Online Banking
By on Apr 22, 2008
By Marcia Luke
Banking isn't what it used to be. As more users become familiar with the Internet, the way in which we bank is a far cry from the days of walking in, shaking hands with a branch manager, and opening up an account.
With a concentration of services under one roof, online banking has become more do-it-yourself in an almost one-stop way. From chequing and savings accounts, to investments, mortgages, home and auto insurance, credit cards, personal lines of credit, and loans, much can be accomplished with the mere click of mouse.
Jaime Berger, a paramedic in Lindsay, Ontario, has owned a home with her husband for five years. Many of her personal financial accounts are divided between CIBC and President's Choice Financial, a division of CIBC that offers only online and telephone banking, apart from dedicated cash machines at select Loblaws locations.
"It just ended up that way. They gave me the best interest rate and I get bonus points on my PC Financial MasterCard that can go towards groceries," says Berger. At first, Berger was reluctant to use Internet banking, but because both her and her husband work in shifts, it almost became a necessity.
"I can do my banking anytime of the day or night, regardless of my shifts at work, and the money comes right out of my account when I pay my bills so I don't have to wait for cheques to clear," she adds.
ING Direct also largely an Internet bank, opened in 1997 with one product?an investment savings account. Fabrice de Dongo, of ING Direct, says that it grew from there to offer more products, such as the "unmortgage."
"It's our spin on what a mortgage should be. The whole point of it is to own your home sooner," de Dongo explains. "Our cornerstone is accessibility, simplicity, and high value?fewer products at very competitive rates." Customers have access to call centre service, phone and Internet banking, as well as information booths in Montreal, Vancouver, and Toronto.
Although there are always those who will be uncomfortable with making any type of change to their banking practices, more and more see benefits and actually embrace it. Online banking portals offer numerous tools and resources. An individual can budget their finances, compare competitive rates, and even estimate how much of a mortgage they would be pre-approved for based on current and accurate financial information. If you have many or all of your accounts with one financial institution, you?ll be able tovisualize these at your computer, rather than keeping track of separate statements for each. Online formulas can help you to determine how payments on a mortgage or loan would change should you switch your payments from biweekly to weekly, or see at a glance what portion of a mortgage remains to be repaid.
Philip Fisher, senior director of operations for CIBC's Internet Channel Division, says that if you have access to the Internet, you should investigate the perks of online banking. "Buying a home is one of the moststressful things you can do; planning ahead is the best way to manage that stress."
While Internet banking can help you manage your finances, you need to know ahead of time what needs managing. "It pays to have a good understanding of what your expenses will be. Homebuyers should set up a plan for home expenses, property taxes, heating, etc. so that they know what they're in for and there aren't any surprises," says Fisher.
"Shop around even if your home bank offers what you consider to be a good rate," advises Berger. See if you can challenge it or get a better one elsewhere. And don't settle until you find something that you're happy with."
If buying a home is one of the more complicated financial manoeuvers you will make in your lifetime, then immediate banking information can make the process a little simpler.
"Part of our goal at ING Direct is to empower people to take control of their own financial management," says de Dongo.
A new homeowner should be proactive in researching their prospective mortgage and finding out precisely how much money can be saved as a result.
