From In Line To Online

For many people, balancing the household budget often requires mad dashes to the bank to keep a check from bouncing or to the post office to get the mortgage payment in on time. Even the more fiscally fit routinely have to give up a precious half hour just to stand in line at the bank. So wouldn't it be great for folks everywhere to have a bank branch in their own home or office?

Thanks to the technology revolution, it's happening. Financial institutions across the country are using software programs, online services, and even the Internet to allow customers to check balances, pay bills, and transfer funds among accounts. Bankers promise that, in the near future, you'll also be able to more easily buy certificates of deposit, mutual funds, and other investments, and even apply for loans electronically.

The simplest way to bank from home is to use the "screen phones" sold by some institutions. These specially designed phones allow users to perform the simplest tasks, namely to pay bills and check balances. But this convenience doesn't come cheap: Screen phones can cost anywhere from $80 to more than $200, and $7 to $10 in monthly fees--a hefty price given their limited usefulness.

BRAVERY. If you're comfortable at a keyboard, however, there are better options available. Some institutions, such as Citibank and Wells Fargo Bank, have long offered proprietary software that enables checking customers to tap their accounts via modem. The Prodigy online service offers links to 15 banks, but in some cases you'll have to pay a surcharge above Prodigy's basic $10 monthly charge. A few brave banks, including Wells Fargo, are offering limited services across the Internet, although many others say that they're holding back until cyber-security is improved. At any rate, individuals' potential loss from online theft, as in the case of credit-card fraud, is limited by federal law to $50 in most cases.

For most people, today's best option may be to plug into their bank through one of the three leading home-budgeting software programs: Intuit's Quicken ($40), Microsoft Money ($35), and Managing Your Money ($40), which is owned by NationsBank and Bank of America. The latest versions of Quicken and Microsoft Money have made it easier to download financial records and have also increased the number of participating financial institutions. Meanwhile, Managing Your Money vows to have its online banking capabilities ready by spring.

Some participating banks offer either free or heavily discounted copies of these budgeting programs, and many PC makers bundle them with new machines. Sometimes banks waive the monthly fee for handling bill payments--which usually start around $6 for 20 transactions--for their best customers. Chase Manhattan Bank has even been paying a $50 bonus to customers who remain online for three months. Why? Many banks see these services as their best hope for reducing the costly processing of paper checks.

There's a big limitation to the budgeting programs, however: Banks will only allow you to access your credit-card records via the software if you have a checking account with them. If your credit card comes from another bank--and chances are that it does--you can't get to that data electronically, although banks indicate this will eventually change. What's more, bill payments are not controlled by your bank, but by Intuit: Its clearinghouse currently processes payments for both Quicken and Microsoft Money. Nonetheless, most banks surveyed insist that they will cover any penalties or fees incurred if a customer's bills aren't paid on time through Intuit's error.

Which of these programs should you choose? The easy answer is the one that will connect you to your bank. Microsoft Corp. (800 508-8458) has only four banks linked to its Windows 3.1 version, but 17 to the new Windows 95 edition of Money. Quicken (800 224-1047) has ties to many of the same banks, plus access to American Express Co. and Smith Barney Inc. You can get an extensive list of participating institutions from BUSINESS WEEK Online on America Online. All that you have to lose are those late-night dashes to the bank.



Some banks, including Citibank and NationsBank, sell special phones that enable you to pay bills and transfer funds between accounts. But the pricey phones' functions are limited.


A growing number of banks allow you to access account data directly through popular home-budgeting programs such as Quicken. The software can also be used for paying bills.


Banking has entered cyberspace, with institutions such as Wells Fargo opening World Wide Web sites offering access to personal account data and loan applications.

Before it's here, it's on the Bloomberg Terminal.