CONSUMER REPORTS: A look at some new tools banks are offering
In recent years, banks have introduced new products and services that have significantly enhanced consumer convenience, notes Consumer Reports Money Adviser.
For example, rising consumer preference for paying by debit card at the cash register has reduced the need to find automated teller machines.
With smartphone banking apps, you almost never have to set foot inside a bank branch anymore.
Which of your bank's conveniences are worth considering and which should you avoid? Here's Consumer Reports Money Adviser assessment of some of these services:
Online and mobile banking. Online banking lets you access your checking and other accounts from your home computer, and some 80 million consumers in the U.S. use it. Mobile banking allows you to do the same thing while you're on the go via a smartphone app or mobile website. Most banks offer both. They're highly secure, and having access to all your account information and most banking services make them must-have conveniences for keeping track of deposits, debits and balances; transferring funds between accounts; finding nearby ATMs; and other money-management features that make banking a snap.
Electronic bill paying. This service, a common feature of online and mobile banking, lets you pay your bills from your computer or smartphone, eliminating the need to write checks and buy stamps. Instead, once you enter your payment details to create a standing list, you simply type in the amount and click to send a payment each month. The funds are taken from your bank account on the date you specify and are promised to reach the recipient within five days. Easier still, you can put recurring level payments for such expenses as your mortgage on autopilot, and they'll be deducted each month on whatever day you set.
Account activity alerts. Email or text message account alerts from your bank are a great way to monitor your accounts for fraudulent activity and head off the possibility of bounced checks and fees.
For example, you can get an alert when your checking balance falls below a certain level, signaling you to move money to cover outstanding checks. You can get an alert when your credit card payment is coming due.
Overdraft coverage. Banks can no longer enroll you automatically in debit overdraft coverage programs. Those programs allow you to make purchases with your debit card even if your account balance is insufficient to cover them, but they charge you a hefty overdraft fee, averaging $35, each time you do. Now you have to opt in to this "service."
And though your bank will probably present overdraft coverage as a benefit, it's one Consumer Reports Money Adviser thinks you can do without.
Without overdraft coverage, a debit card purchase at a store will simply be declined if your account balance is too low to cover it, and you won't be charged the hefty fee. But that doesn't apply to checks and automatic bill payments. If those cause your account to be overdrawn, you'll still be hit with a huge fee for insufficient funds.
Photo check deposit. An increasing number of banks are letting customers make deposits by using the camera in their smartphone or tablet to photograph the front and back of checks so that they can be deposited electronically using a mobile banking app. There's usually no charge for this service.
Person-to-person payments. You can electronically pay friends the same way you pay your monthly obligations with online bill payments.
All you need is a name and an email address to create a new payee in the person-to-person section of your online banking setup. The feature is called QuickPay at Chase and Popmoney at Citibank and others.
To send money, you enter the recipient's name, the amount to be paid, the date it should be sent, the account from which it's to be taken and a memo to explain what the payment is for. Then you simply click "send."