Introduction to Electronic Banking

Electronic banking makes banking convenient on your schedule. Many people are now able to avoid the rush to get to the bank before it closes, as they can bank from a home computer or via automatic teller machine (ATM). Although the two systems are different, ATMs and online banking are the two types of electronic banking systems in use today.

Most banks routinely offer online banking services when customers sign up for accounts. There are a variety of options based on the type of banking account you have. For example, a checking account can be linked to an ATM card, and most accounts can be viewed and managed using online banking. A bank staff member must sign you up for services at the bank in order to use electronic banking.

An ATM card works two different ways--as credit or debit. When it is used as a credit card, many banks do not charge fees and the money does not come out of the account immediately. A debit card requires that a pin number be entered at the point of sale. The money automatically comes out of the account and many merchants, and some banks, apply fees to these transactions.

ATM withdrawals may be conducted at any ATM machine that accepts your debit card. You can withdraw money from your checking or savings accounts. If it is not an ATM machine from your own bank, it may charge you a fee. You can also deposit money through an ATM machine with your debit card.

Online banking is a service that allows you to view your account and transaction from anywhere with an Internet connection. From a computer, you can use it to balance your checkbook, pay bills and transfer money between accounts.

When a customer uses online banking she can also sign up for electronic bill paying. Once different accounts are linked to the bank account, automatic payments can be set up to take out of the bank account immediately on the designated day. Be sure to write down all expected transactions to avoid fees for accidental overdraft.

Many companies also allow you to pay over the phone with an "electronic check." This means you give them the routing, checking account and check numbers on your check. The check goes through a process similar to a debit transaction.