For many consumers, electronic banking means 24-hour access to cash through an automated teller machine (ATM) or direct deposit of paychecks into checking or savings accounts. Electronic banking, also known as electronic fund transfer (EFT), uses computer and electronic technology as a substitute for checks and other paper transactions. Some financial institutions provide zero-liability fraud protection for all electronic transactions, which makes electronic banking safer than writing checks. Electronic banking uses passwords and user codes if you use a computer or Personal Identification Numbers (PINs) if you use an ATM card. A few banks require that you set up an electronic signature and scan. Protect your money, but choose the system that take into account your life and job.

Electronic Fund Transfers: More Than an ATM
Electronic banking now involves many different types of transactions:

• Automated teller machines or 24-hour tellers are electronic terminals that let you bank almost anytime. To withdraw cash, make deposits, or transfer funds between accounts, you insert an ATM card and enter your PIN. Some financial institutions and ATM owners charge a fee (up to $5), particularly to consumers who don't have accounts with them. ATMs will show the fee before you complete the transaction. Check the rules of your institution and the ATMs you use to find out when or whether a fee is charged.



• Direct deposit/withdrawal You can authorize specific deposits or withdrawals to your account on a regular basis. That means you can automatically put money in a savings account or pay a mortgage bill.



• Pay-by-phone systems You can call your financial institution to pay certain bills or to transfer funds between accounts. You have to set up this service before you use it for the first time.



• Personal-computer banking You can handle many banking transactions online with your personal computer. View your account balance, request transfers between accounts, and pay bills electronically.



• Point-of-sale transfers Pay for purchases with a debit card, which may be your ATM card. The process is similar to using a credit card, but the transfer of money is immediate. When you pay at the store, an electronic message transfers money out of your account to the stores account. Using a debit card means you have to know how much money is in your account and that you will keep accurate records in your check or savings book.



• Electronic check conversion The paper check you use can become electronic payment at the point of sale when you use electronic check conversion. In a store, you will be asked to sign a receipt authorizing the merchant to present the check to your bank electronically and deposit the funds into the merchant's account. You get a receipt of the electronic transaction for your records. Some bills are also paid this way; you may be asked to sign a one-time agreement to allow this.

Make Corrections Promptly
Once you get your bank statement, you have 60 days to correct a problem or error. The best way to protect yourself from charges or withdrawals from an account, lost or stolen ATM or debit card is to notify the financial institution by certified letter, return receipt requested, so you can prove that the institution received your letter. Keep a copy of the letter for your records.

Once you've notified the company of the error, it has 10 business days to investigate and tell you the results. It may, however, take up to 90 days to complete a full investigation. If no error is found at the end of the investigation, the institution may take back the money if it sends you a written explanation.

Check through your statements carefully, and don't assume banks don't ever make mistakes. Debit card and Point of Sale transactions can contain mistakes, and it is up to you to find and correct them.

Checklist for Electronic Banking
If you decide to use EFT, keep these tips in mind:

• Take care of your ATM or debit card. Know where it is at all times; and if you lose it, report it as soon as possible.



• Choose a PIN for your ATM or debit card that's different from your address, telephone number, Social Security number, or birth date. This will make it more difficult for a thief to use your card.



• Keep and compare your receipts for all types of EFT transactions with your statements. That way, you can find errors or unauthorized transfers and report them.



• Make sure you know and trust a merchant before you share any bank account information or pre-authorize debits to your account.