Wednesday, May 27, 2009

If You can Read this Blog Online then You can Bank Online Too

If You can Read this Blog Online then You can Bank Online Too
by Hassan Nicholas

OK, maybe it's not an original title but you get the point. Banking online is quickly becoming a regular fixture in the way many people handle their money. It is said that half of people online use online banking. So, why make the move from brick and mortar to mouse and keyboard? Well, these are my own reasons why I have two accounts (savings and checkings) with ING Direct:

  1. I'm trying to beat inflation the best I can. Since online banks cut costs by not having physical branches and the salaries to staff them they can offer more in terms of interest. When I first openeng up my Orange Savings account my APR was floating around 3.5% (it's since dropped). Considering I was earning less than 0.5% in my WaMu account it seemed like a no-brainer.
  2. Forces to me to wait before I buy. Unlike my AFTRA-SAG Federal Credit Union I can't walk up to a ING branch or ATM and deposit a check. I have to make the deposit in a checking account that's linked to my online bank and transfer the money that way. This process, though very simple, takes between 2 - 3 business days to complete. Which means if I want to use that card to purchase something I have 2 - 3 business days to think whether I really need that purchase.
  3. It's easy to save. With online banking I can set up an automatic savings plan that's linked to my brick and mortar bank. Right now I have a certain amount automatically deducted every week from my credit union checking account that goes to my online savings and checking accounts. You can pick a small amount that you wouldn't notice, $5 - $10 a week, that goes into your account. If you're like me, you'll forget that you'll even have this account and be suprised one day when you realize how much savings you've accumulated.
  4. I can manage my money better. Online bank accounts are so easy to set up (you can even set up multiple accounts under your name) and they can prove an effective money management tool. For instance, I use my ING account as a "fun" card. I give myself an allowance every week of how much money I will transfer to my online checking account. Whenever I go out for leisure I use this card and this card only. What it does is prevent me from spending over a certain amount every week and month. You can open up an account and make your own "fun" card too. Or maybe have one for vacations or to put monthly allowances on for your children. The possibilities are endless...
  5. Oh and don't forget the fees. Well, maybe you can because 80% of online banks don't have any fees. There was no minimum to open my account nor is there a monthly minimum I must maintain. And this goes for both my checking and savings account.
Here are some other online banks you can use (do your homework though, some might be more appropriate then others for your circumstances and goals).

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