Online Banking Annotation

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People of all ages have discovered a new world of convenience right in their own home. That convenience is on-line banking. Exactly what is on line banking? It is a service provided by many banks, thrifts, and credit unions that allows you to conduct banking transactions over the Internet using a personal computer, mobile telephone, or handheld computer. Online banking allows you to access your accounts round the clock, you can view your account balances, transfer money from one account to another, make loan payments, see if a check has cleared, receive and pay bills on-line and much much more. You have access to your financial information 24 hours a day.

On-Line Banking began on October 6, 1995, when Presidential Savings Bank located in Bethesda, Maryland offered its customers an online alternative to traditional brick and mortar banking. This move in electronic customer convenience was quickly emulated by an Internet-only bank, Security First Network Bank, and then followed by other “brick and click” banks such as Wells Fargo, Bank One, and Chase Manhattan Bank.

The benefits of an online bank account versus one at a traditional bank tilt in favor of online. For instance, the minimum balance required to stay away from a monthly service fee is $812.50 online, while it's $3,372.18 at a traditional bank. The fee assessed online should you drop below that balance is $3.75 as compared to $12.55 at a traditional facility. As you would expect, the yield on an online account is better, 0.69 percent as compared to 0.12 percent at a traditional bank. If noninterest checking fits your needs, you'll find the average minimum to open is $140 versus $68.32 at standard banks. But the average online nonsufficient funds fee, or NSF, is $29.78, a bit higher than the traditional banks' average of $29.58.

Question we should ask ourselves before we begin using on line banking. Is it safe? How do I protect myself? And which online financial institution should I trust with my money? Federal Deposit Insurance Corporation (FDIC) has a website and brochure that offers tips for safe banking over the internet. They recommend that you confirm that an Online Bank is legitimate and that your deposits are insured. Read key information about the bank posted on its web site. Verify the banks insurance status. You can go on FDIC website www.fdic.gov and search for an institution. A positive match will display the official name of the bank, the date it became insured, its insurance certificate number, the main office location for the bank and branches, its primary government regulator, and other links to detailed information about the bank. If the bank your considering doing business with on line does not appear on the list it would be recommened that you do not bank with them. Instead look for another bank to do business with that is on the list.



A survey done by the American Bankers Association on August 14-16-2009 shows that for the first time, more bank customers (25 percent) prefer to do their banking online compared to any other method. The survey of 1,000 consumers was conducted for the ABA by ipsos-Reid, an independent market research firm. A list of questions asked was designed to take a snapshot of current consumer trends. Survey results showed that the popularity of online banking was not exclusive to the youngest consumers: it was the preferred banking method for all bank customers under the age of 55. Consumers over 55 still prefer to visit their local branch (26 percent), followed by ATMs (17 percent). Among all consumers, the preference for online banking was followed by visiting branches. Consumers over the age of 55 still prefer to visit their local branch.

Internet banking is here to stay, we can choose to embrace it and enjoy the convience of using on line banking or we can choose the traditional method and get in our car and drive to the nearest bank branch. I believe that the usage of online banking will continue to increase. The new generation of adults have been brought up with the computer and are not intimidated by it. Using online banking will be the norm for them. Going to a bank will probably seem foreign to them.

“Online Banking Marketplace and Trends.” Presidential Online Bank. 5 May 2008. Web. 14 August 2010.

“The Benefits of On Banking.” Bankrate.com. 5 August 2010. Web. 14 August 2010.

“Safe Internet Banking.” FDIC. 15 July 2010. Web. 15 August 2010.