How Online Bill Paying Works

Online Bill Paying Options and Security

Ensuring your online banking experience is secure can take a few extra steps, but it can also be well worth the effort.
Ensuring your online banking experience is secure can take a few extra steps, but it can also be well worth the effort.

There are three main routes you can take to pay your bills online. You can pay them directly through your bank; you can pay them through the Web site of the payee (your utility provider, for example, or you credit card company); or you can use a third-party Web site to manage your payments.

Third-party sites such as MyCheckFree and Paytrust, allow customers to centralize their online bill paying in one place, coordinating them to help ensure all the bills are paid on time. The cost ranges from a monthly charge and transaction fees to nothing at all.

You can also decide whether you want to start using an online-only bank, which tend to offer better interest rates. If you do decide to go the online-only route, make sure the bank you choose is insured by the Federal Deposit Insurance Corporation (FDIC). It should say either "FDIC-insured" or "Member FDIC" very clearly on the Web site. For online bill paying, you'll want to keep an eye out for a little padlock icon that signifies a Web site is protected. Give it a click and some certification information should pop up; read it carefully.

In some ways, online bill paying is actually safer than other methods. People who pay their bills online can keep better track of their account activity, so they know right away if anything is amiss. They can also receive their statements and other financial notices through e-mail, so there's no chance someone can steal them straight out of their mailboxes or trashcans.

When paying bills online, just make sure you protect your personal data. For more about banking, visit the links below.

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