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

Banking that you do online through the internet is referred to as online banking. There are ways of doing online banking but normally it is done through the bank website or with banking applications such as YONO. 

Non-financial institutes such as Paytm, Googlepay, phonepe are also giving online payment services through the UPI platform. 

These modes of payment also come under online banking other than the traditional fund deposit and transfer payment system. 

Online banking

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 at your ease. 

It’s available 24/7 throughout the year. In western countries such as the United States and European countries, internet banking is quite popular for a long back. 

In India, it came quite late. The service got its 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 contributed due to the easy accessibility of internet connectivity. Smartphones are a big factor that enables every household to access their account in a go.

Online banking includes…

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 means 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 it? 

Using online banking such as bank’s internet banking, mobile banking and other mobile apps are 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 in the google playstore. 

Install the app on your smartphone and register right away. To know more about online banking refer 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 are also having a user-friendly net banking facility. 

Why online banking is better than the traditional one?

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 besides their effectiveness. Online banking is such a thing that delivers all of it. 

With online banking, it can be seen how effective digital banking is. 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 updation 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 get control of your personal finance. 

Facilities of online banking

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

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

Facilities of Online Transaction
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. 
Purchase item goods and utility bills payment. 
Download pension slips. 
Enrolling insurance and payment of 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 of loans and deposits. 
Opening of Savings bank account and other deposit accounts such as PPF accounts, FDs and RDs. 
Apply credit card and ATM debit card. Activation of card with green PIN generation. 
Download statement of account and enquiry related to 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 which is finance related. 

The pros and cons of Online Banking…

There are always flaws in every good thing that we have. Likewise, online banking has its flaws which one needs to address quite delicately. 

Listed below are some of the few pros and cons of online banking. 

Online banking is easy to register for. Online banking depends on your internet connectivity. No network no online banking. 
Ease of use is great. Accessible to anyone. Sometimes technical glitches might arise which affect your transactions. 
Banks charge less to no charge on various transactions. Chances of online fraud are on the rise. 
Save time, money and energy. Password management is required. Few people face problems. 
You can have full control of your bank account. Password is required to be changed at regular intervals. This means you have to spend some time managing it. 
Low cost of transactions. If you visit the bank to do the task it might cost you more. Compromising data due to improper use of accounts leads to financial loss. 
Can do any type of fund transfer in seconds. No need to wait in a long queue. Sometimes forgotten password recovery is a hard process when an account is defunct. As such branch visit is a must. 
Available 24/7 throughout the year. You can do transactions even on holidays. Only a limited amount of funds can be transacted. Personal banking transaction is capped at ₹ 10 lacs per day in most bank. 
Utility bills and various other daily payment is on a go. Payments effect immediately.  
Password secured with double authentication factors along with OTP authentication for each transaction.  

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. 

But using online services provided by the bank should be preferred other than third-party apps such as Paytm, phonpe etc. 

The best to use is the bank’s internet banking. Popular banks such as the State Bank of India, HDFC Bank, and ICICI Bank Ltd. has one of the best internet banking platforms. 

Both webs based or mobile applications, their online banking platforms function seamlessly with great functionalities. 

Not to mention the offers users get whereas not using it might not get the opportunities. 

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