Virtual Banking



Virtual and Online Banking Report

The nature of banking has changed in Canada with the advances in computer technology and security. Many Canadians want to have access to their banking records immediately, without having to update their account books at a banking institution. In this activity, discover the benefits and drawbacks of virtual banking and online banking.

1. Find the answers to the questions listed below at the Bankrate website.

a) What is the difference between online banking and a virtual bank?

Online banking – is done over the internet, for research, extended hours and convenience, but still gives you the option to go to the branch and do things in person

Virtual Bank - are banks without bricks; from the customer's perspective, they exist entirely on the Internet, where they offer pretty much the same range of services and adhere to the same federal regulations as your corner bank.

b) What are the advantages and disadvantages of online banking?

Advantages of online banking

• Convenience: Unlike your corner bank, online banking sites never close; they're available 24 hours a day, seven days a week, and they're only a mouse click away.

• Ubiquity: If you're out of state or even out of the country when a money problem arises, you can log on instantly to your online bank and take care of business, 24/7.

• Transaction speed: Online bank sites generally execute and confirm transactions at or quicker than ATM processing speeds.

• Efficiency: You can access and manage all of your bank accounts, even securities, from one secure site.

• Effectiveness: Many online banking sites now offer sophisticated tools, including stock quotes, rate alerts and portfolio managing programs to help you manage all of your assets more effectively. Most are also compatible with money managing programs such as Quicken and Microsoft Money.

Disadvantages of online banking

• Start-up may take time: In order to register for your bank's online program, you will probably have to provide ID and sign a form at a bank branch. If you and your spouse wish to view and manage your assets together online, one of you may have to sign a durable power of attorney before the bank will display all of your holdings together.

• Learning curve: Banking sites can be difficult to navigate at first. Plan to invest some time and/or read the tutorials in order to become comfortable in your virtual lobby.

• Bank site changes: Even the largest banks periodically upgrade their online programs, adding new features in unfamiliar places. In some cases, you may have to re-enter account information.

• The trust thing: For many people, the biggest hurdle to online banking is learning to trust it. Did my transaction go through? Did I push the transfer button once or twice? Best bet: always print the transaction receipt and keep it with your bank records until it shows up on your personal site and/or your bank statement.

b) What are the advantages and disadvantages of using a virtual bank?

Virtual banks pass the money they save on overhead like buildings and tellers along to you in the form of higher yields, lower fees and more generous account thresholds.

The major disadvantage of virtual banks revolves around ATMs. Because they have no ATM machines, virtual banks typically charge the same surcharge that your brick-and-mortar bank would if you used another bank's automated teller. Likewise, many virtual banks won't accept deposits via ATM; you'll have to either deposit the check by mail or transfer money from another account.

2. Visit the ING Bank of Canada website . Then fill in the following chart:

|TYPE OF ACCOUNT |DESCRIPTION |RATE |RATES |

| | | |from your choice of |

| | | |financial institute:|

| | | |TD |

|Savings Account |The product that started the revolution. Save your money and earn interest considerably higher than the average of the |1.50% |.25% $5,000 |

| |Saving for retirement has never been easier. Plus, enjoy all the benefits of our Investment Savings Account in a |1.50% |1.15% |

|Retirement Savings Plan |retirement saving plan. | | |

|Tax-Free Investment Savings |The product that started the revolution is now even better. Save your money and earn tax-free interest considerably |2.00% |1.50% |

|Account (TFSA) |higher than the average of the big banks. With no minimum balances, no service charges, and now with high tax-free | | |

| |interest, all the money you put into your Tax-Free Investment Savings Account will grow like never before. Yet it's still| | |

| |there, when you need it. | | |

|Guaranteed Investment |Earn higher interest: competitive rates, no fees and a cashable (early redemption) interest rate that’s higher than most |1 |1 |

|Certificates (GICs) |savings accounts. |Year |Year 1.15 |

| | |1.75% | |

| | | |1 1/2 |

| | |1 1/2 |Year |

| | |Year | |

| | |2.25% |2 |

| | | |Year 1.5 |

| | |2 | |

| | |Year |3 |

| | |2.40% |Year 1.55 |

| | | | |

| | |3 |4 |

| | |Year |Year 1.70 |

| | |2.75% | |

| | | |5 |

| | |4 |Year 2.10 |

| | |Year | |

| | |3.00% | |

| | | | |

| | |5 | |

| | |Year | |

| | |3.50 | |

| | | | |

b) Fill in the current interest rates offered on mortgages at the virtual bank and your financial institute.

|Types of Mortgages |RATES – Virtual Bank |RATES |

| |ING |from your choice of financial |

| | |institute: |

| | |TD |

|1 Year Fixed |2.95 |3.5 |

|3 Year Fixed |3.89 |3.35 |

|5 Year Variable |2.25 |3 |

|5 Year Fixed |4.04 |5.34 |

|10 Year Fixed |5.04 |6.5 |

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