Telephone lines, unlike the Internet, are generally safe from snooping. And custom software means that these systems aren't vulnerable to the security holes that keep cropping up in Web browsers, although dial-up systems are open to mistakes by the banks' own programmers. This may be a distinction without a difference. All financial information that you exchange with your bank, including account numbers and passwords, is encrypted before it goes out on a phone line or the Internet. Browsers indicate that they are in secure, encrypted mode by displaying a lock icon, in the lower left corner in Netscape Navigator and the lower right in Microsoft Internet Explorer.
Encryption gives Internet transactions reasonable protection from prying eyes.
And good software doesn't store unencrypted passwords or other sensitive information even on your own hard disk, where it could be exposed to prying eyes by a poorly designed browser. Most online banking services allow you to check your balance, find out if checks have cleared, transfer funds among accounts, and download transaction records into Intuit's Quicken or Microsoft Money. Many of the services will let you pay bills electronically, usually for a monthly fee, and many allow you to pay all your bills online, even if the bank has to send out a check itself. Some banks also provide for the purchase of stocks or mutual funds through affiliated securities dealers. The nature of these transactions provides protection.