Online Banks
85Online banking in the USA - an independent review
Despite initial skepticism, online banks are here to stay. All of the major bricks-and-mortar banks have online versions for personal and business customer accounts and several online-only banks have emerged in recent years. While the online banks appear to offer the same advantages such as the ability to manage bills, see checks and transfer funds from other sources, there are significant differences between them. And if you’re thinking about dipping your motherboard into the electronic fiscal waters, there are several options to consider before making your choice.
Citibank Identity Theft Commercial
Five major online banks in the USA
www.wellsfargo.com
Wellsfargo.com is the biggest of the US internet bankers and established their site in 1997. Their current home page looks confident, and they offer the usual range of services, including the ability to see your balance, transfer funds from other accounts and to see checks. A recent addition, adopted by all the major online banks, concerns banking through a designated cell phone. Wellsfargo.com offers an integrated and streamlined package, permitting the user to access account and funding information, as well as perform transfers and pay bills.
Crucially, wellsfargo.com require a minimum balance of $5000 to qualify for free banking with their Bill Pay online banking, otherwise they charge $6.95 a month. They also make a small charge where money is transferred from Microsoft Money and Quicken®, but most online banks operate a similar policy. The wellsfargo.com home page looks clean, confident and inviting, permitting a wide range of operations from this introductory page. Some online banks specify certain PC and browser configurations but wellsfargo.com offers a comprehensive listing of browser configurations, including Windows and Macintosh, Internet Explorer, Netscape, Firefox and Safari.
Realizing the competition is extremely active, Wellsfargo.com have an aggressive customer campaign which irritates one of their customers, who received a phone call recently. "They called the other day and asked me to take a phone survey, noting I had bought something in a specific shop at the mall with my debit card" said Laura from Oregon, a photographer and composer. "I refused to take their survey and felt uncomfortable about them using my shopping habits".
www.bankofamerica.com
This website was first established in 1998 and has since built up a considerable customer base. They are one of the few banks to offer genuine free banking online, with no hidden charges. One of their strengths is security protocol, a crucial element in attracting and maintaining online users. One very useful tool in the war against hackers is Safe Pass, an additional security code sent via cellphone to allow extra security when accessing your account. Family Nurse Practitioner Jean from Texas is a convert to bankofamerica.com's online services and finds it extremely useful. She says "I had an existing account with Bank of America for years, so when they started on-line banking my husband set it up, and encouraged me to start paying bills online. I balked initially, but eventually got the hang of it, now I love it and hate to write out and hand mail anything." Apart from the convenience of banking from home, Jean loves the money saved in avoiding a lengthy trip to her local branch. Remote online banking is so convenient and saves her time and money - "I save a postage stamp for each bill I pay on line, which is a bonus!", she enthusiastically states. The bank's security measures also receive praise from Jean: "We have a site key which is a personal picture that we label. It does take a little extra time to finally get down to business with the added security feature of the "site key", but it is well worth it." Another very satisfied bankofamerica.com customer is Environmental Consultant Cynthia from Massachusetts. She also finds the site extremely useful, stating that the "convenience means quite a lot to me - I can easily manage moneys between accounts no matter where I am in the world. With lots of international travel, this aspect really makes my life easier."
While the bankofamerica.com's website appearance looks attractive, one cannot say the same for their online demonstrations. These feature a video clip of a lady who lists the main features of the bank, hardly a very interactive experience (and especially when compared to some of the other online banks). The bank does offer 24-7 telephone support. One very useful feature offered by other banks, but missing in the Bankofamerica.com's online features, is the ability to see a check.
Another missing feature is the ability to transfer money from other banks; for potential customers who exploit a variety of other banks and accounts, this might be an important issue.
www.citibank.com
The longest-established of the online banks is www.citibank.com, according to waybackmachine.com's listing from December 1996. Their site has come a long way in almost ten years (see comparative pictures) and the bank offers a wide range of services. However, while their current home page is probably the best designed of the online banks discussed, you do need to maintain a healthy balance in your checking account (mininum balance of $1500) or get charged for transactions and administrative services (online savings accounts are free). They do offer an accompanying cash card and very good customer services; it is also easy and free to transfer money from non-citibank accounts. Be warned that they charge a fee if your ATM card is used in other bank's ATM machines.
The bank is one of a few offering a rewards scheme where customers gain points for cash prizes, gift cards and merchandise.
www.wachovia.com
Although www.citibank.com is listed as the longest established online banking site, www.wachovia.com is listed by waybackmachine only a few days later on 29 December 1996. They offer the same type of services found in their competitor's websites and also strongly feature their telephone banking as an enhancement to an online account. Like www.wellsfargo.com they state they do not charge fees, except when transferring via Microsoft® Money and Quicken®. Their slick video demonstration offers ease of use, control and access to all your accounts. They do state you can only use them without charge in Wachovia's own ATM machines. Customer experience reveals a different story. Checking customer Peggy from Texas, a retired special needs assistantant and recent convert to online banking, paints a different picture. "I used to do bill pay online but found it to be too much hassle and the bank took 4-5 business days to write the checks making my payments late", she states. She also had issues with the reliability of the bank to show transactions promptly. "It would sometimes take four days to post a purchase made with your ATM card", she said. Another issue she had with Wachovia was their overdraft charging: "They charge $35.00 for an overdraft and took the money from my savings account without asking", she mentioned. More bank inefficiency resulted in another complaint from Peggy: "Wachovia let you overdraft several times on your ATM card charging you 35$ everytime. It takes 3 days for the mailing to get to you that you overdrafted, so if you use your card a lot you racked up a lot of charges. You had to ask them to not let the card authorize if there is not enough money."
Even if Wells Fargo takes over Wachovia in the next few weeks (by the end of October 2008), it is unlikely this will affect the operation of its online banking; conversely, I expect Wells Fargo to strengthen this successful area of Wachovia.
www.jpmorganchase.com/www.chase.com
Coming from a long established tradition of merchant banking, JPMorgan Chase's online bank www.jpmorganchase.com has a somewhat different ethos to other online banks. This could be due to the fact that their personal customers often had previous experience of JPM through a company business account. Their bank for personal banking, Chase, [www.chase.com], presents a far better image than the parent site but still lacks some visual clarity and attractiveness of its competitors.
As you might expect from such an established bank, their telephone customer support is excellent. It operates 24/7; should you incorrectly enter your password three times and become blocked out of your account (standard online banking protocol), their telephone operatives will offer immediate assistance at any time of the day or night. My own online bank has a rather annoying policy of accumulating my login errors over a period of time, so JPMC's policy is very refreshing to me! Most online banks allow three attempts to login correctly with three successive failures result in a blocked account, requiring you to contact your bank to reconfirm security details, receive a new code or other appropriate security measures. My online bank operates the same policy, but counts my login errors over a period. Thus, I could login today and make one error but succeed on my second attempt. Tomorrow I cold do the same but on a third separate visit they would block access to my account, and not acknowledge the fact that I had succeeded in accessing my account after just one error. I find this deeply annoying but Chase's telephone operator assured me that they do not operate such a policy.
They also offer telephone banking (as well as telephone support) and an ATM debit card; services are free except where the debit card is used in a non-JPMC ATM machine. They are are one of the few banks to offer immediate online access without having a previous account.
I do have some issues with their website however. It is not as attractive as others; there is no obvious pathway to account services through helpful images; instead, users need to select pull-down menus from the outset. In fact, one of the few image links visible on this site rather negatively states "E-mail fraud and phishing".
JPM Chase have no FAQ section, one of the few online operations without one. On the positive side, they probably have the best online banking demonstration. As well as pre-recorded video instruction, it is also possible to click links and get a sense of their website layout (the operating side of the Chase online system looks far better than the banks' home page). JPMC set the standard to online banking user demonstrations and building user confidence; curiously, they do not have a link to the demonstration from their home page.
- Wells Fargo Home Page
Home page for Wells Fargo, who provide a wide variety of online services. Note the small print concerning free online banking; they require a minimum balance of $5000 or charge $6.95 a month. - Bank of America home page
This is probably the most user-friendly onine banking site today, combining a useful mix of text and graphic information and advertisements. The link to their online banking is not highlighted, but appears around the middle of this home page. - Citibank home page
This nicely designed and attractive home page leads to a variety of services including Bill Pay, check and online accounts. The latter contains a pull down menu containing information on all products. - Wachovia home page
Wachovia's home page is crisp and clean, containing a lot of useful information without appearing cluttered. The link to Online services appears near the top of the page; the site also contains a useful compilation of FAQs. - JPMorgan Chase home page
Arguably the most powerful of the online banks, JPMorgan's home page lacks information. The link to their personal customer bank, Chase, is small and insignificant. It is found on the left hand side of the site. - Chase home page
The parent company's home page (JPMorgan) could learn a lot from their siblilng's site. Chase's home page is inviting, concise and informative, containing the best online demonstration of the banks discussed in this hub. - Some easy-to-adopt security tips for computing and banking
This hub discusses better and simpler ways to keep your web passwords organised and secure, as well as offering practical advice when using your bank cards. Simple methods are suggested through which you may maintain strong internet security and pro - Internet Archive: Wayback Machine
Wonder how the internet looked 12 years ago? Were you ever suspicious of those sites who claim they have being going since 1923? This site allows you to check the history of a domain name, and to see a cached version of any site since 1996. - Quicken's home page
Quicken is a software package, offering expert personal money management for a small cost ($2.99 a month) in addition to the software cost. It can be integrated into other online banks, although that usually incurs a charge from your bank. - Microsoft Money's home page
Similar to Quicken, Microsoft's software package offers integrated accounting on your PC. Its strength lies in the ability to balance your accounts and the basic package is somewhat cheaper than that of Quicken. - Savings Accounts & Online Banking Rate List
This site offers some comparative online savings rates. Be warned that all such sites operate on commission (usually receiving a payment for every referred customer), so it is advisable to check other independent reviews before proceeding.
Conclusions
There is relatively little difference between the facilities offered by these banks; the greatest being the imposition of a minimum balance by some online banks (www.wellsfargo.com, www.citibank.com's checking account). Another deciding factor is the availability of your bank's ATM machines where you live and work, particularly if you're going to have a considerable charge to use a rival's ATM machine. For those who feel less confident using online technology, the availability of telephone support is useful (www.wellsfargo.com appear to be one of the few banks to omit telephone support). Interest accrued does vary somewhat between these online banks, but then you need to assess your typical usage before deciding (for example, how many times you might use a rival bank's ATM and the charge incurred).
Online banking advantages
The most useful perks offered by all online banks concern convenience of access. Not only does the customer save money but time also; most online banking transactions can be done 24-7. All of the aforementioned banks offer cellphone support where you receive a text alert when your balance falls below a critical level; most also offer an alternative or complimentary e-mail notification service.
Disadvantages of online accounts
The main issue of online banking is not, as you might have guessed, security, but is the delay in lodging checks to your account. Where previously people went in person to a branch where the check was then cleared in a day or two, online banks require you to post your check, thus leaving you open to the performance of USPS. With most people opting to have their salary paid directly into their bank, money flow is not such an issue. Additionally, the ability to transfer funds from other banks results in more flexibility (except wwwbankofamerica.com); despite this many online customers also maintain their local bricks-and-mortar bank account, simply to lodge checks.
Online banking security
Most online banks place the onus on you to protect your passwords and security protocol. However, if you prove that you have been hacked, many online banks will guarantee your money against theft. They are desperate to keep good customer goodwill, particularly when so much money is at stake. Even for the non-technically minded, online banks employ safety features such as automatic timeouts, where you are logged out after a period of inactivity (typically five minutes, so don't login and then have a coffee). Once you complete login on most online bank websites, you are shown the date and time of your last login. This may be useful if your account was hacked and unauthorized people accessed it without your knowledge. It is good practice to choose a strong password but change it periodically; I have written a hub concerning easy-to-use password changes (see link below).
Most customers opting for online banking do so with their existing bank. This is why banks treat customer loyalty so seriously, and go to great lengths to get regular customers from an early age. What else did you think when you were offered those financial incentives as a teenager?
NetBanker feeds
- Service: Even Business Customers Deserve Jargon-Free Correspondence
After an inspiring trip to FinovateEurope, being completely immersed in new technology such as voice/facial recognition, intuitive UIs, and hassle-free mobile payments, I was jolted back to reality when I came home and opened a letter from my bank.... After an inspiring trip to FinovateEurope, being completely immersed in new technology such as voice/facial recognition, intuitive UIs, and hassle-free mobile payments, I was jolted back to reality when I came home and opened a letter from my bank. The bad news arrived in a plain-looking envelope, always a bad sign. I was told that Chase Bank was reversing a $6,000 check we'd deposited a week earlier. I've seen some awful customer correspondence over the years, but this may be the topper. The bank would never send something this illegible to consumers (I hope), but I guess they think small business customers are savvy enough to understand the jargon and ignore the bad design and inconsiderate copywriting. The bank is wrong. They can't just grab $6,000 from a small business owner and make no effort to apologize or explain what's going on. Here's the backstory: We deposited a check over the counter at a Chase branch that was made out in US Dollars, but drawn on a foreign bank. It was accepted with no questions asked by the teller and credited to our account with next-day availability. A week letter, the bank changed its mind, removed the money from our account, and sent the letter shown below. I can understand putting a hold on the funds, but the utter lack of courtesy in communicating the issue is inexcusable. Ideally, the teller should have warned us about the hold period. But since that didn't happen, the bank should have sent me an immediate email apologizing for the delay and explaining the situation in simple vocabulary. Instead, I got an absolutely ugly letter (see below) that looks more like a Nigerian 419 scam than something a huge corporation would send. Here are nine problems: 1. Mixed use of ALL CAPS and sentence case, bad spacing, and black & white logo, makes it hard to read, amateurish looking and potentially fraudulent. 2. "Convert Notification" What does that mean? I've never heard the term before. 3. "Batch - 3040743 p. 1" Huh? 4. Chase PO Box in Houston I deposited it in a Seattle branch, why am I getting a letter from 1,900 miles away? 5. "We are debiting your account" Please no accounting jargon, just say that you took the money out. 6. "We are converting your 6000.00 item to collection" What? You are sending a collector after me? What did I do? And why is it called an "item"? And where is the $ sign? 7. Reason: "Not eligible for immediate credit; new FX rate at PMT" What? First off, stop with the abbreviations, FX and PMT. It won't cost anything more to spell out the words. And even knowing the jargon, this particular "item" was written in dollars (but did come from an international company), so it's a little hard to follow the logic here. 8. "Industry standard for International Collections is 4-6 weeks" What, I'm not getting the money for 4-6 weeks! Really? Why? Don't you think we are good for it if it were to bounce. And why didn't the person at the branch mention this in the first place? 9. There nothing quite as user-friendly as a 16-digit alphanumeric confirmation number. It could at least have spaces or hyphens so I can read it. Bottom line: This is mostly an off-topic rant about one poorly written letter. However, had the message been delivered to me electronically, it could have included links back to the original check, links to FAQs covering international deposits, or even a direct form to ask questions. ------------------------------ Chase letter "explaining" a deposit reversal (27 Jan 2012) NetBanker.com Sponsors NetBanker.com Sponsors
- FinovateEurope 2012 Best of Show Winners Named
At yesterday's second annual FinovateEurope, 35 companies laid it on the line with in the grueling 7-minute demo format plus a day of networking in the old London fish market on the Thames. For the first time ever, and... At yesterday's second annual FinovateEurope, 35 companies laid it on the line with in the grueling 7-minute demo format plus a day of networking in the old London fish market on the Thames. For the first time ever, and much to our astonishment, every demo finished at or under the time limit. Thankfully, we never had to hear the bell signifying that time is up. At the end of the last demo, eligible audience members (note 1) voted for their 3 favorite demos (note 2). All 35 companies received votes (employees of presenting companies cannot vote), but 4 stood out in the vote tally (alphabetic order): Cardlytics (with Aimia) showed its in-statement ad platform and management tools (demo recap) Dynamics which launched it's "chip and choice" card for the chip & pin world (demo recap) eToro which launched its crowd-sourced "guru finder" to help located traders to follow/copy (demo recap) Nutmeg launched an investment service focused around the needs of the everyday investor (demo recap) Dynamics and eToro are previous Best of Show winners. You can read our live blog posts on each demo now. And in 2 or 3 weeks we'll have the full demos available at Finovate.com. Thanks to everyone who attended and presented. We are truly humbled by the support from the European financial community and we are already making plans for the 2013. ------------------------------ Notes on methodology: 1. Only audience members NOT associated with demoing companies were eligible to vote. Finovate employees did not vote. 2. Attendees were encouraged to note their favorites as the day went on and choose 3 favorites from just the demos of that day. Ballots were turned in at the end of the last demo session each day. 3. The exact written instructions given to attendees: "Please rate (the companies) on the basis of demo quality and potential impact of the innovation demoed. Note: Ballots with more than three companies circled will not be counted." 4. The four companies appearing on the highest percentage of submitted ballots were named Best of Show. NetBanker.com Sponsors NetBanker.com Sponsors
- Out of the Inbox: Bon Voyage Email from Capital One
Yesterday, I mentioned Capital One's self-service travel notification process. Another aspect of the service is a follow-up email before you head out of town (see below). I like the email for a couple reasons: The well wishes make you... Yesterday, I mentioned Capital One's self-service travel notification process. Another aspect of the service is a follow-up email before you head out of town (see below). I like the email for a couple reasons: The well wishes make you feel good about the bank The message provides helpful contact info in case of trouble It's an an additional fraud check to ensure that it's really you traveling to Yakutsk next week The bank even tells you to call collect. Nice. Capital One could jazz up the message with more color and snappier copy (note 2), but it gets the job done. ----------------------------- Capital One email to customers who've told them they are traveling internationally (31 Jan 2012) Note: Sent the day before scheduled departure Notes: 1. Picture credit: Greeting card at Zazzle. 2. I'm surprised Capital One doesn't use this opportunity to reinforce its travel rewards, mobile app, and zero FX fees. 3. We've tackled remote banking customer service and messaging a number of times in previous issues of our Online Banking Report. The last one was Live Help earlier this year. NetBanker.com Sponsors NetBanker.com Sponsors
- Last Chance to Register for FinovateEurope 2012 -- Get Your Ticket Now Before It Is Too Late!
FinovateEurope 2012 is less than a week away and we are very excited to return to London to showcase the best new innovations in financial technology from across the globe. On next Tuesday, dozens of cutting-edge startups and leading established... FinovateEurope 2012 is less than a week away and we are very excited to return to London to showcase the best new innovations in financial technology from across the globe. On next Tuesday, dozens of cutting-edge startups and leading established companies (check out the list of presenters) will take the stage to debut their latest and greatest ideas via Finovate's signature fast-paced, demo-only formatWe blew past last year's attendance total of 450 last week and tickets have continued to sell strongly (there are still a few left if you want to register). In case you're curious about who is attending this year, here is a small sample of the organizations that have already registered: ABN Amro Accel Partners AEGON Bank American Express Balderton Capital Bank Julius Baer Barclaycard Barclays Bank BBVA Best Buy BN Bank BNP Paribas Budapest Bank Caixabank Capgemini Capital One CelentCIBCCitibank Commerzbank Cortal Consors DAB Bank Deutsche Bank EFMAFiserv GartnerGreylockHandelsbankenHP HSBC IBMIndex Ventures ING Bank IntuitJack Henry KPMG La PosteLloyd's Marketwatch Metro Bank MicrosoftMorningStarOneSavings Bank Ovum PayPal PostFinanceRabobankRBS Silicon Valley Bank Skandiabanken Societe Generale SpareBank Standard Chartered Standard LifeThe Bancorp Bank The EconomistTowerGroup VolksbankYahoo! Finance Yodlee If you want add your organization's name to this list and join our top-notch audience to watch the future of European finance and banking technology debut live next Tuesday, please register soon before it is too late. We'll see you in London! FinovateEurope 2012 is sponsored by: Bluerock Consulting & The Bancorp BankFinovateEurope 2012 is partners with: BankerStuff, BankInnovation, Celent, Deutsch Startups, Finance on Windows, The Financial Services Club, The Financial Services Innovation Centre, Juniper Research, and PYMNTS.com. NetBanker.com Sponsors NetBanker.com Sponsors
- Service: The Value of a Search Box within Online Banking for the DIY Crowd
I've always disliked toll-free (telephone) customer service. You have to find the number, identify yourself repeatedly, choose from confusing categories, then wait on hold until you finally get the honor of pleading your sorry case to someone who has... I've always disliked toll-free (telephone) customer service. You have to find the number, identify yourself repeatedly, choose from confusing categories, then wait on hold until you finally get the honor of pleading your sorry case to someone who has all the power. I usually end up feeling like an idiot or a third grader asking for a bathroom pass. Before the Internet, call center service was a necessary evil. Going forward, let's get rid of it. Self-service, whether completely automated or "guided" by real humans, saves money, and done right, can be a more satisfying customer experience. Back to my sample of one. When I have a question, I always look for the webform, email address, or even the live chat button; anything that keeps me from dialing 1-800-IMAFOOL. But when you want to do something at your bank that's relatively complicated, such as investigate a suspicious charge, change your credit limit, etc., it can be difficult to figure out how to do that on your own. That's why I like Capital One's "Ask a question..." box in the middle-right of all its credit card management pages (see first screenshot). Today, I wanted to tell the bank I might be using its card internationally. I was already logged in to pay my bill, so I simply typed "travel" in the right-hand box (see first screenshot) and a link to the correct online form was delivered in the "answers" section (see second screenshot). It worked just like I expected. So kudos to Capital One for making it easy to navigate to the right page, and more importantly, handling the entire travel notification process online. Of course, I'd prefer the bank just tracked me automatically via GPS (note 2), but we'll get back to that another time. ----------------------- Capital One aids do-it-yourselfers with a prominent search box on every page (28 Jan 2012) Search results for "travel" Notes: 1. Western Electric ad from 1959 (from eBay) 2. At FinovateEurope next week, one of the presenting companies, Finsphere, offers just such a technology. Capital One, you should give them a call. NetBanker.com Sponsors NetBanker.com Sponsors
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Thanks Peter great write up kudos!
Would have thought Chase's online security was very good (although I'm not a customer of theirs). As with anything, try a small deposit and ensure your own security/passwords are of good strength, and change them regularly!
Good luck and thanks for your input.
do you think it is secure to do online scan deposit now that Chase have it? i would like to know your input on that.
Thanks LondonGirl - I also find online banking really useful and relatively easy to use. I have two accounts and they have proved extremely handy to date.
I like online banking - I use Lloyds TSB's system, and it's great.
thanks for excellent hub :)
J1000 - welcome back from Iraq and thanks for your comment. As far as I know, you don't need to appear in person to establish a citibank web account. They may ask you to scan your driver's licence or other identification - why don't you apply and see what happens?
Wishing you and yours a Happy Christmas and peaceful New Year.
CAN I OPEN A CITBANK ACCOUNT WITHOUT LEAVING THE HOUSE ? I'VE RECENTLY GOTTEN BACK FROM IRAQ AND I HAVE A PHOBEIA WITH CROWDS AND LEAVING THE HOUSE.
Hello Marie,
it is an additional individual account number, typically used when transferring money electronically. If you check your printed bank statement, you may find it somewhere - or else try checking when next accessing your account online.
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Many thanks for your comment Colin.
good hub - thanks
Thanks for your comments everyone. I believe the internet banking market is even more customer based, now that recession is taking place. Banks need good customers.
citibank seems to be good with their interest rates.
My mom was so afraid of online banking when it first came out, but now she loves it! Thanks for sharing this great hub.
Thanks for the info, it's good to know the differences between banks.
Nice work.
Really cimprehensive overview--I'm a real luddite when it comes to online banking and have been very resistant to using it--but at last will at least pay my bills online....I'm geting there:-) Thumbs up2
Excellent hub. A lot of useful info + I also like the videos. I gave you a big thumb up :-)
Great hub. I use online banking for several years and it´s easy to avoid bank visits this way ;)
Very interesting article, it informs the consumer as to the good and the bad about these banks. Thanks for the information.....
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pjdscott Hub Author 10 months ago
Thanks for your comment Jean R. Banking procedure continues to develop with new security software and protocol; check your local bank for the latest developments.