What is electronic banking?

The bank closes in ten minutes. Even if you make it there in time to cash your check, your
nerves will be frazzled. Isn’t there an easier way?

Yes, there is. Electronics and computers have turned banking into a round-the-clock business.

Automated teller machines (ATMs) now make it possible for you to do much of your
banking whenever you choose.

ATMs are computers that are much like limited-service bank branches. You can use them to
make a withdrawal, make a deposit, make a loan payment, transfer money from one account to
another, or check your account balance. In many cases, automated teller machines of different
banks are linked together in networks so you can use them when you travel to a different part
of town, another state, or even another country. All you need is a plastic card from your bank
and your own password.

Tired of rushing to the bank to cash your paycheck? Ask your employer about direct deposit,
a banking service that makes it possible for you to have your money electronically added to
your checking account every payday. Instead of receiving a paycheck, you receive a statement
that tells you your money has been deposited in your account. Direct deposit is popular among
people who receive Social Security checks or pension checks because it saves them the bother
of standing in line at the bank, battling bad weather, or worrying about being robbed on the
way home from the bank.

Another electronic banking service is called electronic funds transfer, or EFT. By using EFT, a
bank can transfer large amounts of money to another bank by sending an electronic message.

Electronic transfers take only an instant. An electronic message instructs a computer to deduct
a certain amount of money from one bank account and then add the same amount to another
bank account. The message is sent, and the appropriate amount is transferred. No cash or
paper changes hands, but money is transferred just the same.

Technology has made it possible to bank from the comfort of your own home. Banks offer
software packages that allow customers to debit or credit their accounts, check their account
balances, or even apply for a loan. Consumers can make these transactions online.

There are even “virtual banks” that have no physical bank office in a traditional way. They
provide all of their services to their customers over the internet. For more information on
internet banking, check out What You Should Know About Internet
Banking on the Federal

Reserve Bank of Chicago web site: http://chicagofed.org/consumer_information/what_you_

should_know_about_internet_banking.cfm

Technology has made it possible to bank from the comfort of your own home.

Source from : http://www.bos.frb.org