ONLINE BANKING GUIDE
Control, that's why. It's so much easier and cheaper to transfer money, pay bills,
apply for a credit card or shift your savings into a higher interest account.
No queues during your lunch hour, no rushing to get to the bank before it closes
and certainly no worries about dealing with pressing transactions at ten o'clock
at night if you feel like it. You can do it all from the comfort of your PC.
Most of the services
currently available let you monitor your account and conduct much of your business
24 hours a day, 365 days a year. (Actually, if we're going to split hairs, then
this is a bit of a fib. Even some of the "open all hours" services close
for an hour or two in the dead of night, so if you like to shuffle your money
around when the rest of us are asleep, take care whose service you use).
However, the benefits
of being able to track and manage your finances online are very real. And by making
it easy for you to move money between accounts, you should be able to make it
work harder for you by keeping more in higher-earning accounts. After all, you
can now use the Internet to find the best rates on savings, cards and loans etc.
any time you like.
The reason online
banking is more efficient is that it costs banks less to run online services --
so you're more likely to benefit from much lower overdraft charges (as much as
half the rate of ordinary banks), as well as earn impressive rates of interest
on surplus funds in current accounts.
And the beauty
of it is that it's comparatively easy to switch things around if charges go up
or rates fall. It's usually very simple these days to open an account online.
You just log on, answer the various questions, provide a password and print off
the completed form for signing. If you can't print it off, they'll do it for you
and fire it off to you in the post. (A real signature is a legal requirement so
you will have to put pen to paper in the early stages).
Why Change Banks?
Did you know that we are more likely to divorce or move house than change banks?
It's true! Most of us open our first ever bank account in our teens and then we
stick with it forever and ever and ever. Why? Looking back, did you really know
what you were doing when you first toddled into the local Grabbit & Run and
exchanged smiles with the nice lady behind the counter before signing on the dotted
line and handing her your precious pocket money? Or the meagre income from that
newspaper round? Or your first student loan for college? No, of course, you didn't!
Banks count on
their customers not doing even the least little bit of homework before opening
an account. And then, after they've snapped you up faster than the closing jaws
of the hungriest crocodile, they count on you being too lazy to try somewhere
You'll know by
now that banks make big profits. Huge profits, actually. They do this by taking
your money and investing it, ostensibly for you, but really for themselves and
their shareholders. Their job is to make more out of you than you do out of them
and they're pretty good at it too:
- They use jargon
to keep you confused.
- They offer high
introductory interest rates and then quietly lower them.
- They hide the
fees and costs in the small print.
- They use pretty
adverts on the telly to make you think they care about you.
They do have costs,
of course -- the most obvious being the interest rate that they pay you (which
is why so many of the major high street banks tend to offer a miserly 0.1% on
your current account!). But, to be fair, it costs a bank to maintain a branch
network, to provide statements, to let you play around with your standing orders
and to withdraw money from cashpoint machines. All these facilities are inducements
to attract and keep you as a customer, and it costs the bank to provide them.
But by offering many of these facilities online they can reduce these costs.
Much of the above
might make you feel a little nervous when it comes to choosing a bank but there's
no need. What we have is a simple balancing act. If a bank scores well in one
area, it is bound to score badly in another. You just have to make sure that it
scores well in the areas which we hold dear to our hearts, leaving it to score
badly in those areas which we couldn't care less about.
You'll need to
make a list of the services that you want and then ask the banks that interest
you for the information you want. Some will provide the answers online (a Good
Thing) while others require you to phone them up (a Black Mark). You may want
to draft a standard e-mail asking specific questions and send it to all of them
so you can find out who is really on their toes.
What About Loyalty?
no need to consider loyalty anymore, is there? Your friendly bank manager no longer
exists. Nowadays, it's cashpoint machines, robotic voices on the end of your touch-tone
telephone and computerised statements. Why should you be loyal? This move towards
technological efficiency is certainly benefiting them, so why not take advantage
of it yourself?
of Online Banking?
Nothing is perfect.
Not yet, anyway. Some new Internet banking services are offering interest rates
for savings that are unsustainable in the long term and, ultimately, these will
have to come down. But, by all means go for these high rates while they are around
but watch out for when they fall.
And, judging by
the odd report in the papers about technical hitches, there are clearly a few
teething problems occasionally. Just as there are in any traditional bank when
the person you wanted to see is out to lunch, or the internal computer system
has crashed, or when Head Office hasn't sent over the forms for your new mortgage
yet. So what? The only difference with banking online is that there's only the
computer to shout at!
Whether you switch
over now or wait a bit is a matter of choice, but it looks as though the arguments
for doing so are becoming more compelling. It's true that you might find yourself
without access to your account for a few hours, but, if you're like everyone else,
you'll find that this already effectively happens from time to time with traditional
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