The main purpose that banks have been serving since their inception is keeping our money safe for us. While keeping our money safe, they also let us earn a certain amount of interest on the money deposited with them. Traditional banks have been doing this, and internet banks continue the same function. The only difference is in the way the transactions are made.
Online banking has been around for quite a few years. In fact, it was introduced in the 1980s and has come a long way since then. The last decade has seen a profuse growth in internet banking transactions. Several pieces of legislation have also been introduced in this area.
Though it began in the 1980s, it was only in the mid nineties that internet banking really caught on. What attracts customers to internet banking is the round the clock availability and ease of transactions. Studies estimate that internet banking still has a long way to go. There are several banks that have customers who prefer banking in the traditional ways. Statistics released by the FDIC show that only 40% of the banks in the U.S. offer internet banking facilities worth mentioning. All the others may have an online presence but do not have enough online transactions to justify their presence on the internet.
Some customers have been known to turn to internet banking due to dissatisfaction with standard procedures and practices. The total absence of human interaction appeals to some people. Some customers turn to internet banking facilities for security reasons. This is mainly because of customers being assured of banks’ ability to keep transactions safe and secured.
Most online transactions are made using the Internet Explorer interface. The Internet Explorer has been around for more than ten years now.
By: Marcus Peterson
Posts Tagged ‘Internet Banking’
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March 5th, 2010Internet Bank Certificates of Deposit
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Online banking or Internet banking is a very convenient way of managing money, especially if you need to make transfers, check your balance or pay your bills after banking hours. You can print your billing statement in the comfort of your own home. You can access your account anytime and anywhere you may be. Nowadays, you can do almost all your banking transactions online with ease. You can even take advantage of online certificates of deposit.
What is an Internet bank certificate of deposit?
A certificate of deposit (CD) is similar to a time deposit account. With a CD, you acquire a fixed rate over a certain period of time – usually either three months, six months, or one to five years. A CD is designed to be kept in the bank until maturity, which means that the money can only be withdrawn when the time agreed upon has lapsed. There is a substantial penalty if you withdraw before maturity.
Because CDs are kept longer with the financial institutions, you can acquire higher interest rates, especially if you withdraw the money only after maturity. The larger the principal, the higher the interest rate. The longer the term or the smaller the bank, the higher the interest rates, too.
An Internet bank typically informs you of your CD balance periodically. You can instruct the bank to mail you the interest, deposit it directly to another account or add it to your CD account. You can opt to withdraw the whole amount including the interest once maturity is reached, or you can choose to deposit it into another CD account. It is a common practice for financial institutions to automatically continue the CD if there were no prior instructions for the amount to be withdrawn.
The edge the Internet bank CDs have over traditional CDs is accessibility. You can typically view your CD?s performance online anytime you wish, which is not the case with CDs from traditional banks.
By: Damian Sofsian
