Advantages of online banking

Online services are in high demand among credit union members. And no wonder—online banking has brought the functionality of the teller window into people’s homes and, increasingly, into their mobile devices. It’s hard to remember a time when you had to visit a brick-and-mortar building to conduct the most common transactions, like transferring money from your savings to your checking account.


Central banks—in the United States that’s the Federal Reserve—have been wiring funds back and forth since the late 1800s, but it took a century before electronic money transfers and “at-home” banking entered the mainstream. In 1981, four large banks in New York City launched the first online banking systems, and the world has never looked back. By 2006, 80 percent of credit unions and banks in the United States offered some form of online account access.

Following the arrival of smartphones in 2007, fully-functioning mobile banking apps arrived on the scene and, for the first time, people could complete many banking transactions from anywhere they had an internet connection. It caught on. By 2012, more than 21 percent of all smartphone owners were using mobile banking.


It’s easy to understand the popularity of digital services. From the comfort of your living room, before you even change out of your pajamas, you can complete most ordinary transactions, including:

Even people who like the face-to-face interaction at the teller window recognize the utility of using online and mobile banking when they travel, are laid up with an illness or injury, or otherwise can’t get to the credit union. And what about the busy parent who has misplaced their checkbook or run out of stamps? Wouldn’t it be more convenient to jump online and pay bills from wherever they are? To the two-thirds of Americans who use digital banking, the answer is a resounding yes.

Online and mobile banking is secure; credit unions and banks have spent billions of dollars making it so. Financial institutions have installed firewalls, anti-virus protection on their computers, fraud monitoring systems and website encryption which scrambles data so only the intended recipient can read it. You can do your part by creating a strong password and being vigilant about your account safety.

Only a generation ago, paying bills was a household chore that took time and energy. A person would have to sit down with their checkbook and go through the household bills one at a time, writing checks and stuffing envelopes, hoping nothing would be lost or delayed in the mail. With online banking, that task has shrunk to mere minutes. Bills that recur every month can be scheduled for automatic payments, and one-time payments can be scheduled in advance so they’re never late. The cost savings add up, too. In addition to spending nothing on envelopes and checks, your savings on postage can be substantial.

Today, online and mobile banking users are finding new ways to use electronic banking. It’s much easier, for instance, to avoid the expense and embarrassment of overdrafting your account when, with just a couple of taps on your smartphone, you can check your account balance before making a purchase. Parents are keeping tabs on their college students by checking the transactions on their credit and debit cards, and transferring funds into their student’s college account before they run short. Birthday checks from Grandma might not arrive in a card anymore but just show up as a deposit in your account. As consumers find new and ever more useful ways to integrate online and mobile banking into their lives, the days of standing in a teller line or sitting on hold with a call center is fading into a quaint memory.

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