When was the last time you went inside a bodily, brick-and-mortar financial institution? A bit of bizarre, wasn't it? It's kind of like walking again in time, to an age the place tellers knew you by your first name and little youngsters have been given leather-based-bound savings account passbooks for Christmas. Financial institution branches can feel like ghost towns at instances. Huge, half-empty rooms with a bored department manager, an even more bored security guard and one lonely teller retrieving an account steadiness for a septuagenarian buyer.

Most of us choose to do our banking online, whether from a house or office laptop or our Web-enabled smartphone. In line with the American Bankers Affiliation, sixty two percent of American adults desire banking online in 2011. And that holds true for older Americans. A formidable 57 p.c of Americans above age fifty five want to financial institution online, up from 20 % in 2010 [source: American Bankers Affiliation]. Should you do all your banking by your financial institution's Internet site -- deposits, transfers, bill pay, assertion delivery -- then what's the purpose of paying extra charges and maintenance costs that assist cowl the electric bill for the branch manager's desk lamp?

This is the idea behind on-line banks -- also called on-line-solely banks, Internet-solely banks or direct banks -- which exist completely on the web without any physical branches. The very first online bank was Security First Network Financial institution founded in 1995 and based in Kentucky [source: Christopher]. A few of the larger names in online banking at present are Ally Bank, ING Direct and Uncover Bank.

In the remainder of this article, we'll clarify the services provided by way of on-line banks, highlight some great benefits of ditching brick-and-mortar banks, and talk about the hottest topic in on-line banking: security. Keep reading to study exactly what you are able to do at an online bank.

Certainly one of the primary questions that shoppers have about on-line-only banks is find out how to deposit a physical examine. The popular technique for many on-line banks is to scan the test on both sides and add the examine picture to the financial institution's Web site. Some on-line banks even let you snap a pic of your check with a smartphone app and make a deposit on the go. Relying on your on-line financial institution, the funds shall be out there in your account the identical day or the subsequent enterprise day. If you do not have a scanner or a fancy smartphone, most online banks additionally provide clients with free pre-paid envelopes to mail in checks for deposit.

Checking accounts and financial savings accounts are commonplace at on-line banks. Even higher, most provide free checking with no minimal stability. A number of on-line banks offer interest-bearing checking accounts, one thing that isn't commonplace at brick-and-mortar banks or is reserved for customers with excessive balances. As of November 2011, the best curiosity charge for a traditional checking account is zero.10 % with a $500 minimum stability, while rates on some on-line checking accounts are as excessive as zero.Eighty five % with a $1 minimal stability [supply: Google Advisor]. Debit cards are additionally standard for on-line checking accounts.

It is free and easy to switch money between separate on-line banking accounts, and free to ship cash to different prospects of the same on-line financial institution. Some banks even supply free person-to-person money transfers, even if the recipient is not an internet financial institution customer. All you need is the individual's identify, their electronic mail handle, the bank title and the last 4 digits of their bank account number [supply: ING Direct].

Just a few online banks offer loans, mortgages and car financing. Ally Bank, one of the most important US-based mostly on-line banks, was once GMAC, and remains to be one among the most well-liked backers of auto loans for US carmakers. A number of online banks additionally offer investment companies. The most typical are certificates of deposit (CDs), money market accounts, and Roth IRAs and IRA CDs.

Now let's take a look at just a few of the highest benefits for choosing a web based financial institution over a brick-and-mortar institution. It's normal for a traditional financial institution to cost for checking accounts, ordering physical checks, or for failure to maintain a minimum account steadiness. It is also common for banks to cost clients a price for utilizing an ATM at one other bank. In distinction, most online banks do not charge any fees in any respect.

Online banks are able to charge much less for banking providers because they have fewer bills to cowl. Consider the costs associated with operating a big chain of bank branches: the cost of shopping for or renting the land, constructing the constructing, employee salaries, utilities, the listing goes on. As a result of most online banking companies are supplied by a roomful of servers and an outsourced customer service workers, there is much less overhead [supply: Roberts]. And a few of these financial savings could be passed alongside to prospects. Several on-line banks supply 100 p.c free ATM providers at any ATM in America. Any charges that you are charged by another bank are reimbursed along with your monthly bank statement.

Another advantage of on-line banking is higher curiosity charges on checking accounts, savings accounts and funding merchandise like CDs and money market accounts [supply: Bomberger]. On this case, the variations could be vital. As mentioned on the previous page, the rate for a $1 minimum stability on-line checking account is eight instances larger than a conventional checking account with a $500 minimal stability. In response to the 2010 World On-line Consumer Security Survey by security firm RSA, 86 % of respondents mentioned they had been "very concerned" or "somewhat concerned" about having their private info stolen or misused whereas banking on-line [source: RSA]. Though losses associated to online banking fraud have decreased considerably over the past five years, it nonetheless prices shoppers tens of tens of millions of dollars a year in international locations like the U.K. and U.S. [supply: Kirk].

Phishing scams are certainly one of the most well-liked methods of committing online banking fraud. The classic phishing rip-off consists of an e-mail that looks like it's out of your bank, full with logos and graphics. Within the e-mail, your online bank says that your account might be terminated except you click on on a hyperlink and confirm your account data and private data like your date of birth and Social Safety quantity. Criminals can then use this highly delicate data to entry your real checking account or apply for credit score playing cards in your name. Not too long ago, Chase.com posted an example of a phishing rip-off that used a phony pop-up window where users are requested to enter their account info [source: Chase]. They already have that data on file. When you ever receive a questionable e-mail, the perfect advice is to call your bank's customer service line and see if the message is legit.

Another concern with on-line banking is the financial integrity of the financial institution itself. Is this a fly-by-night time operation or a stable, properly-financed institution? For peace of mind, be sure that you're employed only with online banks which can be insured by the FDIC [supply: Bomberger]. The FDIC was established in 1933 to guard depositors in the case of a bank failure. The everyday FDIC insurance coverage coverage ensures as much as $250,000 in deposits for every individual [source: FDIC].

For lots more details about online banking and Internet security, comply with the HowStuffWorks hyperlinks on the subsequent web page.

Financial institution on This: Check Your Pc Banking Savvy Sources
American Bankers Association. "ABA Survey: Popularity of Online Banking Explodes." September 8, 2011 (Accessed Oct. 28, 2011.) http://www.aba.com/Press+Room/090811ConsumerPreferencesSurvey.htm

Bomberger, Paul. Bankrate.com. "Should you bank online?" (Accessed Oct. 28, 2011.) http://www.bankrate.com/finance/savings/ought to-you-financial institution-on-line-1.aspx

Chase. "Fraudulent E-mail Examples" (Accessed Oct. 29, 2011.) https://www.chase.com/index.jsp?pg_identify=ccpmapp/privacy_security/fraud/page/fraud_examples

Christopher, Benjamin. FDIC Division of Research and Statistics. "Latest Developments Affecting Depository Institutions." February 1996 (Accessed Oct. 27, 2011.) http://www.fdic.gov/bank/analytical/banking/1995summ/art3full.html

FDIC. "When a Bank Fails: Info for Depositors, Creditors and Borrowers" (Accessed Oct. 28, 2011.) http://www.fdic.gov/customers/banking/details/index.html

Google Advisor. "Checking Accounts" (Accessed Oct. 29, 2011.) https://www.google.com/advisor/uschecking#! 副業探偵ジョブズ &Deposit+Range_D=5000.Zero&Zipcode_S=15317&si=zero&start=1

ING Direct. "Person2Person Fee" (Accessed Oct. 27, 2011.) http://helpcenter.ingdirect.com/ingd/Subject.aspx?class=C3BNKEOECK

Kirk, Jeremy. IDG News. "On-line Banking Fraud Losses Decline within the U.Okay." October 5, 2011 (Accessed Oct. 28, 2011.) http://www.pcworld.com/businesscenter/article/241155/on-line_banking_fraud_losses_decline_in_the_uk.html

Roberts, Amy. Good Housekeeping. "The professionals and Cons of On-line-Solely Banks." July 29, 2011 (Accessed Oct. 28, 2011.) http://shine.yahoo.com/occasion/financiallyfit/the-pros-and-cons-of-online-only-banks-2517390

RSA Security Inc. "RSA 2010 World Online Consumer Security Survey." (Accessed Oct. 28, 2011.) http://www.rsa.com/merchandise/client/whitepapers/10665_CSV_WP_1209_Global.pdf