Online Banking Makes Money Management Simple and Safe

Making sure your money is where it's supposed to be, when it's supposed to be there, is getting simpler all the time with online banking.

Online banking services let credit union members safely monitor their money, move their money, and even keep more of their money by taking advantage of timely offers. That's the consensus of experts from three firms that help credit unions offer online banking services: John Mattes, president and chief operating officer of Cavion Plus, Mounds View, Minn.; Jane Schachtel, director of marketing at Digital Insight, Calabasas, Calif.; and John Pantaleon, president and chief executive officer at Worldwide Interactive Services, Orlando, Fla.

Credit union members who overlook online banking, often called online branching, are missing opportunities to make life easier, according to Mattes.

"I am unrestricted by time, by the credit union's hours, by space or place or location," Mattes says. "I can do what I need to do when I choose to do it. And I can do so with unparalleled efficiency, privacy, and accuracy."

Add convenience

Many members begin learning about online banking by monitoring account balances and tracking transactions. Some credit union sites can display images of checks you've written, so you can verify the recipient, date, and amount. If you forget to record the amount of a debit card purchase at a gas station, online banking allows you to go online to retrieve a current statement listing the transaction.

"I don't need to wait until the end of the month when it's convenient for the credit union to mail [my statement] to me," Mattes says. "I can get the information and reconcile my account whenever I choose to do it."

At some credit unions, members can sign up to receive "account notifications," sometimes called "account alerts." These short e-mail messages or automated telephone calls provide account information or special offers. Members can set up account alerts online.

Pantaleon says a member might ask to be notified, say, when a checking account balance hits $100, when a specific transaction has cleared, or when a payroll check is deposited. Some credit unions also offer a telephone call option to alert members who check e-mail infrequently or travel without Internet connections.

Save time

Schachtel uses the example of a mother juggling multiple roles to illustrate the benefits of online bill payment. "She can sit down and in five minutes--literally--pay her bills so that she has more time to do anything, whether it's go to work, spend time with children, or whatever," Schachtel says.

One of the best benefits? Your bills are always paid on time. That's the strongest contributor to a stellar credit record, and that's your best way to earn the lowest borrowing rates. Plus, you never need worry about incurring late-payment fees or interest rate penalty hikes for late payments.

Paying bills online cuts costs; you'll purchase fewer paper checks, as well as eliminate the need for stamps and envelopes. Some credit unions also offer online bill presentment, which allows the company sending the bill to deliver it via the bill payment service.

Online banking automates other functions to save time and help you achieve financial goals. For example, Schachtel says you can move funds from checking to savings at the end of each month to help reach the goal of a down payment on a house.

Safeguard accounts

Identity thieves and hackers gaining unauthorized access to accounts often make headlines, but online banking actually protects you from many types of fraud. Schachtel says studies show that most identity theft still occurs when thieves obtain information on paper by digging through trash cans or stealing from mailboxes. Online banking users reduce that risk when they receive electronic credit union statements or send payments online.

Another plus is that you can monitor accounts to quickly catch and counter attempts to transfer funds or make unauthorized purchases. You can trigger "alerts" to notify you when an account has an unusually low balance or a high-dollar transaction clears an account. Pantaleon notes that many online banking services allow you to monitor plastic card activity daily, including debit and credit cards, for unauthorized purchases.

To prevent others from gaining access to accounts online, change online banking passwords frequently. Schachtel says many incidents of identity theft result from sharing password information at home, so avoid telling your password to anyone. Never create passwords based on common information such as birthdays, addresses, or your mother's maiden name. Never respond to an e-mail purporting to be from the credit union that requests account or password information--an activity called phishing. The credit union will never ask for this kind of information by e-mail or phone; it's already on file.

When visiting the credit union's site, make sure the secure area of the site--those Web pages you access after you log in with your password--always has "https" at the beginning of the Web address displayed on the top of every page, and a padlock on the browser frame--not within the page.

Never share personal account information in e-mails. The exception is secured e-mail or instant messaging your credit union offers through its online banking service. A secured message session should have "https" in the Web site address and display a locked padlock icon.

Explore your options

Remember that online services will vary, so take time to explore your credit union's site. Online loan applications may offer loan approval in less than a minute. Members may be able to view photos and descriptions of repossessed vehicles offered for sale, or set up a financial calendar that displays personal financial commitments. Some credit unions allow members to monitor accounts at other financial institutions and use online banking to make payments to other individuals. Some make it possible for members to join online and electronically transfer money from accounts at other financial institutions to the credit union.

Many improvements are aimed at providing better security. For example, Pantaleon says some credit unions soon will be using biometric devices that scan physical characteristics, such as a fingerprint, to verify a member's identity at the start of an online banking session. Other credit unions allow members to choose their own log-in names or add other layers of protection.

Online services can vary significantly; Mattes notes that it's up to members to tell the credit union what you want to be able to do online.

"If your credit union doesn't offer it, ask for it," Mattes suggests. "That's what an online partnership is all about."

Published September 5, 2005