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ONLINE BANKING - INTERNET BANKING

Online banking (Internet banking) is a term used for performing transactions, payments etc. over the Internet through a bank or credit union.

This allows customers to do their banking outside of bank hours and from anywhere where Internet access is available.

In most cases a web browser such as Internet Explorer or Mozilla Firefox is utilized and any normal Internet connection is suitable. No special software or hardware is usually needed.

There is a growing number of banks that operate exclusively online. Because these online banks have low costs compared to traditional banks they can offer high interest rates.

Online Banking Security

Online banking usually offers such features as:

• bank statements, with the possibility to import data in a personal finance program such as Quicken or Microsoft Money
• electronic bill payment
• funds transfer between a customer's own checking and savings accounts, or to another customer's account
  investment purchase or sale
• loan applications and transactions, such as repayments
• account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

Some customers avoid online banking as they perceive it as being too vulnerable to fraud. The security measures employed by most banks are never 100% safe, but in practice the number of fraud victims due to online banking is very small.

Indeed, conventional banking practices may be more prone to abuse by fraudsters than online banking. Credit card fraud, signature forgery and identity theft are far more widespread "offline" crimes than malicious hacking. Bank transactions are generally traceable and criminal penalties for bank fraud are high.

Online banking can be more insecure if users are careless, gullible or computer illiterate. An increasingly popular criminal practice to gain access to a user's finances is phishing, whereby the user is in some way persuaded to hand over their password(s) to a fraudster.

Also remember that not all banks operating on the Internet are insured by the FDIC. Many banks that are not FDIC-insured are chartered overseas. If you choose to use a bank chartered overseas, it is important for you to know that the FDIC may not insure your deposits. Check with your bank or the FDIC if you are not certain.

For insurance purposes, be aware that a bank may use different names for its online and traditional services; this does not mean you are dealing with separate banks.