Why online banking is better? The pros and cons of online banking.

Online banking

Banking that you do online through the internet is referred to as online banking.

There are ways to do online banking.

It can be accessed through the bank website or with banking applications such as SBI YONO, Mobile of ICICI, Axis Mobile of Axis Bank, and the like.

Non-financial institutions such as Paytm, GooglePay, and Phonepe are also offering online payment services through the UPI platform. 

These modes of payment fall under online banking or digital banking, which are quite effective and handy when it comes to small payments such as utility bills and groceries.

What is online banking?

Online banking is nothing but banking that you do through internet connectivity. It can be internet banking/net banking, mobile banking, or any other app that enables online transactions. 

Banks provide the facility to the account holder. It can be a savings bank account or a current account. Online banking enables you to access your account and transact funds with ease. 

It’s available 24/7 throughout the year. In countries such as the United States and European countries, Internet banking has been popular for a long time.

In India, it came quite late. The service gained popularity by the end of 2008, though it was introduced prior to 2008.

As per the Ministry of Electronics & IT, Govt. of India, there were 45 million active online banking users in 2017, which surpassed the 150 million mark by 2020.

The sudden spurt in the number of online banking users is mainly attributed to the easy accessibility of internet connectivity. Smartphones are a big factor that enables every household to access their account at a go.

How to Access Online Banking?

There are several ways to do online banking. This type of banking includes

  • Mobile Banking
  • Internet Banking
  • Online card payment system
  • Financial Applications such as Paytm, Google Pay, UPI payments, PhonePe, etc.

What we understand is that there are lots of ways to do online banking. First of all, banks provide the facility along with the account that you have. Second is the alternative mobile apps mentioned above.

Either way, it is super easy to access a bank account online. 

How to use Online Banking? 

Using online banking such as the bank’s internet banking, mobile banking, and other mobile apps, is easy to execute. 

All you need is an active account, and you should have good internet connectivity. 

You can use it on your laptop or smartphone. Online banking applications are available on the Google Play Store. 

Install the app on your smartphone and register right away. To learn more about online banking, refer to the bank’s official website. 

The best banks with well-established internet banking are the State Bank of India, ICICI and HDFC Bank Ltd

It’s seen that the State Bank of India has a facility in the name of SBI YONO. HDFC Bank and ICICI Bank also have user-friendly net banking facilities. 

Why Online Banking is better than Offline?

It is way better than traditional banking. It all comes down to ease of use and accessibility. 

People want things to be easy and accessible, in addition to being effective. Online banking is one such thing that delivers all of it. 

With online banking, you can see how effortlessly you can deal with your finances. It simplifies our daily financial needs. From paying utility bills to third-party fund transfers. 

All sorts of transactions are available online, and most banks do not levy charges on these transactions. Whereas if you do these transactions at the bank branch, you might be charged.

Online banking does save you valuable time. You may be able to have more control over financial matters.

Be it an investment or paying someone else. You will be able to do it on time. 

With an online banking facility, you do not need to visit your bank anymore. Sometimes banks may contact you for certain reasons, such as KYC updates Or some other specific reasons. 

That’s fine, once in a while, visiting the bank is also required. But the fact is, using online banking would save you time, money, and energy, and you would get control of your personal finances. 

Facilities of Online Banking

There are several things you can do with online banking. The facilities keep increasing. 

Mentioned below are some of the important financial transactions you can perform online. 

Facilities of Online Transactions
Intra-bank fund transfer, between branches of the same bank. 
Interbank fund transfers such as NEFT, RTGS or IMPS. It would be a fund transfer to other banks. 
Draft purchase and order chequebook. 
Transfer of accounts to a new branch. 
Avail of personal loans. Loans against FDs and other personal loans can be applied for.
Purchase of goods and utility bill payments.
Download pension slips. 
Enrolling in insurance and paying policy premiums. Investment in mutual funds and other insurance, such as life insurance and general insurance. 
Mobile number change and activation of SMS alert. 
Getting interest certificates for loans and deposits. 
Opening of Savings bank accounts and other deposit accounts such as PPF accounts, FDs, and RDs. 
Apply for a credit card and an ATM debit card. Activation of the card with green PIN generation. 
Download the statement of account and inquire about transactions. 
Income tax payment and ITR filing. 
Other miscellaneous facilities such as mobile recharge, TV recharge, UPI and Bhim payments, and QR codes are also available. 

The above facilities are among the few. What you can do with online banking is huge. You can do whatever you want that is finance-related. 

The Advantages and Disadvantages of Online Banking

There are always flaws in every good thing that we have. Likewise, online banking has its own drawbacks, which one needs to understand.

But, its benefits outweigh the drawbacks because of the online banking delivery system and its accessibility.

Here are some of the pros and cons of using online banking services. 

The Pros of Using Online BankingThe Cons of Using Online Banking
1. Online banking is easy to register for. 1. Online banking depends on your internet connectivity. No network, no online banking. 
2. Ease of use is great. Accessible to anyone. 2. Sometimes technical glitches might arise that affect your transactions. 
3. Banks charge less or no charge on various transactions. 3. Chances of online fraud are on the rise. 
4. Save time, money, and energy. 4. Password management is required. Few people face problems. 
5. You can have full control of your bank account. 5. The Password is required to be changed at regular intervals. This means you have to spend some time managing it. 
6. Low cost of transactions. If you visit the bank to do the task, it might cost you more. 6. Compromising data due to improper use of accounts leads to financial loss. 
7. You can do any type of fund transfer in seconds. There is no need to stand in a long line.7. Sometimes forgotten password recovery is a hard process when an account is defunct. As such, a branch visit is a must. 
8. Available 24/7 throughout the year. You can do transactions even on holidays. 8. Only a limited amount of funds can be transacted. Personal banking transactions are capped at ₹ 10 lacs per day in most banks. 
9. Utility bills and various other daily payments are on the go. Payments take effect immediately. 9. Lack of personal relationships.
9. A good and reliable complaint mechanism. Disputed transactions are settled online as well as offline.10. Only a handful of banks offer seamless online banking services. You may find that some banks offer limited transaction facilities.

Registering Online Banking is the Right Choice. 

It would be the right choice. As its pros outweigh its cons, it is better to use online banking. 

However, using online services provided by the bank should be preferred over third-party apps such as Paytm, PhonePe etc. 

They are great alternatives and your task will be done seamlessly. No doubt about it.

The problem is the settlement of disputed transactions and the integrity of your financial details. In bad times, you might wonder, Why on earth do you use these apps?

The best to use is the bank’s Internet banking facility. Either using the bank’s online banking platform or through reliable bank mobile applications.

Popular banks such as the State Bank of India, HDFC Bank, and ICICI Bank Ltd. have some of the best Internet Banking platforms. 

Both web-based and mobile applications, their online banking platforms, function seamlessly with great functionalities. 

Not to mention the offers and discounts users get when using online banking services. But consumers don’t get these offers if they otherwise rely on traditional banking.

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7 thoughts on “Why online banking is better? The pros and cons of online banking.”

  1. It’s difficult to find well-informed people for this subject,but you sound like you know what you’re talking about!Thanks

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