Home banking is a form of banking that allows you to perform many financial transactions literally from the comfort of your own home. However, the term can be misleading because home banking is not solely limited to your home. If you have access to the internet or a telephone, home banking puts your bank-account information at your fingertips anywhere, at any time. Banking by mail is also a form of home banking.
Technology continues to touch nearly every aspect of our lives every day, and banking is no exception. That’s why understanding the many different aspects of home banking and how it works can help you make the right decision for your financial needs.
Definition and Examples of Home Banking
Home banking refers to the process of accessing banking services without needing to visit a physical branch location in person. Home banking lets you conveniently manage many of your personal finances remotely. It allows you to perform various financial transactions, often with the click of a button via the web, mobile app, or telephone.
This type of on-the-go banking gives you the opportunity to bank from your home, office, or anywhere you have a secure phone or internet connection. In addition, home banking provides you with direct access to all of your bank-account information, so you can do practically everything with your account that a bank teller can do, or more.
- Alternate names: Online (electronic or internet) banking, telephone banking, mobile banking
An example of home banking is when you view your account balance on your cellphone’s bank app, or schedule a transfer between accounts from your laptop.
Home-banking transactions can generally be conducted 24/7, regardless of banking hours or if it’s a legal holiday.
How Home Banking Works
While home banking may change how you bank, it does not change the fundamentals of banking itself. That means you still need a bank account with a financial institution to access home-banking features. However, home banking offers a more convenient alternative to branch banking.
Due to the “anytime, anyplace” nature of home banking, you’re able to perform transactions and access banking services faster to meet your financial needs.
To get started with home banking, first make sure your bank or credit union account is eligible for internet banking. Also, you’ll need access to the internet, a telephone, or your mailbox to carry out transactions.
Since most home-banking services can be done online or through your financial institution’s mobile app, some of the features include:
- Checking your account balance anytime
- Viewing your deposits and pending charges
- Setting up notifications and account alerts if your balance falls below a certain level
- Transferring money between accounts
- Paying bills online or through a mobile app
Having access to home-banking services can help you stay on top of your finances. For example, suppose you checked your account balance online and noticed that your funds would not cover all of your expenses. In that case, you could immediately transfer funds from another account to prevent overdraft charges, also using home-banking services.
Home banking is a secure and convenient way to gain direct access to your bank accounts. Plus, it’s generally free to use.
Types of Home Banking
Although its name signifies a tie to banking at home, there are actually a number of ways home baking can be administered.
Online banking gives you the ability to handle your finances from the comfort of home. You can also complete transactions remotely anywhere at any time, as long as you have an eligible account and secure access to the internet.
Mobile banking involves using your mobile phone to access your bank-account information. You can access the information through your bank’s web page, text messaging, or by downloading its app.
Banking by Mail
Banking by mail is a service that offers you the ability to mail deposits, payments, and information directly to your bank or credit union. You also have the option to receive a receipt for your transaction by mail.
Generally, this refers to using a telephone to contact your financial institution. Similarly, telephone banking can also be used to conduct transactions using an automated system, such as checking your account balance, transferring funds, and determining if transactions or checks have cleared.
Pros and Cons of Home Banking
Real-time money management
Often offered as a free service
Increased difficulty reaching customer service
Risk of security breaches
- Real-time money management: Home-banking technologies can present a faster and easier way to access financial services, track your spending, and manage your finances.
- Greater convenience: Home banking allows the ability to accomplish tasks on the go, which offers greater convenience for customers.
- Often offered as a free service: Home banking is provided by many financial institutions as a free service to customers.
- Increased difficulty reaching customer service: When consumers use home-banking services, it may be more difficult to access customer service if there is a discrepancy or something goes wrong.
- Risk of security breaches: Home banking can present privacy or security concerns when consumers use mobile devices to conduct their financial transactions.
Banks are required legally to send you a copy of their privacy policies and regulations annually. You may also request a copy if needed.
Requirements for Home Banking
To access your financial institution’s mobile or online home-banking features, there are few basic steps you’ll need to take:
- Start by gathering your account number from your bank statement or deposit slip
- Locate your bank or credit union’s website, or download the mobile app
- Register by creating an online account with your financial institution and set up passwords for security purposes
- Log in and take the tutorial provided by your financial institution
Once your online account is active, you’ll be able to use your devices to perform many of your regular banking transactions, such as transferring money, monitoring your transactions, and checking your account balance.
You should only use secure websites, apps, and hardware for home-banking services. Go through the financial institution’s website and not through a link sent by someone else. Also, when using free or public Wi-Fi, try to use a private network and go to a secure site that begins with https.
Is Home Banking Worth It?
Choosing the right bank or credit union is an essential step toward meeting your financial needs. If convenience and easy access to your financial information is important to you, you’ll want to ensure your chosen bank or credit union offers some form of home banking. Another key factor to keep in mind is that some financial institutions offer reduced fees when you conduct all your banking online.
- Home banking allows you to access banking services remotely, offering you convenience and 24/7 access to your financial information.
- Home banking provides the ability to perform your financial transactions without visiting a physical branch.
- Types of home-banking services include online, telephone, mobile, and mail.