Internet banking refers to the use of your computer to transfer funds from one financial institution account to another. Internet banks let you monitor your account, send money to friends and family, and even pay your debts and bills from virtually anywhere. Internet banks differ from traditional banks in some ways as well. Here are some of those differences:
One of the most obvious differences between Internet banks and traditional banks is the lack of physical offices. Most internet based banks have locations around the world where they process transactions. The balances of these accounts are usually transferred electronically through the internet. This provides you with instant access to your account balances. If you do need to visit an actual bank location, then the chances are good that the location will be part of your own company’s network rather than a location that belongs to an outside financial institution. Online banks may have branch locations in a handful of cities around the United States, but they usually don’t have offices in all of the major cities across the country.
Another way that an Internet bank differs from a traditional bank is that it requires you to provide authorized collateral for an initial deposit. You must provide funds for a minimum of three months before you are allowed to withdraw the funds and you must remain within the assigned amount of funds for the entire length of that three month period. In order to change your authorization to authorize additional funds, you must contact your online banking system. This requirement may prevent many individuals from taking advantage of their online banking application because they must wait for their initial funds withdrawal authorization to expire.
Some Internet banks may offer more services than traditional banks. An example is that some offer direct deposit, which allows an individual to deposit their paycheck into their account electronically. Other online banking services include Internet bill pay, which lets you electronically pay your bills. There are also many Internet banks that offer Internet-based savings accounts that allow users to deposit funds and allow them to earn interest on the money. Internet based checking accounts offer a more basic checking account, but there are also no ATM fees with these accounts.
Internet banks often have accounts for Internet users with different levels of access. For example, some banks may offer accounts for Internet users with higher levels of security. Internet users may be able to make transfers to and from accounts through the Internet, and Internet users may be able to make transfers between Internet accounts in real time. Many Internet based banks offer Internet access to employees who work from home or from a remote location because of lower overhead costs to the Internet bank.
There are other Internet-only banking services available to Internet users. A high speed Internet connection is required to make Internet transfers and to conduct online banking transactions. In order to take advantage of some of these Internet services, a person must have a broadband Internet connection. However, many Internet users subscribe to an Internet service provider’s plan, which provides them with access to higher-speed Internet services. For Internet users who do not use high-speed Internet connections, online banking can still be used, though some of the more elaborate features may require dial up Internet service.
