Also known as internet or mobile banking, electronic banking is a popular service that is used and enjoyed by millions. Electronic banking gives people access to their accounts and their money at all times. Accessing e-banking is easy from a laptop or desktop computer, but a lot of people access their accounts directly from their smartphones. Online and mobile banking bring all your account data together so you can manage your money at any time, from any place.
Benefits of Electronic Banking
Most major banks have some form of electronic banking to make things easier for their account holders. Transactions that are commonly handled in the branch can easily be taken care of on the web or via a mobile app. Banking customers can monitor account balances, view monthly statements, keep track of transactions that are cleared or pending, and easily make transfers to and from any linked savings or credit accounts. You’ll never have to balance a cheque book again.
Additionally, account holders can use electronic banking to set and update their account preferences. Customers can opt to have statements and other notices delivered electronically, which saves paper and postage.
Automate Your Savings
One of the best things about electronic and mobile banking is the ability to automate savings. It’s been proven time and again that automating your savings can help you save more money over time. Creating an automatic, recurring transfer from a chequing account to a savings account is easy, and you can tailor your savings goals to your budget. Even if you only save a few dollars per week, creating an automatic savings plan takes the guesswork—and all the effort—out of savings.
An automatic savings account allows you to:
Reach savings goals faster: Whether you want to save for something specific like a home or car, or you just want to build your emergency fund, automating your savings will help you achieve your goal faster. Many people only save whatever’s left at the end of the month—that is, if they remember to save at all. Building up a savings account this way can take a long time, because the deposits are inconsistent and unpredictable. Some months you might not be able to make a deposit, and during others, you may simply forget and spend the money you would have otherwise saved. With automated savings, you won’t have the chance to spend the money at all, because it comes out of your account like clockwork. In addition, you’ll never forget to make deposits. The whole process is automated, so there’s nothing for you to remember.
Pay off debt faster: Similarly, if you dedicate your savings to paying down debt, you may be able to pay off your debt faster than you would if you were making manual payments here and there. The same principle applies—the money will be automatically routed to your savings account before you have a chance to spend it, and you don’t need to remember to do anything.
Save time: Automating your savings eliminates the constant worry over when and how much to save. It’s truly a “set it and forget it” service, requiring minimal input from you. In addition, with regular, consistent deposits, you can easily calculate how long it will take you to save a specific amount, which takes some of the guesswork out of savings.
If you’re worried that automatic savings will leave you with less money to spend, there are a few things to keep in mind. For one, you don’t have to save a large amount every month—every little bit helps. Look at your budget and see what you can afford. In addition, remember that many of us fall into the trap of spending money simply because we can, not because we really want or need what we’re purchasing. Impulse buys fall into this category. If you struggle with impulsive spending, automated savings may be just what you need to reach your financial goals.
If you already have a chequing account with your bank but no savings account, it’s typically easy to open one. Check with your financial institution to see which savings account options are available and the requirements for each. Always ask what fees are included and check to see if any service fees are waived when you have two linked accounts at the same bank. Once you open a savings account, link it to your chequing account to make transfers and automatic deposits.
Is Electronic Banking Right for You?
The advantages of using electronic banking are numerous, but one of the most significant is the ability to access your account anywhere there’s an internet connection. Electronic banking gives you control of your money like never before and can make a big difference when you’re trying to reach savings goals. Although most electronic banking interfaces have robust functionality, some only offer basic functions like viewing account balances and statements, so for some people, e-banking is not a comprehensive solution.
Some drawbacks of electronic banking include:
Data security risks: Accessing any information over the internet comes with a certain level of risk. While banks take information security very seriously, no electronic banking platform is completely immune to hackers.
Mobile devices are not as secure: Checking your banking information from a mobile device also poses certain risks. Like computers, mobile phones can be infected with malware designed to steal customers’ account information and passwords. Mobile banking users may also be vulnerable to phishing attempts via SMS text. Many people know not to click suspicious links in emails from unknown senders, but fewer people are aware that phishing attacks can also be carried out via text.
Still, even with the risks, the benefits of online and mobile banking are clear. E-banking frees you from the need to visit a physical bank, gives you greater control over your money, and can help you reach your savings goals more quickly. If you haven’t tried banking this way, contact your bank to get started.