Advantages and Disadvantages of Online Banking

With the advent of the Internet, online banking has gained immense popularity. The ease and the convenience of banking from anywhere in the world, without having to physically visit the local bank, has made internet banking an indispensable facility for many people. The following are the pros and cons of internet banking.

Pros and Cons of Online Banking

The pros and cons of internet banking will be able to be summarized as follows:

Advantages of Internet Banking: Internet banking or Internet banking, offers the convenience of banking from anywhere, at any time of the day or night. It is a free facility provided by the banks to their end users. Expediting the payment of bills, helping people keep track of the balance in their account and transferring money between accounts are some of the advantages of Internet banking.

Paying Bills Internet: Internet banking provides people the facility of paying bills internet from their checking account, money market account or credit card account or from their home equity line of credit. In order to avail this facility, people would have to set up payees or pay to accounts for which they would need a copy of their bills. Recurring payments could be designed without delay, by making use of the facility of being able to set up pay to accounts, on completing a simple formality. One can schedule bill payments up to one year in advance. Online banking helps people keep their bill payment history in an electronic format, thus eliminating the need for paperwork. Some companies also dispatch bills directly to the client's online banking service. However, not all companies present e-bills. The customer are going to thus receive, view and pay e-bills or digital versions of their paper bills.

Electronic Finances Transfer: Internet banking allows the facility of digital transfer of money between a number of accounts maintained with the same bank. Generally, people can transfer money from their checking or their savings account to the following: credit cards, line of credit and investment account. People may also transfer money from their personal account to the personal account of others, assuming that the accounts are maintained with the same bank. Depositors can also opt to transfer funds from their personal account, maintained with a bank, to the accounts maintained in other financial institutions. Withdrawals and deposits are thus facilitated by digital fund transfers.

Other System: One may access one's account from anywhere in the world and view the current balance in the linked accounts. The system of linked accounts allows the bank to transfer money from the depositors savings account to cover the overdrawn checking and credit card account. Viewing the balances in linked accounts helps a person keep a check on spending habits. Stopping payments on checks, re-ordering checks, requesting copies of paid checks, savings and checking account statements are some of the other services of online banking.

Disadvantages of Online Banking: Although the advantages clearly outnumber the disadvantages of Internet banking, some people may prefer banking the old fashioned way due to the following reasons:

Safety Concerns:In the article titled, "Is Online Banking Safe", cyber scams that may target unsuspecting customers were explored in great detail. Phishing, the presence of malicious software, keylogger issues and protection concerns due to weak wireless safety networks deter people from opting for Internet banking.

Meant for Tech Savvy People: People belonging to the older generation may not be tech savvy and may find it difficult to adapt to internet banking.

Internet banking is a wonderful facility that are going to save us time and make our life simpler. However, one must take adequate measures to guard oneself from getting cyber scammed.


Do check some Online Banking Reviews so you can make the best choice. You can then Open an Online Savings Account and make the best out of it.