Online banking first appeared on the scene in the U.S. in 1995, during the days when the Internet was just starting to become part of everyday life. Today, online banking is ubiquitous, popular, and not going away anytime soon.
So, is it better than traditional banking? In order to decide, it’s important to first look at what each has to offer.
Advantages of Traditional Banking
What you see is what you get. In a traditional bank, as opposed to online banking, you physically present your check for deposit, get cash handed back to you, place items into or take them out of bank safety deposit boxes.
Here are some other traditional banking advantages:
- You can interact with a bank manager, teller or special accounts representative.
- The physical bank has walk-up depositories located outside the bank for easy deposits and withdrawals any time of day or night (as long as they’re not being serviced, or out of service), 365 days a year.
- You have the security of knowing your deposit is safely in the bank, since you obtain a hard copy receipt from the teller or the ATM.
- Banks have increased security in the form of surveillance cameras and on-duty security guards.
Customer convenience is the number one advantage of online banking. Like the traditional bank’s ATM, online banking is available 24 hours a day, 365 days a year. However, you can do your banking from the comfort of your own home.
Here are some other advantages of online banking:
- Online banking is accessible everywhere. Out-of-state or out of the country, anywhere you can get an internet connection, you can log on and conduct business.
- It’s fast and saves you valuable time. In a matter of seconds, your transactions are complete. You can print out your receipt for your records, and do multiple tasks.
- Efficiency counts as well. With online banking you can open up CDs, IRAs, set up auto pay and bill pay, pay all your bills, check all of your accounts, move money between accounts; virtually everything you’d have to stand in line to do at a traditional bank, you can do effortlessly with online banking.
- Online banking saves money. No more last-minute trips to drop off your bill payments at the post office or the utility. No more stamps and envelopes to buy. You can even arrange for your bills and monthly bank statements to be sent to you electronically.
- Email alerts help protect the safety of your money should there be any unauthorized activity on any of your accounts.
- Online banking is compatible with money management programs such as Quicken and Microsoft Money. Online banking also uses sophisticated tools that make managing your money and your accounts easy and safe.
In the end, the type of banking you prefer is really just that, personal preference. Some people just want to continue to interact with the tellers they know at their neighborhood bank. Or, they like the security of actually seeing where their checks are deposited or the feeling of cash in their hands.
If, on the other hand, time is a precious commodity, you're a multi-tasker or you just like the convenience and control of doing your banking over the Internet, then online banking is right for you.