Financial Education

Military retirees and online banking: securely save time and money

As a military retiree, you spent years using cutting-edge technology to accomplish various objectives, secure in your knowledge of that technology and how to use it. But when it comes to managing your own finances, odds are you’re low-tech, with direct deposit of your paycheck and trips to the ATM being the few ways you utilize technology to manage your finances. Many retirees are used to meeting with a banker or loan officer face-to-face, and still probably balance their check book with printed bank statements mailed each month.

New technology and security advancements, however, have torn down the walls between what used to be done kneecap-to-kneecap and what can now be done over the Internet. Online financial services can save you time, give you more options, afford privacy, and provide you with greater flexibility, control, and access over your finances.

Save time and money
Online banking has exploded in recent years, with most banks now offering the service for free. There are also independent bill paying sites that work as intermediaries between your bank and your creditors, although they charge a fee.

In today’s world, there are a number of advantages and reasons why you may want to consider on-line banking:

Ease of use—While it takes time to initially setup your online account, it’s worth the effort since it makes paying bills and transferring funds a breeze. You can set up bills to pay automatically each month, much like an allotment; move money from savings to checking (or vice versa) in seconds; and there’s no need to address envelopes, lick stamps, and stand in line at the post office.

Ease of payment—You can pay almost anyone through online banking, either by an electronic funds transfer (e.g. to a utility company), or by a check the bank writes and sends on your behalf (e.g. to a babysitter). Simply enter the receiver’s information, select the amount to be paid, click a button, and it’s done.

Instant tracking—Want to find just how much you spent eating out at lunch last month? Curious as to how long it takes for a payment to clear? You can usually find out all of this information (and more) in mere seconds. The ability to categorize your expenditures also helps you keep in line with your budget, or find ways to save money.

Fraud detection—Many people who fall victim to identity theft or fraud often don’t discover it until it’s too late. With online banking, you can keep tabs of your account daily and discover any questionable purchases almost as soon as they occur. You can even set up your account so you receive an email or text message whenever your debit or credit card is used overseas or at an internet shopping site.

Makes you money—Since you can send payments later than you could if you had to mail your bills, the money stays in your account longer and, thus, you earn more interest. You also save on late fees since you can send payment almost instantly, which is helpful if a bill gets lost during a move or you just forgot about it.

Regardless, less than half of all Internet users take advantage of online banking according to the Pew Internet Project. The numbers for those over the age of 40 are even lower. The biggest reason for these numbers is lingering concern over security and privacy issues.

A little common sense
Today, there are millions of online financial transactions every single day, from those checking their bank accounts, to those trading millions of dollars in stocks. And most occur without incident. However, just as you use common sense when walking up to an ATM or visiting your bank, a little online common sense will ensure a quick transaction while protecting your privacy and credit.

There are a number of industry and online standards and tips to let you know if a financial services site is protected and legitimate:

Yellow padlock— There should be a yellow "padlock" icon at the bottom of your browser window that indicates you are on a secure connection.

The Web address—The site’s address should start with "https" instead of just "http." Also, depending on the browser you are using, you may get a "warning" window informing you that you are using a secure Web page.

Privacy policy—The company should offer their privacy policy and make it easy to find. Of course, the information is only useful if you actually read it.

Better Business Bureau (BBB) logo—If the Web site has a "BBB Reliability Program" logo on it, click the logo and see if it takes you back to the BBB site. While you're there, spend a few minutes and search using the company’s name.

Don’t get hooked by “phishers”—At no time will a legitimate financial institution ask for any private information via email. If there is a problem with your account, they will either do it over the phone or from a secure site. And even then, any verification is usually done with the “security question” you entered when you signed up, or the last four digits of your Social Security number.

Think before you click—If you do receive an email stating there is a problem with your online account, do not click on the link in the email since scammers disguise those links to look legitimate. Instead, use a browser bookmark or type in the institution’s Web site address yourself. Better yet, pick up the phone and call—if there is a problem, it will be easy to fix, and if there is not, you can report the scam.

Finally, to ensure online security and privacy, make sure the computer you use has updated virus protection, and make passwords complex by using upper and lowercase letter, numbers and symbols.

This information should give you some peace of mind when it comes to handling online financial transactions and, specifically, online banking and lending. Technology is only as good as how it’s used, and using the money management tools available online can be a great way to make your transition to civilian life a little bit easier.

About the author
Doug Allen is Chief Information Officer (CIO) of Pioneer Services, where he is responsible for establishing the strategic technology objectives for the company. With nearly 27 of experience in Information Technology, Allen has published two books, Learning Guide to the Internet and Internet Explorer 5 At A Glance, and has also authored several courses on a variety of personal computer technologies. Allen has also served on advisory panels for Microsoft and Compaq.

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