Basic Banking Services

Basic Savings Accounts (BSA) and Basic Current Accounts (BCA) are offered at all banking institutions to Malaysians and permanent residents. These accounts can be opened under individual or joint names. BSA and BCA operate in the same way as the ordinary savings or current accounts except that these accounts enable you to perform only basic transactions and at a minimal cost or free. Similar to a normal current account, you must be 18 years or older and have an introducer in order to open a BCA. You are allowed to open one BSA and one BCA per bank.

As a BSA and BCA holder, you are entitled to perform the following banking services via facilities offered by your banking institution:

*Additional transactions may incur a charge as determined by your banking institution.

** If deposit machine facilities are not available at the branch, deposit transactions can be made at the counter without charge, These transactions will not be counted in determining the total number of OTC services performed. In cases where self-serve deposit facilities are provided and you choose to make a deposit over-the-counter, this transaction will be considered as part of the OTC limit.

PRIVACY OF YOUR PERSONAL

Both banking institutions and you have a
role in ensuring privacy. Protection of your
personal and financial information is an
extremely important matter when banking
via the Internet. The privacy of aconsumer’s
personal information to be an important
element of public trust and confidence in
the banking system.
Responsibilities of banking institutions

• in ensuring privacy

All banking institutions offering Internet
banking services have to adopt responsible
privacy policies and information practices.
For example, banking institutions should
prompt you with a message to inform
you that you will be leaving the banking
institutions’ websites and hence you will
not be protected by the privacy policies and
security measures of the banking
institutions when you hyperlink to third
parties from their websites.

• Your responsibilities in ensuring privacy

You are advised to read the privacy policy
statement of banking institutions, which
are posted at their websites prior to
providing your personal information.
By reviewing this policy, you will know the
type of information banking institutions
collect and maintain about you. Banking
institutions may want to share information
about you with a related entity to market
specific products that may meet your needs
and interests. If you do not want your
banking institution to share your personal
information with others without your
permission, you should request your banking
institution for the “opt out” option.

INTERNET SECURITY THREATS

You are encouraged to continue educating
yourself on emerging Internet frauds from
sources such as the online advisories of your banking institution’s website and from industry groups’
websites dedicated to eliminate online frauds.
You should stay vigilant for new threats, including phishing,
pharming and man-in-the middle attack.
Phishing is the act of sending spoofed e-mail messages falsely
claiming to be from your banking institution to lure you into
divulging personal information such as PIN or password for the
purpose of identity theft. It often contains a link to a website
that contains logos, formatting, graphics and wordings that are
convincing replicas of the banking institution’s original site.

Pharming is the act of exploiting the
vulnerability of the Domain Name
System (DNS) server software that allows
a hacker to acquire the domain name
of banking institution’s original site
and redirect traffic from the banking
institution’s site to a fraudulent site.
Man-in-the-middle attack is an attack in
which fraudsters are able to read, insert
and modify messages between you and
your banking institution without either
party knowing that the link has been
compromised.
You may minimise the risk of being
a victim of these Internet frauds if you
undertake the measures listed in “Actions
You Should Take to Ensure Security”.
You should also be suspicious of any
e-mail with contents or urgent request
for your financial information as phishers
typically include upsetting or exciting
(but false) statements in their e-mails
to get you to react immediately.

BEFORE YOU SIGN UP

Prior to signing up for the service, you are
advised to read and understand the terms
and conditions of the service, which should
provide:

• Information on duties of the banking institution and its customers.

• Information on who will be liable for unauthorised or fraudulent transactions.

• Mode by which you will be notified of changes in terms and conditions.

• Information relating to how to lodge a complaint, and how a complaint is investigated and resolved.

You should also discuss with your
banking institution the risks involved in
using Internet banking services and to
understand fully your rights and
responsibilities.

BANKING SERVICES AVAILABLE ONLINE

With Internet banking facilities, you
will be able to perform a variety of banking
transactions online. Depending on the
banking institution, the main services
offered through Internet banking allows
you to:

• Check your balances and statements.
• Submit applications for new accounts, credit cards or loans.
• Place fixed deposits.
• Transfer funds between accounts(own and third party).
• Pay bills, credit cards, loans and insurance premiums.
• Create, change and cancel standing orders.
• Request for cheque books and statements.
• Check status or stop payment of your cheques.
• Apply for bank drafts and telegraphic transfers.

Some additional services offered include
mobile airtime reload, interest rates
calculator and foreign currency converters.
Please check with your banking institution
for the full list of services offered and the
additional features and channels that are
available.

How To Apply To Become An Internet Banking User?

If you have an account with a banking institution that also offers Internet banking services, you may apply to use its Internet banking facilities by logging on to its website and following the application procedures provided. Information about the banking institution’s security practices can also be found on each banking institution’s respective website.

Remember to also look out for terms and conditions that cover:

Duties of the banking institution and customers Unauthorised or fraudulent transactions Mode by which you will be notified of changes in terms and conditions Information about lodging complaints and how your complaint can be resolved

Is Internet Banking Safe?

Like any other system, Internet banking poses a risk for users when it comes to security. However, any potential risk can be minimised with continuous checks by the banking institutions and even by yourself as a user.

Some safety measures conducted by the banking institutions include: Regular tests of the system to ensure its reliability Provision of internet security arrangements to ensure a secure infrastructure Usage of a number of security technologies such as encryption, firewalls, automatic log-off and monitoring tools Installation of system to detect and disable attacks from hackers Undertake a periodic review every 6 months to assess possible risks and detect possible weakness in the banking institution's risk management system

Protecting Your Account

Overdraft Protection
Many people overlook a valuable service offered by banks: the overdraft protection line of credit. This type of service is most valuable to a self-employed individual whose business is seasonal. If there are times during the year when you have cash flow problems, the overdraft protection line of credit can save you headaches-and at a lower interest rate than other forms of borrowing. Don't neglect to inquire about this service if it would suit your situation.

Truth In Savings
The Truth in Savings Act, a federal law, requires depository institutions to disclose to you the important terms of their consumer deposit accounts. Institutions must tell you:

• The annual percentage yield and interest rate;
• Cost information, such as fees that may be charged; and
• Information about other features such as any minimum balance amount required to earn interest or to avoid fees.

To help you shop for the best accounts, an institution must give you information about any consumer deposit account the institution offers, if you ask for it. You will also get disclosures before you actually open an account.

In addition, the Truth in Savings Act generally requires that interest and fee information be provided on any periodic statements sent to you. And if you have a roll-over CD that is longer than one month, the law requires also that you get a renewal notice before the CD matures.

Federal Deposit Insurance
Only deposit accounts at federally insured depository institutions are protected by federal deposit insurance. Generally, the government protects the money you have on deposit to a limit of $100,000. If an account is in trust or co-owned, there may be an effect on the amount of insurance coverage you have.

Planning Aid: See Bank Financial Condition Ratings. This site provides ratings on the financial conditions of banks so that you can evaluate your institution.

You can also check out the financial condition of your bank if you are concerned about protection for balances over $100,000.

Choosing An Account

Choosing an account is a matter of comparing the features of accounts at various banks. The features that should be compared are interest, fees, limitations on withdrawals, and limitations on time deposit accounts.

Interest
Determine the interest rate on an account. Find out whether the institution can change the rate after you open the account. In addition, find out the following.

• Does the institution pay different rates of interest depending on the amount of your account balance, and, if so, in what way is interest calculated? (See Tiered Interest Rates, below.)
• How often is interest compounded? In other words, when does the institution start paying interest on the interest you've already earned in the account?
• What is the annual percentage yield? The APY is a rate that reflects the amount of interest you will earn on a deposit.
• What is the minimum balance required before you earn interest?

Do you begin earning interest the day you deposit a check into your account-called "earning on your ledger balance"— or do you begin earning interest later, when the institution receives credit for the check-known as "earning on your collected balance"?

Tiered Interest Rates
Institutions may pay different rates tied to different balance amounts.

Example. An institution pays a 5 percent interest rate on balances up to $5,000 and 5.5 % on balances above $5,000. If you deposit $8,000, the institution that pays interest on the entire balance pays you 5.5 % on the entire $8,000. Other institutions may pay you 5 % on the first $5,000 and 5.5 % only on the remaining $3,000.

Fees
Determine the following about an account:

• Will you pay a flat per-month fee? How much?
• Will you pay a fee if the balance in your account drops below a certain amount? How much?
• Is there a charge for each deposit and withdrawal you make? How much?
• How much will it cost you to use an ATM to make deposits and withdrawals on your account? Does it matter whether the transaction takes place at an ATM owned by the institution?
• Is there a charge for bill payment by phone or modem? How much?
• If you have a checking account or an MMDA, how much will new checks cost?
• Will you be charged for each check you write? How much?
• Are fees reduced if you have other accounts at the institution?
• Are fees reduced or waived if you agree to directly deposit your paycheck or government payments (e.g., Social Security check)?
• What is the fee for stopping payment on a check you have written?
• Is there a charge for making a balance inquiry?
• Does the institution charge a fee for closing an account on or after it is opened? If it does, when . will the fee be imposed?
• Are you charged to have canceled checks returned to you with your statement? How much?
• What is the charge for writing a check that bounces (a check returned for insufficient funds)? And . what happens if you deposit a check written by another person, and it bounces? Are you charged a fee?

Check Clearing and Other Limitations
Find out whether the following will apply to the account:

• Does the institution limit the number or the dollar amount of withdrawals or deposits you make?
• If you close the account before interest is credited to your account, will you be credited with the interest that has been earned?
• How long does it take for checks to clear? How soon does the institution allow you to withdraw funds that you have deposited to your account?

For Time Deposits
If you are looking into a CD, here are some questions to ask:

• What is the term of the account (i.e., how long until maturity)?
• Will the account roll over automatically? Does the account renew unless you withdraw your money at maturity or during any grace period? A grace period is the time after maturity when you can withdraw your money without penalty. If there is a grace period, how long is it?
• If you are allowed to withdraw your money before maturity, is there a penalty? How much?
• Will the institution regularly send you the amount of interest you are earning on your account-or regularly credit it to another account of yours?

Bank Accounts: Comparing the Types

Bank accounts are a basic part of managing your money. Nearly everyone has a bank account of some sort, and about 16% of Americans' money is held in a checking, savings, or money market account.

Because features and costs of accounts can vary greatly among institutions, it is important to shop around when seeking a new account. You should also ask questions and negotiate regarding your current account; you may discover that you do not need to pay many of the fees you are currently paying.

This article discusses the various types of bank accounts, and provides suggestions for finding the lowest-cost account that will provide you with the services you want. In addition, it tells you what you need to know about Electronic Funds Transfers — how to get the best use from ATM cards, pre-authorized transfers, and point-of-service payments.

COMPARING TYPES OF ACCOUNTS

The accounts offered by depository institutions generally fall within one of these types:

1. Checking Accounts
With a checking account you write checks to withdraw your deposited funds from the account. Checking accounts provide you with quick, convenient and frequent access to your money. You can make deposits as often as you like. Most institutions provide customers with access to an automated teller machine (ATM) for banking transactions or debit features for purchases at stores.

Some checking accounts pay interest; others do not. A regular checking account -usually called a demand deposit account-does not pay interest, while a negotiable order of withdrawal (NOW) account-does.

Various fees are charged on checking accounts. You generally must pay for the printing of your checks. Other fees vary among institutions. Some charge a maintenance or flat monthly fee regardless of the balance in your account. Other institutions charge a monthly fee if the minimum balance in your account drops below a certain amount any day during the month or if the average balance for the month drops below the specified amount. Some charge a fee for every transaction, such as for each check you write or for each withdrawal you make at an ATM. Many institutions impose a combination of these fees.

2. Money-Market Deposit Accounts (MMDA)
A money market deposit account (MMDA ) is an interest-bearing account that allows you to write checks. An MMDA usually pays a higher rate of interest than a checking or savings account. MMDAs usually require a higher minimum balance to start earning interest, and often pay higher rates of interest for higher balances.

Making withdrawals from an MMDA is less convenient than withdrawing from a checking account. You are generally limited to six transfers per month to another account or to other parties, and only three of these can be by check. Most institutions charge fees with MMDAs.

3. Savings Accounts
With savings accounts you can make withdrawals, but you do not have the flexibility of checks. As with an MMDA, the number of withdrawals or transfers per month may be limited.

Many banks offer more than one type of savings account-for example, passbook savings and statement savings. With passbook savings you get a record book in which deposits and withdrawals are entered; this record book must be presented when making deposits and withdrawals. With statement savings, the bank mails you a regular statement showing withdrawals and deposits. As with other accounts, various fees, such as minimum balance fees, may be charged on savings accounts.

4. Credit Union Accounts
Credit union accounts are similar to those at banks, but have different names. Credit union members have share draft (rather than checking) accounts, share (rather than savings) accounts, and share certificate (rather than certificate of deposit) accounts.

5. Time Deposits (Certificates of Deposit)
Certificates of deposit, or CDs, are time deposits. CDs offer a guaranteed rate of interest for a specified term, such as one year. With CDs, you can choose from among various lengths of time that your money is on deposit, ranging from several days to several years.

Once you pick the term you want, you will generally have to keep your money in the account until the term ends. Some banks allow you to withdraw the interest earned while leaving your initial deposit (the principal) in the CD. Because you are leaving your funds with the bank for a set period of time, the rate of interest is generally higher than for a savings or other account. Typically, the longer the term, the higher the annual percentage yield.

If you withdraw your principal before maturity, a penalty is usually charged. Penalties vary among institutions, and can be hefty-sometimes greater than the interest earned, eating into your principal. The bank will notify you before the maturity date for most CDs. Often CDs renew automatically.

6. Basic (No-Frill) Accounts
Basic or no-frill accounts, which may be offered by some banks, give you limited services for a lower price. Basic accounts give you a convenient way to pay bills and cash checks for less than you might pay without any account at all. Basic accounts are checking accounts, but the number of checks you can write and the number of deposits and withdrawals you can make is limited. Interest generally is not paid.

Online Banking Advantages & Disadvantages

Online Banking Advantages

• In general, you will find lower fees and higher interest rates for deposits due to the reduced cost of operating online and not needing numerous physical bank branches.
• You will have easy access to account information and transactions, due to the fact that any Internet-enabled computer can become your "bank terminal."
• You will generally have up-to-the-minute current bank account information due the automation of most systems.
• You can transfer funds electronically between accounts.

Potential Online Banking Disadvantages

• You will need to mail (or have direct-deposited) any deposits to your bank account.
• Online banks generally do not have their own ATMs, although you will be able to access ATMs provided by many other banks. Most online banks offer a rebate for ATM usage.
• Most online banks do not have any physical locations for you to visit if you prefer to transact your business in person and face-to-face.

Online Banking Hints

Make Comparisons. All online banks are not created equally. There can be variances in fees, interest rates and special offers that may be available.

ATMs. If you need frequent access to ATMs, check the bank policies. Depending on the account, some online banks will rebate you for some of your ATM usage.

Telephone Support. If you need telephone support, when is it available and is there free unlimited phone access?

Get Automated. Online banking is most efficient with automation of as many processes as possible. For example, have paychecks direct deposited (no trips to the bank) and take advantage of online bill pay (no need to write checks for bills and then pay to mail them).

Access. Does the bank require you to download additional software (not a true Internet based bank) or can you access your account anywhere with simply an Internet connection?

5 Advantages of Online Banking

If you haven't starting taking advantage of your bank's online services, you should! Online banking has many advantages over traditional banking:

1. Download Banking Transactions. You can download your banking transactions directly into your financial software as often as you like. If you use your ATM card often, this is a must, because it keeps your bank balance current in your financial software. You won't have to worry about keeping all those debit card receipts.

2. Download Credit Card Transactions. You can download credit card transactions directly into your financial software. Don't waste time entering credit card charges by hand - download them! This is probably one of the biggest advantages of online banking, since entering credit card transactions manually can be very time consuming.

3. Online Bill Payment. Online bill payment is easier and less expensive than generating and mailing a paper check. Your bank may offer free bill pay services - if so, this saves the expense of ordering checks and buying stamps. Checks will be generated and mailed by your bank at your authorization. Plus, the checks will have the vendor names directly on your bank statements, next to the amount of the check and check number. This is not true for traditional checks.

4. Quickly Verify Bank Balances. If you need to verify your bank account balance, just signin to your bank's online services. No more waiting for the bank statement, or calling the bank to get your balance. To get an accurate balance, take the bank's balance as shown online, subtract any outstanding checks, and add any outstanding deposits.

5. Quit Paying Bills. Use your vendor's auto-debit or auto-charge feature. Once established, your bill will be paid automatically through your bank or credit card account. This eliminates the step of manually paying the bill! Perfect for gas, electric, water, cable, phone, and other utility-type payments.

Save yourself time and money by taking advantage of online banking. Call your bank and credit card companies today to find out how to enroll in their online services.

Getting the Most Bang for your Buck

I realize most people have already made their resolutions for the New Year, but try adding one more. Decide that you are going to get the biggest bang for your buck out of your banking services this year. My husband and I have been using the same online bank for several years. We have a joint checking account for household expenses and we each have a separate checking account also. The joint account was originally his and my name was added to it when we got married.

The two separate accounts are free checking accounts that we signed up for to simplify some of our expenses and track them better. The money he needs each week for gas and tolls and other miscellaneous expenses goes into his account. Money that I need for the supermarket and children related weekly expenses goes into my account. The joint account is for the mortgage and all other household bills and expenses. Since this was originally his checking account my husband prefers reconcile that statement when we get it. I usually track the balance in that account when I am paying bills by using the automated phone line. I handle the other two account statements.

I have been looking for more ways to cut expenses this month so we can stick to our resolution to pay down our mortgage and build up more equity. I was mortified when I saw the amount of fees we were paying on that checking account. This month we paid almost $25.00 in extra fees. I checked back a few months and there have been months that were more than that. This bank charges for everything. We get charged for every check after a certain amount of checks, we get charged for electronic transfers to our children's savings accounts when we make deposits with their online bank, online banking fees, fees for the bank's ATM machine and larger fees if we use a different ATM machine. Needless to say we will be using a different bank before the month is out. My husband is going to get the paperwork to change his direct deposit and we will get this taken care of before he gets his next paycheck. He gets paid every two weeks. I was really surprised because my husband is usually so good with money. It's just that he was so territorial about that bank statement. So I left it for him to take care of like he wanted. I guess it had to do with that account being his from before we were married.

If you have been dealing with the same bank for years out of habit or because of its location, do yourself a favor and take a hard look at your statement and decide whether convenience or habit is really worth the fees you are paying. I'd rather be putting that $25.00 a month toward my mortgage than giving it to a bank for fees. There are too many banks out there that will give you those same services for free. This is such an easy fix and it can save you a couple of hundred dollars a year in fees. Bankrate.com compares checking account fees in your area for you.

Go to Bankrate.com and click on Checking & ATM under where it says compare local interest rates. Once you choose your state, it will give you a list of banks in your area with their fees. If you click on the avoid fees category heading it will show you the minimum amount you need to keep in the account to avoid fees arranged from the lowest to the highest. If you click on monthly service fees category it will arrange the list again in the order of the banks that charge the lowest service fees each month. It also lets you know the insufficient funds fee, ATM fees for their and other ATM machines and whether or not online banking is available for each bank. You can also do the same for savings accounts and CD's and just about any other type of account.

If you are already comfortable with online banking you can save even more by paying your bills online, many banks offer that service now too. Automate the process for yourself as much as possible it does help you to save money. If your job offers direct deposit, take advantage of it. It will save you the trouble of cashing your paycheck (and spending some of it before you get to your bank) before you deposit it. Taking advantage of your bank's online bill pay service will also save you postage and late fees if your payment gets delayed in the mail. So pull out your checking account statement and take a good hard look at it. Unless your checking account is already free, chances are that you could do better by doing some comparison shopping. Don't let old habits stop you from keeping a few hundred more of your hard earned dollars in your pocket this year.

According to a recent report by Keynote Systems, the leading provider of online customer experience research services, the three banks that offer the best customer experience for online banking services are National City, Washington Mutual and Bank of America. So if you have decided to give online banking a try you might want to check out one of these banks first. They were chosen out of a group of ten banks which included: The Bank of America, Bank One, Chase, Citibank, National City, Sun Trust, U.S. Bank, Wachovia, Washington Mutual and Wells Fargo. Now that you have checked out banks to save money on your checking account, do yourself a favor and check out a savings account. If you don't open one up, you will always be able to give yourself a reason not to save. I happen to use ING Direct. Their savings account has a 2.35% APY a year. It is the highest one that I have been able to find. Although it is an online bank, it is attached to my checking account so that I can transfer money to it when I need to. The thing I like most about ING Direct is the low minimums. If you are like me and need to start small, there are no minimum deposits to worry about. You can open your savings account for $25.00 or less.

Make it a point to save all of your change in a jar all month long and deposit it into your account once a month. It really does work. We paid for both of our children's birthday parties this year just by depositing our spare change into the bank that way every month. Also if you are leery of the stock like I am (we lost some money in the market a couple of years ago), than you can open up CDs. If you ladder the CDs (open a 1 year, 2 year, 3 year, 4 year and 5 year at the same time). It is almost the same as dollar cost averaging with the stock market if you keep adding to them over time and then keep rolling them over. There are also no minimums on CDs with ING Direct. Many other banks have minimums of $500.00 $1,000.00 and more to open CDs. Their rates are a little better but if cannot meet the minimums at this time, this is the way to go. It will help you to make a start. You can always transfer them to a bank with better CD rates once you have accumulated enough money to meet their minimums. As they mature each year you can transfer them one at a time to a bank with a higher rate. If opening a savings account is not an option you want to explore right now, see if your employer has an employee stock option plan or a 401k you can take advantage of.

You can have the money taken out of your check, usually before taxes, and many employers will match what you put in up to a certain amount. That's a 50% return on your investment. You won't come close to that in the stock market. If you have been telling yourself that you have time, eventually you will start saving, stop kidding yourself. We all know that tomorrow never comes, life happens, things come up if we keep allowing them to. I used to tell myself the same thing and something would always come up. It is not going to change until you decide to pay yourself first and make it a priority. Pretend you are paying a bill that has to be paid then put that amount into your savings account. Save your raise when you receive it. Forget that you got it and put that amount toward your 401k if you have one or put that amount in your savings account every pay period. As you pay off your debts, put part of the money you used to use for your debts in your savings.

There are many ways to save. Cutting expenses, clipping coupons eat one less lunch or dinner out a week, cut out one cup of coffee out a day and more. Make it a habit to look for ways to save just like you make it a habit to save. The two habits go hand in hand. None of us know if Social Security will still be there when we need it. If you don't make saving some money every month a priority and a habit now, you might just find yourself with only your savings or lack there of and the goodwill of relatives to depend on when you retire. Don't wait for that. Check your budget now and see where you can squeeze a few extra dollars from. This is one habit you will eventually be grateful you picked up.

The Benefits of Banking Online

How many drawers did you have to look through to find a bank statement the last time you needed one? Chances are you did not lay your hands on it as readily as you would have liked. If that is a familiar scenario in your home, help has arrived in the form of online banking. Even if you are among the most organized, online banking offers convenience you can't beat.

Consider online banking with your credit union for instant organization and access to all of your account information. With online banking, information about deposits, payments, statements, and all transactions is immediately available with only a few key strokes 24 hours every day.

Use online banking to pay your bills, transfer money between accounts and monitor your spending. When you pay your bills online you will need to take 15-30 minutes to set up your vendors (lists of payees, addresses, account numbers, etc.) after that, it takes mere seconds to set up a bill payment. You can opt for automatic payments on a date of your choosing or you can point and click each month. Bills paid via online banking arrive at their destination in as few as two days. You don't need stamps, envelopes or even a pen. Best of all, online banking compiles and allows you to access your payment history for every vendor on your payee list.

Not only will you save yourself the worry of searching for perpetually lost cancelled checks and bank statements you will also save a little money. Most credit unions offer online banking services and e-statements, etc. to their members at no cost with direct deposit or a qualifying account (usually as a benefit of a home equity loan or money market account).

Online banking is infinitely more convenient than waiting for your paper statement each month or even telephone banking. Your transactions are recorded in real time and you can see them as they occur. When you avail yourself of online banking services you are better able to track and monitor your spending. You may even find that it is easier to follow a budget and to avoid overdraft charges with online banking because you have a visual of your spending.

Worried about security? Don't be, a great deal of technological thought and energy is being brought to the task of maintaining Internet safety. Your banking information is encrypted and there is no chance that third parties can peek in. There is ample evidence that consumers have become more comfortable with online financial transactions. For instance, check printing has seen a decline and online shopping has seen a substantial increase. Financial institutions support our increasing embrace of online banking because it streamlines transactions and costs a great deal less than paper based transactions. Credit Unions pass these savings on to their members.

Visit your local credit union online to take a free online banking tour and demo. You will be surprised to learn how pleasant paying your bills and managing your finances becomes with the convenience and accessibility of online banking. The money you will save is an added bonus.

What You Should Know About Internet Banking?

here is a lot you should know about Internet banking. It can save you time, money and effort, but it's important to protect yourself from potential pitfalls. Below is information on banking options, different types of online banking, services and advantages, protecting your privacy, "cookies" and privacy, security, regulations that protect consumers, and filing a complaint against a financial institution.

Banking Consumers' Options

• You can go to a traditional "brick and mortar" institution that has a building and personal service representatives, but doesn't offer Internet banking services.
• Or you can bank at a "brick and click" financial institution that has a physical structure, and also offers Internet banking services.
• Or you can choose a "virtual" bank or financial institution that has no public building and exists only online.

Internet banking, and other types of online banking, offer advantages such as speed and convenience. But since the Internet is a public network, it presents some privacy and security issues. Knowing the "Do's and Don'ts" of Internet banking can help make your online banking experience more productive, safe and enjoyable.

Two Different Types of Online Banking

Internet banking is usually conducted through a personal computer (PC) that connects to a banking Web site via the Internet. For example, a consumer at home accesses a financial institution's Web site via a modem and phone line or other telecommunications connection, and an Internet service provider such as America Online, Microsoft's MSN Network, Earthlink, Juno or AT&T WorldNet.

Internet banking also can be conducted via wireless technology through both Personal Digital Assistants (PDAs) or cellular phones.

Electronic banking is conducted by using Automatic Teller Machines (ATMs), telephones (not via the Internet) or debit cards. Debit cards look like a credit card. But unlike a credit card, using a debit card removes funds from your bank account immediately.

What Internet Banking Offers — Services and Advantages

As a consumer, you can use Internet banking to:

• Access account information, review bills, pay bills, transfer funds, apply for credit or trade securities.
• You can find out if a check has cleared or when a bill is due.
• You can apply for mortgages, shop for the best loan rates and compare insurance policies and prices.
• And you can do all of these things anytime you want to — day or night.

Some people like to tie banking functions into personal financial software such as Intuit's Quicken or Microsoft's Money. This can make record-keeping and tax preparation quicker and easier. Many consumers also like the idea of not waiting in line to do their banking, and paying their bills without shuffling papers and buying stamps.

Protecting Your Privacy

You need to be concerned about privacy and security. Consider this: When you bank via the Internet, your personal and financial information may be shared with others without your knowledge.

A financial institution may want to share information about you to help market products specific to your needs and interests. For example, it might share information about your average checking account balance with an affiliate selling life insurance or securities.

Financial institutions have policies about what information they collect, how they use this information and with whom they will share it. Financial institutions are required to provide customers with a copy of their privacy policy. Reviewing this policy can tell you what information your financial institution keeps about you, and what information, if any, it shares with its affiliates or others.

You have the right to tell your financial institution not to share your personal information with others without your consent. You should be given a choice to "opt out," allowing you to limit sharing of your personal information.

• Do check for an "opt out" option.

How "Cookies" Could Affect Your Privacy

Internet technology allows financial institutions and other websites to track your browsing habits while at their site. This may be done using a small file stored on your PC called a "cookie." Tracking your browsing gives financial institutions information about your apparent interests and preferences. It helps them to potentially market goods and services to you based on these interests and preferences.

• Do check your financial institution's Web site privacy statement. Determine if the website uses cookies or otherwise tracks your browsing habits. If this tracking practice concerns you, your PC's Web browser may offer useful options.

A Web browser is a program on your PC that enables you to browse Web sites over the Internet (Internet Explorer and Netscape are two examples of browsers). Check the Preferences or Tools areas of your browser to look for cookies. Your browser may offer the option to notify you before a cookie is created, identifying who is attempting to place the cookie and giving you the option to accept or reject it. Your browser also may offer you the option to reject all cookies, or to accept all cookies.

Just be aware that some Web sites are designed to function properly only when their cookies are accepted. Blocking cookies may prevent normal access to certain Web sites or to some of their online options. If this happens, you can easily begin accepting cookies again.

• Do check your browser's options for accepting or rejecting cookies.

Security Tips — How to Protect Your Personal Information

Since the Internet is a public network, it's important to safeguard your banking information, credit card numbers, Social Security number and other personal information.

Some consumers have had credit card numbers and Social Security numbers stolen and used fraudulently. Of course, this can happen even if you don't bank online. By taking reasonable steps to protect your personal information, you can reduce the chances that it may be stolen.

• Do ask your financial institution about its security practices. How does it safeguard your information during transmission and on their Web site?

Web sites use Uniform Resource Locators (URL) as a kind of Internet street address. You can tell your browser which Web site you want to go to with the URL. When a URL begins with http plus an "s", it identifies the site as "secure," meaning that it encrypts or scrambles transmitted information. This prevents others from seeing your information when it travels over the Internet.

Also, most browsers and Web pages display a small icon of a locked padlock or a key to show that the site is encrypting your information during transmission. Your browser may also notify you when you are entering a "secure" Web site.

• Do make sure your transmissions are encrypted before doing any online transactions or sending personal information.

Is E-mail Safe?

E-mail is usually not secure. It's not a good idea to send personal information such as your Social Security number, personal identification number (PIN) or account numbers via e-mail, unless you know it is encrypted.

• Don't send personal information by ordinary e-mail.
• Do change any passwords or PINs you receive via e-mail that are not encrypted.

Other Security Tips

Dos

• Do make sure you are on the right Web site. Imposters have created Web sites with similar names to trick unsuspecting consumers into revealing personal information.
• Do make sure that the financial institution is properly insured. It should be insured by the Federal Deposit Insurance Corporation (FDIC). FDIC coverage only applies to deposit products such as savings accounts, checking accounts and Certificates of Deposit (CDs). The coverage does not apply to transactions involving mutual funds, stocks, bonds and annuities.
• Do be "password smart." When possible, use a mix of letters and numbers for added safety. Change your password regularly. Keep your password or PIN to yourself. Avoid easy-to-guess passwords like first names, birthdays, anniversaries or Social Security numbers.
• Do check bank, debit and credit card statements thoroughly every month. Keep good records. Save information about banking transactions. Check this information for agreement with account statements, debit card bills, and credit card bills. Look for any errors or discrepancies.
• Do report errors, problems or complaints promptly.
• Do keep virus protection software up-to-date. Back-up key files regularly.
• Do exit the banking site immediately after completing your banking.

Don'ts

• Don't have other browser windows open at the same time you are banking online.
• Don't disclose personal information such as credit card and Social Security numbers unless you know whom you are dealing with, why they want this information and how they plan to use it.
• Don't download files sent by strangers or click on hyperlinks from people or sites you don't know. Sometimes doing this can infect your computer with viruses that can damage hardware or software.

Consumer Regulations that Protect You

There are federal regulations that protect consumers against unauthorized transactions, including Internet bank transactions as well as those conducted via an Automated Teller Machine (ATM) or using a debit card.

The Electronic Funds Transfer Act, or Regulation E, says a consumer's liability for an unauthorized transaction is determined by how soon the financial institution is notified. A consumer could be liable for the entire amount unless the unauthorized transaction is reported within 60 days of receipt of the financial institution's statement detailing the unauthorized transaction. The sooner the unauthorized transaction is reported, the less the level of liability; therefore, it's important to report unauthorized transactions immediately to limit loss. It's also important to remember that it might take time while the unauthorized transaction is being investigated for money deducted from your account to be credited back to it.

The Truth-in-Lending Act, or Regulation Z, governs illegal credit card use. While bank transactions conducted over the Internet are governed by Regulation E, credit card purchases over the Internet are governed by Regulation Z. When making purchases via the Internet, it's smart to use a credit card. That's because if a credit card is stolen or used by an unauthorized party, liability should be no more than $50 if proper notice is given to the credit card vendor. The vendor can be telephoned, but it's best to follow up the call with a letter stating that the transaction was made by an unauthorized user, and detailing the account number and the dollar amount of the unauthorized transaction. Consumers do not have to pay the disputed amount during investigation.

All financial institutions are also subject to Regulation P covering privacy and the Interagency Guidelines for Safeguarding Consumer Information.

All federally-insured financial institutions are subject to federal regulations concerning the distribution of personal information. These institutions must comply with established guidelines for safeguarding this information. They are also subject to onsite examinations to ensure compliance with consumer laws and regulations.

How to File a Complaint

It's best to contact a customer service representative or senior manager at your financial institution and discuss the problem first. The problem may simply be a misunderstanding.

But if you are still not satisfied, you can file a written complaint containing the following information:

• Your name, address, and daytime telephone number, and the name and address of the financial institution involved in your complaint or inquiry.
• Your account number, type of account, the names of the people you talked to and a description of the problem.
• Describe exactly what happened and the dates involved. Include copies of any letters or other documents that may help to investigate the complaint; however, don't send originals. Sign and date your letter.

Tips for Online Bankers

If you have an online banking account or want to open one, here are some tips that we hope you would find helpful:

• For many online banking account holders, the default setting is such that statements are available online or are mailed to account holders once every quarter (i.e. once every three months). Should you decide to receive a monthly statement, some online banks might charge you a fee for that.
• If you own an online banking account, you should be careful about its security. A popular scam that seems to gather steam is to send a genuine looking email to random people, asking them to click on a link and enter an account information to "prevent fraud", then gather the account and/or username or password information and use it for bad purposes. Be careful about this scam and don't enter your account information unless you're sure it's for legitimate purposes.
• If you have an online banking account and would like to purchase CDs, you might find that online banks offer higher percentages that do regular brick-and-mortar banks. So they might be a better choice for keeping your investments. However, when you're opening an account with an online bank, make sure that they are FDIC insured for the safety of your deposits.

Questions on Using Internet Banking

What am I able to use Internet Banking for?

Our Internet Banking Service provides you with access to your current and available balances on all of your accounts (with the exception of ISA's and certain Term Deposit accounts) and at least 60 days' transactions. You have the facility to transfer funds between any Yorkshire Bank accounts you hold and also to make payments via the service to any outside company or other bank. It is also possible to order a chequebook, and up-to-date statement.

When is Internet banking available?

Internet Banking is normally available 24 hours a day, seven days a week. However, there may be times when a part of the service is unavailable to allow for maintenance and updates to the system.

Is Internet banking secure?

Initially for someone to gain access to your account details they would have to have five pieces of information that only you should know. After you have registered there are three pieces of information required (two of which you can change at any time) before you can access the system.

The keys to security are your customer number and your Internet Banking password. It is vital that these are not disclosed to anyone. If at anytime you suspect that these have been compromised then you should immediately change your password and security questions.

Information passed between your computer and the Bank is encrypted and in the unlikely event of any third party seeing a message it is unreadable. Yorkshire Bank uses 128-bit encryption as well as multiple firewall technology.

How can I add a new account to my Internet banking facility?

Normally when you open a new account with the Bank it will be added to your list of accounts. This may take a couple of weeks to be processed. However, if you find that an account is not available and you wish access to it, please call the Telephone Banking service on 0845 7 365 365. Between the hours of 8am-8pm, Mon-Fri, new accounts can be added to your Internet facility.

Will I be able to see my Clydesdale Bank credit cards?

Yes, credit cards are easily accessed through Internet Banking. In addition to the balance and transactions on your credit card, you will also be able to transfer funds to and from the card at any time. If your card is currently available through your Telephone Banking facility then it should be automatically available through Internet Banking. If not, then please follow the above procedure for adding new accounts to the service. Transfers or payments from your credit card will be treated as cash withdrawals and therefore charges will apply.

I am unable to view the last 100 days transactions on my credit card?

Credit cards only begin to accumulate transactions on Internet Banking from the date you register with the service or the date you add on your credit card, whichever is later. Therefore, if you have only been registered with the service for 10 days or added on your card 10 days ago, then you can only access the last 10 days transactions.

Can I view my Direct Debits and Standing Orders?

You can view any paid Direct Debits or Standing Orders through Transactions. There is not currently an available screen displaying a list of Direct Debits and Standing Orders. Direct Debits and Standing Orders cannot be cancelled or amended through Internet Banking, however you can arrange this by calling 0845 7 365 365.

Can I still use Telephone Banking?

Other Yorkshire Bank services remain unaffected by your use of Internet Banking. You will still have the same access to them as you did previously.

What if my account information looks incorrect?

If any information on your account looks incorrect or suspicious in any way you can contact your account holding branch or the Customer Contact Center (0845 7 365 365).

Can my account information be viewed by anyone else?

Internet Banking encrypts all information sent between your browser and the Bank. Your customer number and password protect your Internet Banking account. Your accounts cannot be accessed without this information. You should be aware that some browsers can store Internet pages that you have viewed, locally. This could then be viewed by anyone with access to that computer.

It is strongly recommended that you do not use this facility. If you have already selected this and wish to remove it please refer to the help section of your browser relating to the save encrypted pages to disk facility.

Internet Banking is running very slow, am I doing something wrong?

If the service is running abnormally slow it is possible you have too many other applications open at the same time. Therefore other applications may need to be closed to optimise the speed.

If I have a joint Current Account, can we both use the online banking service?

Yes, however both of you will have separate customer numbers and should register different security information. It is strongly recommended that you keep your security details to yourself and do not disclose them to your partner.

My partner on my joint account cannot view a future dated bill payment, which I set up?

Both parties to a joint account have separate customer numbers that identify them within the Bank. We use your customer number as part of Internet Banking security, therefore the payment you have set up is recorded under your customer number and not the actual account number. As such joint account holders cannot view payments set up using their partners customer ID number.

Can I use financial software such as Microsoft Money with Internet Banking?

Yes, the Export option that appears on your screen will allow you to copy information on your Internet Banking into a relevant package.

How can I print the information I want?

There is an option on the screen for Print. This allows you to print directly from Internet Banking. Alternatively, you can export the data into a financial software package and print from there.

Why does the service sign me off after a period of time?

As an automatic security measure if you are idle for 10 minutes the service will sign itself off, meaning that you will have to log back in when you attempt to use it again. We strongly recommend that you do not rely on this facility, and if you are planning to leave your PC for any length of time that you log out of Internet Banking.

How do I logoff or disconnect?

You simply click on logout on the menu and the system will disconnect from the Internet Banking server. You will have to log back in with your security information next time you want to access your accounts.

Tips for Safe Banking Over the Internet

As use of the Internet continues to expand, more banks and thrifts are using the Web to offer products and services or otherwise enhance communications with consumers.

The Internet offers the potential for safe, convenient new ways to shop for financial services and conduct banking business, any day, any time. However, safe banking online involves making good choices – decisions that will help you avoid costly surprises or even scams.

This brochure offers information and tips to help you if you are thinking about or already using online banking systems. We will tell you how to:

• Confirm that an online bank is legitimate and that your deposits are insured
• Keep your personal information private and secure
• Understand your rights as a consumer
• Learn where to go for more assistance from banking regulators