Internet Banking

With all the attention online banking has received in the last couple of years, it seems there are new online banks popping up everywhere. Users are choosing online banking for its ease and convenience. And while issues of identity theft are important factors to consider with online banking, it has not stopped people from utilizing the Web to streamline their finances.

Even more importantly, recent studies suggest that Internet banking doesn't just make life easier, customers who choose it seem to be more satisfied with their bank. The two areas of greatest satisfaction fall in the categories of the convenience online banking provides and the ability to pay bills online. The report also shows that users who pay their bills online experience not only satisfaction with the ability to bank online, but with their specific banking institution, suggesting users have strong confidence in their bank's ability to secure identity. In fact, similar reports have also shown that those who pay bills online retain their business longer at a particular bank than those who do not use a bank's online service.

Many first-time users come to online banking to access their account information such as account balances and check activity. That is followed by the ability to transfer funds between accounts. And finally, many users then move into online bill payment.

Perhaps they start with paying a few utilities online at the utility's website. They may then look into the online bill payment service offered by their bank. Now, banks are seeing more and more users receiving bills electronically.

Yet for some bank customers, concerns about identity theft keep them from trying online banking. Interestingly, their counterparts who do use the Internet to conduct banking do not seem to hold those same perceptions. Most are satisfied with the level of online security offered by their banks. The challenge then for banks lies in the continued education of their customers to try online banking and discover for themselves the high level of security in place at most banks. Once those customers give online banking a try, perceptions of risk seem to decrease, reports indicate. Surprisingly, these same reports discovered that today's security measures put in place by PC users and banks have many ID thieves targeting potential victims offline.

The following are a few tips to consider when choosing an Internet bank account:

• The Annual Percentage Yield (APR) may be higher with Internet bank accounts, and therefore one of the most important attractions for those looking for a high yield. Conducting transactions online may save the bank money, and those savings may then be passed on to the online customer, most often in the form of higher savings rates.
• Ability to access money. Online users need to consider what steps are involved in accessing their money in an online account.
• Ability to link accounts. Users want the ability to link various accounts to one another, making it easy to move money seamlessly between online bank accounts.
• What types of additional services are available? Potential users should be interested in not only banking online, but purchasing CDs, applying for a mortgage, and paying bills online.
• Security. Users must confirm that their online bank is FDIC insured and that the security system can be trusted.
• Ability to set up automatic savings account. There's no reason not to save today with an online account that electronically deposits money into a savings or money market account.