Online Banking

The performance of banking activities via the Internet. Online banking is also known as "Internet banking" or "Web banking." A good online bank will offer customers just about every service traditionally available through a local branch, including accepting deposits (which is done online or through the mail), paying interest on savings and providing an online bill payment system.

Online banks cannot provide direct ATM access, but they make provisions for consumers to use ATMs at other banks and retail stores, and they may reimburse consumers for any associated fees. Because of the reduced overhead costs associated with not having physical branches, online banks tend to offer consumers significant savings and pay higher interest rates. Online banks handle customer service tasks by phone, email or online chat.