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General
Questions
Why
are banks going online?
What is the difference between
online banking and trading?
How does bank security work?
How can I help protect my own security?
What countries have online banking?
Do all states offer online banking?
What was the first online bank?
What banks offer credit cards?
Which bank is best for me?
Who do I email if I have a question
about...?
Glossary - Getting the Terms Down
What
are ATM rebates?
What is
bill presentment?
What is a browser?
What
are Certificate of Deposit (CDs)?
Who are the
credit bureaus?
What is a
credit rating?
What is a credit
union?
What is data
security?
What is direct
dial banking?
What is encryption?
What is the FDIC?
What are insufficient fund charges?
What
is an Internet bank?
What is a lien?
What is a money
market account?
What is the NCUA?
What is an overdraft?
What is
personal finance software?
What is a
privacy policy, and why is it important?
What does it
mean to refinance?
What is a secured
loan?
What is a sign-up
bonus?
What is a third
party provider?
What is a
unsecured loan?
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Why
are banks going online?
Banks
are going online for three main reasons. First, since so many
banks are going online many banks feel like they will be left
behind and potentially lose customers if they don't also offer
online services. Second, online banking decreases costs. Once
a bank has set up online banking their cost per transaction
averages a few cents. Traditional bank transactions can cost
up to two dollars per transaction. Finally, some banks feel
they can expand their customer base. If a bank is the first
online in their area, they may attract additional customers.
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What
is the difference between online banking and trading?
Online
trading involves stocks or bonds, and your money in these
investment vehicles is not insured by the FDIC. Online banks
also offer investments, but they are usually based on the
banks paying interest to the customer to use their money.
Therefore, returns are often constant or vary little in
comparison to stocks. Some online banks offer online trading,
but by law they must clearly explain the difference between
them.
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How
does bank security work?
Understanding
bank security can be difficult. Click
here for more details.
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How
can I help protect my own security?
We
have a page that lists 18
separate steps you can take to protect your security.
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What
countries have online banking?
Currently,
over 60 countries have at least one online bank in them, and
all six populated continents have online banks. You can find
them all in our international
section.
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Do
all states offer online banking?
Yes,
every state and the District of Columbia has online banking.
Some states only have a few banks with online services and
others have more than a hundred. They can be viewed in our
states section.
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What
was the first online bank?
In
May of 1995, Wells Fargo began offering its customers the
option to view their account information, including account
totals and transactions. The first fully functional Internet
bank was Security First Network Bank which became functional
in October 1995.
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What
banks offer credit cards?
Most
banks offer credit cards, and many cards can be applied for
online at the bank's own site. If you want additional information
on credit cards, we recommend you view
our bank credit card section.
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Which
bank is best for me?
Consider
using our How to Choose
an Online Bank page.
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Who
do I email if I have a question about...?
If
you have a question about this site, please visit our contact
page. For questions regarding a particular bank, it is
best to contact that bank directly.
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ATM
rebates
Most
banks that offer ATM rebates don't charge you to access the
ATM, but the bank who owns the ATM that you use to withdrawal
cash will likely charge you some fee. ATM rebates are cash
that is deposited in your account to cover that ATM charge.
Some banks offer a set amount for each ATM withdrawal (example:
$1.50), and some banks cover any charge up to a certain amount.
Almost all banks that offer ATM rebates have a limit on the
number given per month. Be aware that many banks don't offer
rebates so read their policies carefully. |
Bill
presentment
An
online system that allows customers to receive and view bills
on a computer, and pay the bill electronically. Some billers
accept electronic payment of debts. Other banks issue checks
and send them via the mail. An example of a bill presentment
site is PayTrust. |
Browser
The
software program that you use to view the Internet. The two
most popular browsers are Internet Explorer and Netscape Communicator.
When banking online your browser allows access to the banks
web site, just as you are accessing this page with your browser.
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Certificate
of deposit
A
formal receipt for funds left with a bank as a special deposit.
Such deposits may bear interest, in which case they are payable
at a definite date in the future or after a specified minimum
notice of withdrawal, or they may be non-interest-bearing,
in which case they may be payable on demand or at a future
date. These deposits are payable only upon surrender of the
formal receipt properly endorsed. |
Credit
bureaus
An agency that collects and distributes credit histories of
individuals and businesses. The three main credit bureaus
are Equifax, Experian, and Trans Union. |
Credit
rating
A formal evaluation of an individual's credit history based
on employment, credit, and financial information. It is often
composed and evaluated by banks and credit cards companies
before extending credit to an individual. |
Credit
union
Offering all the services of a bank, these cooperative organizations
are chartered by a state or the federal government. Credit
unions get their capital from their members and makes loans
to their members. Credit unions are not-for-profit, member-driven
organizations that many people believe offer better customer
service than banks. Credit unions are often formed around
a particular profession or company (e.g. construction workers,
or employees of company XYZ). |
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Data
security
The procedures and practices used to protect sensitive information
on computer networks and servers. Online banks devote considerable
resources to data security in order to protect consumer
information. Only by ensuring the security of data can they
continue to operate and attract consumers.
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Direct
dial banking
Not commonly used in the US, direct dial banking requires
dialing a specific phone number to connect to a bank's online
system. |
Encryption
Allows for the transfer of information securely between your
computer and the bank's computer. Information is scrambled
at your computer and sent to the bank where it is decoded,
and vice versa. The maximum level of encryption used by online
banks in the United States is 128 bits, but with better technology
the level of encryption will increase. |
Federal
Deposit Insurance Corporation (FDIC)
"FDIC insured" is a common catch phrase for banks. Created
in 1933 in order to restore public confidence in the nation's
banking system, the FDIC insures that customers will have
their money protected against loss even if the bank is no
longer solvent. Each depositor is insured to $100,000. To
find out if your bank is FDIC insured click
here. |
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Insufficient
fund charges
A fee assessed to a banking customer who does not have adequate
funds to cover a transaction against a checking account.
This charge is also know as an overdraft charge.
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Internet
bank
A bank that exists only on the Internet without any physical
branches. These banks are usually able to offer better rates
of returns on CDs, money market and checking accounts because
they lack overhead expenses on physical branches. While many
traditional banks offer online banking, Internet banks only
exist on the Internet. |
Lien
A legal claim or attachment filed on record against property
as security for payment of an obligation. A lien insures that
the lender will take possession of the property in the case
of a consumer default. |
Money
market account
An open-end
mutual fund which invests only in money markets. Only those
administered by banks are FDIC-insured. Others are privately
insured. |
National
Credit Union Administration
What the FDIC is to banks, the NCUA is to credit unions. The
NCUA insures money deposited in credit unions. Not all credit
unions are insured by the NCUA, so check the NCUA
web site before you decide to join a credit union. |
Overdraft
The amount by which a debit or charge against an account exceeds
the balance of the trust account. Some banks offer overdraft
protection in which the bank extends credit to the consumer
to cover any excess charges to an account. |
Personal
finance software
This software is installed on your computer just like any
other software and does not require online banking services.
The software can be use as accounting software to balance
a check book, track savings and investments, and for other
basic financial bookkeeping functions. Some online banks offer
convenient ways to sync the program with your online bank
account. The two most used personal finance software programs
are Quicken and Microsoft Money. |
Privacy
Policy
A statement by a web site and/or institution that outlines
how they collect information, what information they collect,
and how they use this information. Because you give a considerable
amount of personal information to your bank, it is important
that you are aware of what they do with it. You can read this
site's privacy policy. |
Refinancing
The repayment of a debt from the proceeds of new borrowings.
This is often done when one has solid credit or collateral
which allows him or her to take another loan with better terms
and pay off an existing loan. |
Secured
loan
A loan against which a tangible asset has been pledged in
case of default on the loan. |
Sign-up
Bonus
Customers are money for online banks. With thousand of banks
offering online services and dozens of Internet banks competing
to get consumers to sign-up with them, some banks offer a
cash bonus for signing-up for and funding an account. This
bonus is small when compared to the importance of choosing
an online bank. If you find a bank that you like, sign-up
with them. If they offer you a bonus, all the better, but
don't let it be the major reason for signing-up. |
Third
party provider
The first banks on the Internet had to spend millions of dollars
to implement their online banking programs, but today even
community banks can offer online banking by partnering with
third party providers. The majority of online banks were initially
created by third party providers. These third party contractors
actually increase security because they have implemented online
banking many times previously and are familiar with various
security and technology issues. |
Unsecured
loan
Funds loaned with no pledge of collateral. The yield is the
percentage rate of return on capital for a given period, often
figured in terms of a year and calculated by dividing annual
return by the amount of an investment. |
