Technology continues to touch nearly every aspect of our lives every day, and banking is no exception. That’s why understanding the many different aspects of home banking and how it works can help you make the right decision for your financial needs.
Definition and Examples of Home Banking
Home banking refers to the process of accessing banking services without needing to visit a physical branch location in person. Home banking lets you conveniently manage many of your personal finances remotely. It allows you to perform various financial transactions, often with the click of a button via the web, mobile app, or telephone. This type of on-the-go banking gives you the opportunity to bank from your home, office, or anywhere you have a secure phone or internet connection. In addition, home banking provides you with direct access to all of your bank-account information, so you can do practically everything with your account that a bank teller can do, or more.
Alternate names: Online (electronic or internet) banking, telephone banking, mobile banking
An example of home banking is when you view your account balance on your cellphone’s bank app, or schedule a transfer between accounts from your laptop.
How Home Banking Works
While home banking may change how you bank, it does not change the fundamentals of banking itself. That means you still need a bank account with a financial institution to access home-banking features. However, home banking offers a more convenient alternative to branch banking. Due to the “anytime, anyplace” nature of home banking, you’re able to perform transactions and access banking services faster to meet your financial needs. To get started with home banking, first make sure your bank or credit union account is eligible for internet banking. Also, you’ll need access to the internet, a telephone, or your mailbox to carry out transactions. Since most home-banking services can be done online or through your financial institution’s mobile app, some of the features include:
Checking your account balance anytimeViewing your deposits and pending chargesSetting up notifications and account alerts if your balance falls below a certain levelTransferring money between accountsPaying bills online or through a mobile app
Having access to home-banking services can help you stay on top of your finances. For example, suppose you checked your account balance online and noticed that your funds would not cover all of your expenses. In that case, you could immediately transfer funds from another account to prevent overdraft charges, also using home-banking services.
Types of Home Banking
Although its name signifies a tie to banking at home, there are actually a number of ways home baking can be administered.
Online Banking
Online banking gives you the ability to handle your finances from the comfort of home. You can also complete transactions remotely anywhere at any time, as long as you have an eligible account and secure access to the internet.
Mobile Banking
Mobile banking involves using your mobile phone to access your bank-account information. You can access the information through your bank’s web page, text messaging, or by downloading its app.
Banking by Mail
Banking by mail is a service that offers you the ability to mail deposits, payments, and information directly to your bank or credit union. You also have the option to receive a receipt for your transaction by mail.
Telephone Banking
Generally, this refers to using a telephone to contact your financial institution. Similarly, telephone banking can also be used to conduct transactions using an automated system, such as checking your account balance, transferring funds, and determining if transactions or checks have cleared.
Pros and Cons of Home Banking
Pros Explained
Real-time money management: Home-banking technologies can present a faster and easier way to access financial services, track your spending, and manage your finances. Greater convenience: Home banking allows the ability to accomplish tasks on the go, which offers greater convenience for customers. Often offered as a free service: Home banking is provided by many financial institutions as a free service to customers.
Cons Explained
Increased difficulty reaching customer service: When consumers use home-banking services, it may be more difficult to access customer service if there is a discrepancy or something goes wrong. Risk of security breaches: Home banking can present privacy or security concerns when consumers use mobile devices to conduct their financial transactions.
Requirements for Home Banking
To access your financial institution’s mobile or online home-banking features, there are few basic steps you’ll need to take:
Start by gathering your account number from your bank statement or deposit slipLocate your bank or credit union’s website, or download the mobile appRegister by creating an online account with your financial institution and set up passwords for security purposesLog in and take the tutorial provided by your financial institution
Once your online account is active, you’ll be able to use your devices to perform many of your regular banking transactions, such as transferring money, monitoring your transactions, and checking your account balance.
Is Home Banking Worth It?
Choosing the right bank or credit union is an essential step toward meeting your financial needs. If convenience and easy access to your financial information is important to you, you’ll want to ensure your chosen bank or credit union offers some form of home banking. Another key factor to keep in mind is that some financial institutions offer reduced fees when you conduct all your banking online.
