Bank

1. Activate a New Online Account at the Bank

Do research on the bank, read brochures, and check with current customers before deciding. Then visit customer service at a bank office. Take all pertinent information with you.

Two forms of identification are required: your social security card and driver's license. Also, birthdate and income source go on the application. Remember that most banks require a minimum deposit to open an account. It can vary from just one dollar to $100 or $300 or more. Bring the funds with you. Cash works best.

Fill in required information on their forms. Read all paperwork carefully before signing. Be sure all fees and interest rates are in writing.

2. Activate an Account Online on the Bank's Website

Activating online is quick and easy. The process takes about five to ten minutes. The same application information is required online: social security number, driver's license, birthdate, and income source. Some alternate IDs are birth certificates and state identification cards. Physical address and telephone number need to be supplied.

Money can be added to the online account at the time of application. Information on how to do that comes at the end of the application. The website indicates whether a "print, sign and mail" document is required for accounts opened online.

Live online chat can be clicked on most websites for quick answers to questions. Waiting on the telephone for answers is eliminated.

3. Activate an Account Online with a Virtual Bank

A virtual bank online application is similar to a physical bank's application. New account holders can complete the form in five to ten minutes. Fill in name, address, identification information, income sources, birthdate, and address. They do not accept post office box addresses.

Funding the virtual account can be done with a transfer from another bank account or can be mailed in. If the Virtual bank has ATMs, ask about dropping the opening funds into an ATM.

A main drawback of a virtual bank is the deposit method. Depositing a paycheck is easy through direct deposit. Other deposits are mailed in. Free postage paid envelopes come with many virtual bank accounts. Depositing at a local bank's ATM is an option, but many people do not trust the security of that method.

This article's information offers suggestions and information to assist your online banking. Make the best choice for your lifestyle.