What is Internet Banking ?

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An internet bank — also known as a virtual bank, an online bank, or a web bank — is a bank that lacks any physical branch locations and exists only on the internet. By eliminating the overhead costs associated with bank branches, internet banks consistently offer interest rates, including money market yields, that are higher than the national average.

Internet banks are accessed via web browsers and mobile apps, providing customers with banking services from any place with access to the internet.

Internet banks generally do not offer their own ATM services, although they often work with other banks and organizations to provide no-fee or low-fee ATM access for their customers.

The biggest strength of an internet bank is also its greatest weakness: If internet access is spotty or lacking, customers cannot access their accounts. In addition, there are security issues to keep in mind. x

The biggest strength of an internet bank is also its greatest weakness: If internet access is spotty or lacking, customers cannot access their accounts.

In addition, there are security issues to keep in mind. Accessing one’s internet bank account via an unfamiliar or unsecured public Wi-Fi hotspot carries a certain level of risk, and there is the ever-present threat of hackers taking down an internet bank’s website.

Nearly all traditional banks offer online banking services that are very similar or indistinguishable from internet bank services.

This helps regular banks provide banking services beyond the footprint of their physical branch network.

If you use a bank that is accessible online and doesn’t have a physical branch in your area, you are using an internet bank.

Some popular internet banks include Discover Bank and Synchrony Bank, which both utilize extensive online networks and are accessible by web and phone only.

Are you puzzled by internet banking? Here are some of the biggest online banking myths debunked.

Apply for loans: Loans are a “paperwork” intensive process. But they don’t have to be. Type in your information, which will speed the process of checking your credit, and your bank will get back to you with an answer. Some lenders operate entirely online, and they can make almost-instant lending decisions.

Transfer funds: Need to move money from your checking account to your savings account?

How about putting extra cash into a certificate of deposit (CD) or opening a brand-new CD? You don’t need to visit a branch or wait on hold to get those things done.

You can even link bank accounts at different banks and zap money back and forth.

Apply for loans: Loans are a “paperwork” intensive process.

But they don’t have to be. Type in your information, which will speed the process of checking your credit, and your bank will get back to you with an answer.

Some lenders operate entirely online, and they can make almost-instant lending decisions.

Get good rates: Online banks are known for competitive rates. In theory, you should be able to earn more in online savings accounts and pay lower interest rates on loans.

It’s always a good idea to shop around and compare online banking rates to traditional rates, but you’ll almost always do better online.

Some brick-and-mortar banks offer online-only options.

To use those accounts, you’ll have to give up your paper statements (which you might prefer anyway) and the ability to bank with a teller.

Deposit checks: When somebody pays you with a check, there are several ways to deposit it. The fastest and easiest option is to use remote check deposit:

Snap a photo of the check and submit it to your bank for payment. There’s no need to visit a branch or mail the check in. For more details, learn how to deposit checks with your mobile device.