Online Banking Bill Pay
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Bill pay offered through your online banking account is an increasingly popular service offered by most banks today. Electronic billing allows the bank account holder to transmit funds from his account, to a creditor such as a mortgage holder, department store or utility company to be credited against a specific account in the name of the borrower. The payments are usually immediate, although some banking institutions complete the transaction on the next banking day.
The bank can also generate a paper check to be mailed out if the creditor is not set up to receive funds electronically.
Bank vs creditor
In order to take advantage of the online bill pay features on your bank account, there are some set up procedures that must be completed first. First, you should decide the type of bill pay you want to use online. Banks offer the service at no cost in most accounts today. This method is the simplest to you because the payments are established by you at your own bank. Alternatively, you can go to each business where you want the bill paid electronically, but this takes more initial set up time. It also means your account information is much more widely distributed, with more opportunities for errors to creep in.
Account
Next, you must define the account from which the payment is to be made. If you have more than one account at an institution, they are often linked in order to reduce the chance for an overdraft, but if you want to control the payments leaving your account, you must be very specific as to which account is to be drafted. You can reduce the risk of giving direct account information over the internet to other companies by choosing payments via a debit or credit card rather than a check.
Automatic
Decide whether you want the payment to be automatically prepared each month, such as in the instance of a mortgage payment. This saves time in preparation and setting up the payment, but puts you at risk in the event of a cash flow problem. You must also remember to make the payment at the proper time, although many online bill payment services include notification to you of a bill due date.
Account set up
If the accounts are set up individually, you will need to provide the bank routing number and bank account number or the credit card number. If the bank sets up the accounts, it will already have your account number and routing information.
Monitor
Be sure to monitor the transactions especially carefully the first month in order to verify that everything worked correctly. Each bill that was due to be paid should be checked off against your bank account statement. Contact the creditor promptly, as well as the bank if there is a problem detected on any of the transactions.
Features
In addition to completion of the transactions, many of the larger banks provide convenient features such as advance scheduling of payments and various helpful reports about the transactions that have been completed.
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09 July 2008, 7:22 pm
Make sure you set up online banking before you leave so that you can check your balance and pay your bills from abroad. Electronic Banking