Limitations to Online Banking

According to a report from CNET, an estimated 48 million Americans used online banking in some capacity in 2009 -- and that number is expected to increase to 63 million in 2014. The reasons are obvious: like online shopping, using the Internet for managing checking and savings accounts saves consumers time and transportation costs compared to visiting the physical bank. What's more is that online banking also enables features such as online bill payments, which saves consumers the price of postage. However, despite the added convenience, there are also some notable drawbacks to online banking.

Banks don't just enable customers to deposit checks, withdraw money and transfer funds -- they also make it easy for you to get answers to any questions that you might have. That's one area that online banking trails in. Although some banks have implemented instant message chatting features on their websites and offer customer service lines, these communications means don't compare to the convenience of speaking with a teller or other banking professional in person.

Many employers have implemented direct deposit, meaning that paychecks are electronically deposited into an employee's bank account. But there's other instances when consumers need to deposit checks or cash they've received. This can't be done online, unless you have a smartphone and belong to one of the banks that offer smartphone apps to make deposits. If you don't own a smartphone or belong to a bank that offers such technology, the only way to deposit funds is to make a visit to your bank, or, in the case of an online-only bank, use snail mail to send the deposit in.

Using online banking, customers have 24-hour access to their accounts and are able to transfer funds, make payments and view bank statements. However, if you need to withdraw cash for something, that must be done at either your bank location or at an ATM machine. If you're withdrawing cash at an ATM not affiliated with your bank, you'll most likely be subject to service fees. Internet-only banks don't have a network of ATMs, so such customers can expect to pay ATM fees with every withdrawal.

According to a report in IT News, 86 percent of online banking users deem security as a concern, with four out of five people identifying desiring better security measures than just a password. According to a story in Computerworld, hackers have been responsible for robbing small- to medium-sized businesses of millions. While banks maintain that their websites are safe, factors such as accessing accounts on smartphones and from unprotected Internet connections -- as well as cyberattacks -- have the potential to put banks, and user accounts, at risk.