If you’re interested in trying new bank technology but you’re not sure what’s available, FDIC Consumer News offers this overview of some current services, many of them free.
Personal financial management and budgeting: Financial planning tools, often referred to as personal financial management software, can include electronic check registers on your home computer (which many consumers will find much easier to use and balance than an old-fashioned paper check register) and “companion applications” for your smartphone that allow you to access your electronic check register wherever you are.
Mobile banking services go one step further by allowing you to access your account from anywhere using a smartphone, “tablet” computer or other device. An estimated 30 million Americans currently manage their finances using mobile devices.
“Mobile banking services can be very helpful if you are in a store contemplating a major purchase and need to know whether you have enough money in your account to cover the cost,” said Jeff Kopchik, a Senior Policy Analyst with the FDIC’s Technology Supervision Branch. “If your balance is low, you can use your mobile device to transfer funds from your savings account into your checking account to cover the purchase.” But remember that the available balance shown in online banking may be less than you have to spend if any checks or other transactions have not yet been posted to your account.
Your bank also may offer free online budgeting tools that can help you track your spending by category, monitor investments and meet your savings goals. Some of them offer retirement planning advice and calculators to help you figure out such things as whether you should refinance your mortgage or how much you need to be saving for retirement every month.
While not directly related to banking and not a new service, many consumers may wish to consider using tax-preparation software that can make preparing federal and state income tax returns easy and much less expensive than using a paid preparer.
Depositing checks using your smartphone or other mobile device: Many banks have rolled out a “remote deposit capture” (RDC) feature that allows customers to take a picture of a check with their mobile phone and deposit that check electronically, without visiting a branch or using an ATM. This service is becoming popular, especially among customers who don’t live or work close to a bank branch. “Mobile RDC can provide convenience to a variety of consumers, from young people to senior citizens,” noted Elizabeth Khalil, a Senior Policy Analyst in the FDIC’s Division of Depositor and Consumer Protection.
If you use mobile RDC, carefully keep track of the checks you deposit. For instance, you can write the date you deposited the item on the front of the paper check and hold onto it until the check has cleared and the money is in your account. Then you can destroy the check, preferably using a high-quality paper shredder. Contact your bank with any questions.
Account alerts: Most mobile banking systems will allow you to sign up to get text messages on your mobile phone or e-mails if your account balance drops below a set dollar amount, which can help ensure that you don’t overdraw your account. You may be able to receive text alerts if your bank observes “suspicious” — potentially fraudulent — transactions involving your account. Another possibility may be to get a notice of a certificate of deposit about to mature. “Mobile account alerts are probably the easiest and most effective way to monitor what is going on with your checking account in real time,” suggested Kopchik.
Mobile bill paying: Most mobile banking services allow consumers to pay companies that already have been added to their “approved list” on their bank’s online banking Web site. However, if you want to make bill payment even easier, some banks allow customers to use their mobile phone to take a picture of a paper bill from any merchant (provided the bill shows the company’s name and certain other information) and then click the “pay” button. “This new service eliminates the need for you to enter merchant payment information into your bank’s bill-payment service. Your bank will take care of that automatically,” said Khalil.
As with any mobile banking service, always check with your bank before signing up to make sure you know about any fees or other key terms.
“Loyalty” discount programs with retailers: These are new and not in widespread use, but here’s one example. You may be able to give your bank permission to analyze your debit and credit card transaction records and automatically arrange for some of your favorite retailers to send electronic coupons or other special offers to your home computer or mobile banking device. Some mobile payment programs that utilize a “mobile wallet” (an application that can be loaded onto your mobile phone) will enable specific merchants to send discount offers directly to your phone as you are walking by their store. Keep in mind that if you sign up for these programs you will have to share information about your buying habits with merchants or other third parties.
Finally, when using any mobile financial service, keep privacy and security issues in mind. “For one thing, mobile phones are much easier to lose or misplace than a desktop computer, so make sure that you keep track of your mobile phone and password-protect it,” Kopchik advised.