11 Online Banking Features You Want to Have

Online banking, though it’s becoming a fixture in many homes, is still relatively young.

It’s not a big surprise, then, that we want our banks and online financial applications to do more and add more.

Yodlee, which makes online banking software for financial institutions, sponsored a white paper from the Aite Group called Next-Generation Online Banking and Bill Pay: A Concept-Testing Study Among Banks and Consumers, which looked at how online banks can improve.

Most of the white paper deals with how banks can differentiate themselves from the competition, but there are some interesting statistics about features we online bankers want to have.


Source: Aite Group, September 2006 survey of 1,204 consumers of age 21 and older with equal gender distribution who were demographically balanced to the U.S. Census

The feature topping the list, E-mail or text message alerts for large transactions that may indicate identity theft, is a great idea. Because many people are still worried about online banking security, giving them the ability to tackle problems quickly should they arise is key.

Here’s the conclusion from the white paper:

Banks typically don’t feel like they suffer from a huge functionality gap, largely because they enjoy a relatively high level of satisfaction among their online banking users. While this is comforting news, the flip side is that banks are finding it increasingly difficult to differentiate. While their online offering may be good enough to retain existing customers, over time, it will not be differentiated enough to help stay ahead of the competition and achieve their goal of expanding the channel’s role as a customer-acquisition and sales-engine vehicle.

While this white paper is sponsored by Yodlee (read: biased), the information is still useful and gives us a great idea of what online banking will look like in the future.…

How to Find, Choose and Open an Online Savings Account

Online savings accounts are one of the newest, safest and best ways to make your money work for you.

What Are Online Savings Accounts?

Online savings accounts are high-yield, FDIC-insured bank accounts that are managed and accessed over the Internet. They can’t be found in stores or at your local bank — they’re entirely online.

For years, brick-and-mortar banks have been robbing you of your savings. They’ve consistently delivered low-yielding savings accounts because there hasn’t been any competition.

Then came ING.

ING Direct, one of the pioneers of online savings accounts, re-invented banking for today’s consumer. Their CEO, Arkadi Kuhlmann, says that they’re looking out for the customer by removing fees and passing along the savings.

When I first found out about online savings accounts, I signed up. And they completely changed my money outlook.

How Can I Get Started Saving Online?

Congratulations! Opening an online savings account is a great first step to saving money.

If you’re on the fence about saving online, know that today’s competition makes it a great time to get started. To help you get over the hump, consider these 10 reasons to open an online savings account.

It doesn’t take much to start saving online.

What Do I Need to Know?

There are 5 important things to look for in an online savings account.

Know what you’re getting into before you open an account. Many accounts are similar, but make sure you get the basics covered.

You should also be aware of some of the pitfalls of online savings accounts. They’re a great tool, but they could be even better.

Don’t be worried about opening an account, though. It’s totally safe (assuming you’re using an FDIC-insured bank) and totally secure.

Which Account Should I Open?

Consider 10 of the best online savings accounts currently available. The list changes all the time, so shop around and find the best rate.

If you’re looking at the right time, some accounts offer sign-up bonuses. Others offer promotional rates for new savers.

Businesses can get in on the saving too — ING, for example, has a high-yield business online savings account.

I Opened an Account — Now What?

Feed you account and watch your savings grow!

You can link your banking account to your new savings account and transfer money (up to 6 ACH transfers per month).

You’ll probably have to confirm a couple of small deposits into your regular checking account, and then you can get started.

Consider setting up automatic deposits to your account to build your savings. You’ll be forcing yourself to save money and your savings will snowball.

You’re money is working for you like it never has before. It’s making money and won’t stop.

A Word of Caution

Now that your online savings account is open, get excited about saving! But don’t worry day-to-day about getting the highest rate available.

Sometimes it’s appropriate to transfer your money to a new online savings account, but being a rate chaser has its drawbacks. You could end up spending more time moving around your money than watching it grow.

The Next Savings Step

First off, a big congratulations on opening an online savings account! It’s a great first step on your savings journey.

When you’re ready to get going, start saving money other ways. There are at least 10 ways to immediately start saving money … and then 10 more ways.…

Scan and upload your checks the next step in online banking

Even though I’m nearly done with writing checks, I still receive one or two on a regular basis from rebates, payments, etc.

While I have to go to the ATM to cash the check, it’s not the only way to make a deposit with a paper check.

The USAA Deposit@Home service allows you to scan in a check, upload to the Internet and deposit into your online account.

This is the scan and upload process:

Enter your deposit amount online.
Scan the front of the check, cropping for size and rotating appropriately.
Sign and scan the back of the check.
Void the check.

It appears that you can use any scanner, and the USAA’s interface provide the necessary tools for upload.

To be eligible for the Deposit@Home service, you need to have an account with the USAA, which means you need to be (or related to) someone with military service (find out if you’re eligible).

While this seems like it might be a convenient option for depositing, it’s not nearly as easy as getting the funds sent online in the first place.

In a perfect world, we’d all make ACH payments or PayPal transfers to each other and keep sending money paperless.…

Online Banking the Leading Internet Activity That Makes Your Life Easier

According to a new survey from Harris Interactive (and commissioned by Symantec, makers of Norton AntiVirus), online banking is the leading Internet activity that makes your life easier.

According to the Harris poll, 86 percent noted that online banking saves them as much as five hours weekly and more than one-fifth (21 percent) of respondents say online banking has made it unnecessary for them to ever visit a bank in person.

As a hardcore online banker, I rarely have to go to the brick and mortar. In fact, I get slightly annoyed when I have to go to deposit a rebate check or get cash out of the ATM.

“Consumers are using the Internet to make each day of their lives easier and this research demonstrates that online banking — more than any other activity — makes a significant impact,” said Vince Steckler, senior vice president, worldwide consumer sales, Symantec.

Online banking also allows me to keep track of my purchases for reporting in my budget — it’s an invaluable resource.

Even though this report was commissioned for the purpose of promoting Norton Internet Security 2007 and their partnership with Bank of America, I’m slightly surprised that online shopping didn’t top the list.

Online banking is an amazing tool, but it’s still growing. Many consumers are still weary of making financial transactions online, even if it is totally safe.…

Should Online Banking Be Inconvenient?

We’ve talked a bit about being smart and secure when banking online, but at least one “financial analyst” thinks that online banking needs to be difficult to use in order to keep you safe.

Although customers should expect convenience from an online account, they should be wary of an Internet bank that makes it too easy for someone to set one up, said Avivah Litan, a consumer-finance analyst for Gartner Group, a business-research firm in Stamford, Conn.

In this age of electronic identity theft, financial companies should make it as difficult as possible for an ID thief to obtain and misuse your personal information, she said. Internet banks should have multiple layers of security to verify that online customers requesting access to accounts are who they say they are, she said.

“It sounds counterintuitive,” Litan said, “but you want to have some inconvenience when it comes to setting up these accounts.”

I don’t think most online banks are listening to Litan. In my experience, most online savings accounts are very easy and straightforward to open.

In terms of security, the newest trend for online banking seems to be the “security image” or “sitekey” they use to confirm to you that you are actually on the bank’s site. It seems kind of silly, and apparently many online bankers don’t even notice them.

Users of online banking sites tend to bypass critical clues that the integrity of those sites may have been compromised, according to the working draft of a study released on Sunday by researchers at Harvard University and MIT.

The study, which will be formally released in May at the IEEE Symposium on Security and Privacy in Oakland, Calif., underscores how new technologies and warnings can’t completely protect Internet users from scams such as phishing.

It also throws doubt on the effectiveness of site-authentication images, which have been implemented by financial institutions such as Bank of America Corp., Vanguard Group Inc. and ING Bank FSB. The images, selected by the customers, are shown when a bank customer logs in from a different computer than is normally used.

Of all the online banks I use, HSBC’s “Security Key” is the most annoying. It’s a “virtual keyboard” that can only be used by clicking on the buttons — you can’t actually use your keyboard. And in addition to clicking out your security key, you also need to put in your password.…

Top 5 ways the internet can save you money

We all know that the Internet is an amazing resource for finding information and connecting people, but there are plenty of online tools available to help save you money.

As part of ProBlogger’s latest Group Writing Project — this time focused on “Top 5” posts — here are the Top 5 Ways the Internet Can Save You Money.

1. Deals and Comparison Shopping
The ability to search for good and services online opens up a pricing competition to hundreds and thousands of potential sellers. When vendors compete, the consumer wins. No longer are you forced to buy products from the local big-box retailer or the only mom-and-pop shop in your town.

One of my favorite sites for deals and online coupons is DealsPlus, as I mentioned in the 10 More Ways to Immediately Start Saving Money.

2. Freebies!
If you know the right places to look, then you can find plenty of freebies online. I don’t pay for magazines anymore. And craigslist is a haven for freebies and freebie-hunters.

Not quite sure where to start looking for freebies? Check out the 6 deal and freebie feeds I swear by.

3. Online Banking and Online Savings Accounts
The Internet has revolutionized the way that banks handle their customers. Services like online bill pay can help you get organized, cut down on tedious check-writing and save you money from vendors in the process.

Likewise, the rise of online savings accounts from companies like ING have forced brick-and-mortar banks to pony up higher interest rates. (If you’re not familiar with online savings accounts, read up on why you should open one and then which ones are the best to use.)

4. Online Investing
I’m still relatively new to the whole online investing game (having just moved my IRAs into Vanguard), but the Internet has turned the idea of money management on its head. Because companies don’t need to have brick-and-mortar buildings to draw in and sustain an audience, they can offer lower fees for buying into many mutual funds.

But not all online investing is going to save you money. Now that they have the ability to make changes at the click of a button, trigger-happy investors may end up paying large sums in transaction fees. It all depends on how you manage your investing.

5. Personal Finance Bloggers
There are a ton of great personal finance bloggers publishing on the net. Some of my favorite include Get Rich Slowly, My Money Blog and Personal Finance Advice.

If you’re just getting started in your personal finance quest, you’ll find plenty of resources online to help you on your way. If you’re well in to your financial journey, you’ll also find plenty of great resources online. There’s a full range of knowledgeable and friendly PF bloggers who want to help you save and make money.

But even though the Internet is rife with opportunities to save money, there are plenty of easy ways to waste money online. It’s important to balance out the savings with the easy opportunities to spend money frivolously and without regard for necessity.…

How Brick and Mortar Banks ARE Robbing You

During the Super Bowl last night, E-Trade ran a commercial depicting a bank robbery.

The robbers had masks, bags (no dollar signs though) and all the standard jargon (“Lady, don’t be a hero.”).

Except that the robbers weren’t who you would expect. It was the tellers, manager and even the security guard.

Brick and mortar banks are robbing you.

They’re giving you horrible rates of return in their savings account — no where near what an online savings account can offer.

They’re charging you to have an account, even though they’re using your money to make them more money.

They’re charging you more and more fees for things that should (and used to) be free.

They’re requiring you to have a minimum balance to keep your account open.

So why do nearly all of us still use them?

(View the commercial here. Click 3rd Quarter and then E-Trade).…

How Online Savings Accounts Changed My Money Outlook

Before the wife and I started paying bills together (a few months before our wedding), I never really cared much about my money. My parents were still (mostly) helping me out, but once I got a full-time job, I was pretty much on my own.

We started out keeping a budget to track what we spent, which was great. But we didn’t really know how else to make our money worthwhile (besides spend it). Then I met my online savings account.

OK, I jumped a few steps, but after we met with a financial advisor, we were introduced to the little orange ball — ING Direct. A high-yield online savings account sounded great.

I must admit I was a bit skeptical at first, but after adding some money and watching the interest grow, I became obsessed. I would log into my online savings account every morning and at least a few more times each day, just to see the pennies and nickels our money was making. Plus the fact that ING gave us an extra $25 just for the hell of it — who would turn down free money?

Seeing the money work in the online savings account got me out of the mindset that having a lot of money in my checking account was a good thing. After we got married, we had a nice little influx of money in our Bank of America account — which wasn’t doing anything.

I came around to the idea that every penny we take in over a month should be going somewhere — whether it’s to pay our bills, invest in our Roth IRAs or in my 401k, or into the savings account. Money sitting in a checking account isn’t doing anything for you — even if your bank loves you for it.

I’ve just signed up with HSBC, who is offering a 5.05% APY, and plan to move most of our ING money, currently getting 4.35% APY, into there. But the ING referral system is great — once again, free money — so I’ll obviously keep that around.

Basically, when you sign up with ING and deposit $250, you get an extra $25. If you use one of the links in this blog post, I make $10 referring you.

10 Ways to Immediately Start Saving Money

As the wife and I save up for a possible move and, at the same time, I scrounge for money to start-up a business, we’ve been pinching pennies wherever possible. Unfortunately, because of our living situation, we spend a lot of money on rent and other fixed items (IRAs, cable/Internet bills, insurance, etc.).

But we’ve found that it is possible to easily save a lot of money, even if the margins for saving are low. Here’s 10 ways we immediately started saving money.

  1. Keep a budget
    Because we keep a budget, we became much more conscious of how much we are spending. Having a ceiling on how much you can spend on any particular category makes you aware of your spending habits and keeps you from going beyond that.
  2. Stop Going Out to Eat
    We used to allocate $200/month or so to dining out — around 4 meals for the two of us — and would often spend that, if not more.
    Now, at the beginning of the month, we look at the calendar for special occasions — birthdays, holidays, etc. — and pencil in money for meal, and perhaps one more. Eating at home saves a boatload of money.
  3. Cancel Unecessary Bills
    Find your newspaper subscription heading into the recycling bin everyday? Don’t even watch your Netflix movies? Get rid of it, or change your subscription. We were spending $22 a month for Thursday – Friday service; when we went to cancel, we ended up paying $.88 for the Sunday paper, which has …
  4. Coupons are Your Friend
    There’s no reason to be ashamed of using coupons. You spend less money, you save more money.
  5. Use the Library and Other Things You Pay For
    We thought we were saving money by renting movies from the movie store instead of going to the theater. We were, but now we get most of our movies from the library. They’re free, can normally be held for you, and can be kept for longer than most movie store rentals.
    Keep in mind that the library is paid for with your tax dollars. Everyone hates paying taxes, but you since you have to, you may as well enjoy what you pay for.
  6. Cut Out Starbucks, Dunkin’s, etc.
    Is Dunkin’ Donuts or Starbucks a stop on your way to work? Stop going. Make your coffee at home or buy some bagels and keep them in the fridge at work. Assuming you don’t go to Starbucks just to be cool, you won’t miss it — and you’ll cut out one major recurring cost.
  7. Travel Less
    OK, this one does suck a little bit, and sometimes can’t be avoided, but the more you travel, the more you pay in gas. And gas is expensive. But if you’re deciding whether or not to take that daytrip to the outlet malls, well, just think about how far it is and how much sooner you will need to fill up.
  8. Go Outside and Play a Sport
    This is obvious. If your TV and computer are turned off because you’re outside, you’re saving electricity and thus money. Play a sport that only requires a one-time payment for equipment or membership fees.
  9. Open a High-Yield Online Savings Account
    Ever since I opened my ING Direct account, I’ve loved watching the money grow. Even if you only have some money to start it, you’ll want to put more in to make more money. (Shameless plug: If you open an account with this link and $250, you’ll get an additional $25 free, and you’ll make my day.)
  10. Stop Carrying Cash
    I carry no cash in my wallet. Because I use only my debit card, all of my purchases are tracked in my online checking account and I’m much more aware of what I’m spending. I don’t make spur-of-the-moment purchases and I don’t forget to put my spending in my budget.

I hope these work for you as well as they did for me.

Sticking with these ways helped the wife and I save more than $1300 from a bad month to a good month, even when we got stuck with an auto insurance bill and some other must-pays.…