Online Banking: How to Start, What to do Online

How to Get Started With Online Banking

Wallets and Laptop
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Online banking is about managing your money online. You can certainly save trips to the branch, view account balances, and move money between accounts, but you can also do much more. When you go electronic, you can do even more than you’d get done at a branch (often with better rates), and in some cases, you’ll use non-bank services or apps with even more to offer.

On this page, we’ll cover how to start banking online, and how to complete common tasks such as paying bills, depositing checks with your mobile device, earning interest on a free checking account, borrowing money, and more.

How to Bank Online

If you’re just getting started, there are two ways to bank online: use your existing bank, or open a new account (possibly with an online-only bank).

Existing bank: if you already have a bank account, you’re halfway there. Almost every bank or credit union offers online banking – you just haven’t used it yet. At a minimum, it’s a good idea to use your bank’s app or website, and it might also be worth looking into online-only banks.

To start banking online using your existing account, you’ll need to sign up for electronic services. In most cases, that’s just a matter of going to the bank’s website, looking for “Online Banking” or something similar, and clicking “Register” when asked for a username and password. If you use mobile devices, you can do everything there instead – just download your bank’s app and register for a username and password.

If the process is confusing for you, don’t hesitate to call (or visit) your bank and ask somebody to walk you through the process.

They are eager to get you online because you’ll handle routine service requests on your own and you’ll use up less staff time in the future. Really, they’ll be glad to help you figure out the system.

Opening a new account: if you don’t have a bank account anywhere (or you’re going to open an account at an online-only bank), it’s time to open one.

Having your own account allows you to save a lot of time and money, and you’ll be even better off if you bank online. First, you’ll need to decide if you want to use an online-only bank (which does not have any physical branches). Online-only banks are more likely to offer higher rates on savings accounts and free checking. However, physical branches offer valuable services that you can’t get from an internet-only bank.

The good news is that you can do both: use an account at a brick-and-mortar bank or credit union and open an account at an online-only bank. Internet banks are almost always free accounts (assuming you don’t bounce checks or overdraw your account) so it shouldn’t cost you anything extra.

If you want to start banking online, you might as well start by opening your account online. Most banks now allow you to complete your application entirely online (read about how that works – it’s easy).

Need ideas on where to open an account? It's best to research and find a bank that really meets your needs, but it's hard to go wrong with the following:

  • Capital One 360 (savings accounts and checking with interest)
  • Ally Bank (savings accounts and checking with interest)

Things you can do Online

Once you’re up and running, it’s time to start using your account.

You can keep it simple if you like and just view your account balances, and if you’re comfortable you can move on to more advanced tasks.

Pay bills: one of the earliest (and most useful) features of online banking is free online bill payment. Instead of writing checks and mailing in payments, you can have your bank do all of that for you – plus you’ll save stamps. Learn how to pay your bills online.

Earn more: online banks are a great place for your savings. Most online accounts pay more than traditional brick and mortar accounts, and internet-only accounts pay the best rates (typically with no fees or minimum account balances). Online banks also offer money market accounts and certificates of deposit (CDs) if you want to earn more.

Free checking (possibly with interest): it’s getting harder to find free checking accounts at brick-and-mortar banks, but free checking is the norm at online banks.

In fact, an online bank might even pay you interest on the cash in your checking account.

Deposit checks: if you’ve got a mobile device with a camera, you can probably use it to deposit checks into your account – any time of day or night. You don’t need to find the time to make a trip to the branch or wait for the mail to deliver those checks to your bank. Learn how to deposit checks with a mobile device.

Along the same lines, if you’re still getting your wages paid by check, why not have the money automatically deposited to your bank account? Your employer will get funds to you more quickly if you sign up for direct deposit.

Send money: need to pay a friend for your share of dinner? There are several easy ways to send money to somebody without writing a check or digging up exact change. Some banks offer services for making payments, while other services (think PayPal) simply act as a front-end and access your bank account. See how to make electronic payments (usually for free).

Borrow money: in addition to deposit accounts (like checking and savings accounts), you can also borrow online. Traditional banks let you fill out applications, and newer online lenders make borrowing completely different – it’s easier to get approved, faster, and less expensive to borrow.

Staying Safe

Online banking makes life easier, but it also makes a few things easier for thieves.

Fortunately, you’re probably safer when you take your finances online. Security features are extremely strong, and you don’t have to worry about old-fashioned techniques like stealing mail and forging checks. In fact, the U.S. Government encourages everybody to receive Social Security via direct deposit, in part to reduce fraud.

The main threat to your account is you – think twice before you provide information to anybody. Remember that your bank will never contact you and ask you for your account number, Social Security Number, password, or PIN. Those requests are almost always phishing scams. As long as you keep your devices up to date (including operating system updates, spyware and malware programs, and antivirus protection), you’ll be immune to most threats.

If your account is affected by fraud or errors, there’s a decent chance that you’ll be protected (in your personal accounts – your business accounts are another matter). But you have to notify your bank quickly to get maximum protection.