What is Web Banking?

We are living in the age of advanced technology. It offers a lot of choices which has made our lives very easy. One of it is web banking.

Web banking is where the banks have an internet interface or a website from which most of the transactions can be carried out. The customer does not have to visit the bank personally for any transaction like transferring money or for a statement copy. The most significant advantage of web banking is time saving.

How does Web Banking Work?

In web banking, all the transactions are carried out through the internet. A bank creates a secure web environment. This enables the customer to view his account information and monthly statements, transfer money, make online bill payments, download forms and request customer service. Automatic payments, bill alerts and record searching can also be done through this interface.

Web Banking Services

Web banking provides almost all the services which a regular banking transaction does. This could be anything from making online bill payment to viewing account information. However, some transactions which require an in-person signature cannot be done through web banking. These are depositing cash or cheques and closing an account. Web banking allows the customer to purchase CDs, open accounts and funding IRAs.

Transferring Funds with Web Banking

With web banking there are many ways to transfer money. Money can be transferred using NEFT & RTGS. Funds also can be wired to a web bank through companies like MoneyGram or Western Union. Secure transaction sites like PayPal can send and receive deposits also.

You can transfer money to any account within the country instantly with web banking. For an external transfer, an initiation is required at the sending bank and a correct identification number of the receiving bank.

Web Banking Security

Though web banking is very convenient, there are certain things to be careful about. The computer which is used for web banking should have updated virus software. Likewise cell phones and mobile devices should also be protected. A user himself can ensure maximum safety by not sharing his password or banking code with anybody.

Most of the banks have secure sites. They ensure absolute security to its customers by employing layers of security, which include encryption, firewalls and an SSL (single socket layer) service. An SSL service protects every transaction.

Advantages of Web Banking

• Easy - Using web banking, the customer can make a transaction from anywhere.
• Fast - Most of the transactions can be finalized in less than 24 hours. Inter-bank transfers usually happen as soon as you click the "Submit" button.
• Convenient – The user can pay bills or buy stamps according to his convenience. He does not have to personally go to a bank or do it during his work time.
• Paperless Transactions - Web banking offers a green alternative to paper bank statements and 24-hour access to accounts.

Virtual Internet Banks

Most of the banks these days have a secure website and offer web banking. Interestingly there are also banks which do not have a permanent location and are only exist on the web. Such banks are called virtual banks. ING is an example of a virtual bank.

Since these banks do not have a physical establishment, their maintenance costs are lower. Most of these banks pass on the saving to the customer in terms of lower fees and better interest rates on savings accounts or CDs. Many banks also offer free checking accounts as long as the customer makes at least one direct deposit every month.