A Convenient One-Stop Option To Pay Bills

Imagine life without having to pay bills. Talk about heavenly bliss! But the painful reality is that almost all of us have to deal with bills. Some of us are better equipped to handle the stress and inconvenience of paying bills than others. But the good news is that automatic bill pay exists to help make the chore of paying bills a little easier.AdobeStock_145451274

Automatic bill pay – sometimes referred to as “online bill pay” or just “bill pay” – takes away the juggling act of remembering which bills are due when. It allows you to schedule your recurring payments online so they come directly out of your bank account when they’re due. Many banks even offer their own automatic bill pay systems, which allow you to view your various bills and schedule their payments in one central spot.

Think about that – no need to keep track of paper bills and making sure you pay them on time. No need to write out checks or purchase stamps and envelopes to mail them. No need to second-guess whether you actually included the invoice or the check in that envelope!

Timely bill payments, incidentally, are one of the biggest factors that make up your credit score. And because automatic bill pay helps you to pay your bills on time, it can have a major, positive impact on your credit report. By having your bills set up to be paid automatically on or before their due dates, you reduce the risk of late payments and resulting late fees – you just need to make sure you have enough money in your bank account to cover your scheduled payments

For this reason, when scheduling automatic bill payments, it’s a good idea to set up electronic alerts if they’re available. These notifications can inform you via email or text message when your payment is coming due, which can help you ensure you have sufficient funds in your account. And in most cases you can also set up alerts with your bank’s Online Banking system, and have them notify you when your account balance dips to a certain threshold.

From a security standpoint, payments made through automatic bill pay are also safer than check payments sent out through the mail. When you make an online bill payment, your sensitive personal and account information is encrypted, keeping it out of the hands of criminals. The same can’t be said of check payments. If a crook intercepts the envelope containing your check payment, they not only have access to your account information, but they’ll likely have your name and address as well.

One potential drawback of automatic bill pay however, is that some consumers may rely too heavily on it to manage their finances. In other words, they “set it and forget it”. When using automatic bill pay, it’s still important to monitor your scheduled payments to ensure the correct amounts are being paid at the right times.

Automatic bill pay can also be detrimental to your budgeting goals if you lose sight of what’s going on with your finances. Even if your payments are coming out of your account automatically, it’s still important to stay organized and on top of how much money is coming in and going out of your account every month.

Another thing to keep in mind that is that automatic bill pay might not be a good fit for bills that fluctuate heavily from month to month, such as credit card or utility bills. For instance, if you end up with a higher bill than expected one month, it could cause you to overdraw your account, leaving you with overdraft or insufficient funds fees.

Overall, automatic bill pay can a great tool to help you manage your bills and achieve on-time payments. It’s just important to remember that it isn’t an excuse to get lazy with your finances.

Are You Considering an Online-Only Bank?

Believe it or not, the roots of online banking stretch back to the 1980s. According to historical records, Bank of Scotland offered a service called Homelink in 1983 that allowed people to pay bills and transfer money via the internet. At that time, you could only hook up to the ‘net by using a landline telephone or a TV.considering-an-online-only-bank

We’ve come a long way since then, to the point where online-only banks like Bank5 Connect have made noticeable inroads in the banking world. Not having to go to a physical location to conduct your banking transactions is becoming more the norm than ever before.

So what in particular has motivated millions to go this route?

Convenience and flexibility. There’s no longer a need to get dressed, drive to the nearest branch, and wait in a teller line to deposit money into your account. With an online bank, you can use a mobile app to snap a photo of your check, even if you’re lying in bed in your pajamas! Plus, you don’t have to wait until a bank branch is open to conduct transactions or to check on your account activity. You can do that, and more, practically any time of day using a laptop, desktop, smartphone or tablet. It’s banking on your terms, where and when you want to do it.

Insured deposits. Most, if not all, online-only banks are insured by the FDIC. This means that deposit accounts at FDIC member online-only banks are covered in the same manner as accounts at their brick-and-mortar counterparts. FDIC insurance protects each customer’s deposits, up to $250,000 per financial institution. However, it’s possible for you protect all of your deposits, even in excess of FDIC limits. One way to accomplish this is to open an account at a Massachusetts-based online bank, like Bank5 Connect, that offers DIF insurance in addition to FDIC coverage. DIF (the Depositors Insurance Fund) insures any deposits above the FDIC limit.

Lower fees, higher interest rates. Because online-only banks typically have lower costs (as in no physical branches to maintain), they can pass their savings on to their customers. Fees are generally lower and interest rates on deposits are generally higher with an online-only bank than with a brick-and-mortar institution.

Some people are hesitant to move their money from a brick-and-mortar bank to an online-only bank due to the fact that they’ll have less direct contact with the bank and its employees. There can be a concern about not being able to walk into a branch and speak with someone when something goes wrong with an account. In order to alleviate this fear, it’s important to choose an online bank that offers strong customer support like extended phone support hours or a live chat feature. It’s also a good idea to read some reviews from actual customers to get a sense of what call center hold times might be like, or how satisfied customers are with their overall ability to reach the bank.

Another common reservation people have about online-only banks is a fear about not being able to easily access their money. If you decide to go with an online bank that has no physical branches or dedicated ATMs, how will you make a cash withdrawal? To ensure you’ll have ample opportunity to withdraw your money as needed, you should thoroughly research the bank’s ATM policy. Some online banks are part of a national ATM network, meaning you can use any ATM in that network without incurring fees. Others will reimburse you for ATM fees. Bank5 Connect offers a mix of both. Bank5 Connect is part of the SUM ATM Network which is comprised of thousands of ATMs across the United States. In addition, Bank5 Connect will never charge its customers for using an ATM outside of the SUM Network, and will reimburse other banks’ surcharges up to $15 per statement cycle.

If the perks of online-only banking align with your lifestyle, it might be time to make the switch and find an online bank that best suits your needs. Just be prepared to spend more time in your pajamas!