Online Banking

What is online banking?

Online banking, or internet banking, is a service that enables an account holder to obtain account information and manage certain banking transactions over the internet through a bank's secure website. In most cases a web browser is used and any normal internet connection is adequate.

Online banking can be used for personal or business banking, however the terms and conditions will vary.

The number of customers who choose online banking as the preferred method of dealing with their finances is growing rapidly due to the increased convenience it offers and the range of features for managing accounts and paying bills.

Financial institutions offer incentives such as lower bank fees to encourage online customers. There are also a number of banks that operate exclusively online and offer high-interest savings accounts or specialised services.

Managing your access

Although a home or office computer and internet connection is not necessarily required for online banking, for security reasons, it's recommended. If you're using a public computer, for example in a library or internet cafe, make sure you log out completely from your banking service before leaving the terminal.

Security

Online banking sites are secure sites that encrypt data and require a password for entry. If you are unsure about the security of your banking site, ask your financial institution for more information about their strategies for protecting your information and preventing fraud.

It's important to remember that email appearing to come from your financial institution requesting verification of account details is almost certainly fraudulent. This attempt to gain personal information for the purpose of identity theft is called 'phishing'. If in doubt, phone your institution to check on the truthfulness of the email.

Software

In comparison to personal banking, business banking may incur a fee and require the installation of specialist software. These systems may then enable your business to download statements or set up payment batches. There may be additional security measures in place for business transactions compared with the systems used for personal banking. Visit the business banking section of your institution's website to find out what is required.

Services

Each financial institution will offer a distinct set of services with terms of use. The following features are often available online:

• view a snapshot all your accounts at the institution
• view your last 100 days worth of transactions in detail for any account
• retrieve and print any statement issued in the last 12 months
• arrange for authorised users, such as your accountant or office manager, to have 'transaction' or 'view only' access to your accounts
• link your personal and business accounts together under the one sign-in
• transfer money between your own accounts
• schedule automatic and periodic payments such as rent or loan repayments
• transfer funds to an account at another financial institution, locally or internationally
• export account information into finance software, such as Excel spreadsheets, Quicken, Microsoft Money or MYOB
• make payments directly to the Australian Tax Office
• import payroll and creditor payments from your financial management software
• set up a list of people and recurring payments and create payment templates
• make payments from accounts requiring more than one signature

Online payments

Paying suppliers or receiving payment via the internet can save on bank fees, eliminate the need to write cheques and enable you to complete transactions without visiting the bank.

However, you will need to collect the bank details from the relevant clients and spend time setting up the options within your online bank account. The payment is optimally executed electronically in real time, though some financial institutions or payment services will wait until the next business day to send out the payment.

The bank can usually also generate and mail a paper cheque to a creditor who is not set up to receive electronic payments.