Credit: Shutterstock photoThese days, "going paperless" is a ubiquitous phrase in the promotional materials that banks hand out to prospective customers. Whether you visit a bank's website or meet with a banker at your local branch office, you'll usually be encouraged to get your monthly statements by email rather than in a mailed envelope. While this idea probably seems unremarkable to younger consumers, some of us whose banking habits predate the paperless trend may want to take a closer look at the possible benefits and disadvantages of switching over.
Avoids Monthly Paper Statement Fees
With deposit interest rates as low as they are, it makes sense to minimize account fees as much as possible. Unfortunately, a number of banks have taken to charging a monthly "paper statement fee" to people who stick with mailed statements. This fee of $1 to $3 is separate from the standard monthly maintenance fee, and can only be avoided by opting into the paperless statement system. Whether the paper statement fee is designed to extract additional revenue from customers or encourage everyone to move towards paperless banking, it makes little sense not to choose electronic statements if the alternative is to pay extra for your checking account.
Asking for additional copies of older statements from the bank can be even more expensive, costing as much as $5 per copy. There's no reason to pay extra account fees for this service so long as you can print out the same statements at home. Even if you don't choose paperless statements, most banks will make your statement history accessible online. You will have to log into your account on the bank's website to view and print statements.
More Efficient Record-Keeping — If You Pay Attention
When you receive statements by email or through online banking, one big advantage over physical copies is that you retain a permanent record of all your previous statements. Physical copies can vanish in the mail or get lost in the shuffle of your other documents; by contrast, the statements your bank sends electronically are often stored on its website, ready for you to access months or years later. And going paperless doesn't mean giving up paper completely: you always have the option to print statements out on your own, at no cost.
On the other hand, getting an email tends to be far less noticeable than encountering a physical envelope at your doorstep or on your desk. With so many emails clamoring for your attention, it can be surprisingly easy to ignore or lose track of the automated notifications from your bank. Missing just one or two emailed statements can put you in the dark about your checking account balance, opening the door to possible overdrafts. When you receive paper statements, being confronted with a physical report each month can help impose a steady rhythm on your finances. Each statement you get in the mail is like a regular checkup, reminding you of the need to face your balance and plan your budget for the coming month.
Eliminates a Common Method of Identity Theft
One important reason banks are pushing customers towards paperless banking is that mailing statements creates an avenue for identity theft. Statements carry a wealth of financial information that criminals can exploit. Your account number can be used to draft counterfeit checks or to order false transfers, while information about your balance and transactions might help a thief disguise the fraud to look like legitimate activity.
Paperless statements eliminate this vulnerability by moving your information through electronic channels rather than leaving it out for anyone to pick up. The security of email communication is an enormous and constantly evolving topic beyond the scope of this article, but it's reasonable to assume that the average inbox is far more secure than the average mailbox. Additionally, most banks don't email the statements directly to their customers. Instead, the monthly emails you receive will simply be notifications with a link to the bank's secure website, where you'll be required to log in before getting access to your statement.
The article The Pluses and Pitfalls of Paperless Statements originally appeared on ValuePenguin.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
