Web-based banking tools can make things easier

The PC-based financial management program, for most of us, is an idea whose time has come and gone. The real action these days is with Web-based banking.

Last week, we briefly looked at what you can do with programs such as Quicken and Microsoft Money. The answer -- a lot, provided you're willing to invest plenty of time setting the program up. For someone with relatively simple finances, however, these program are too much.

Web banking, on the other hand, is instantly useful to anyone.

Surprisingly few people take advantage of it, even though most banks now offer the service free or at a nominal charge. Jim Breune, editor of the Online Banking Reports, estimates that less than 10 percent of computer users are into online banking, and about half that group is using traditional proprietary systems rather than the Web. So get with it.

Here's the rundown: You use a secure Web browser (more on that later) to check balances and transfer funds among your accounts on the bank's computers, just as you would with an ATM. In addition, though, you can write checks online.

You set up a list of predetermined payees, and once the list is processed, you can transfer money directly to thei r accounts.

No checks, no paper jams, no stamps.

As with home banking programs, Web banking allows you automatically to pay the same amount, every month, to your mortgage holder, car loan company, or whatever, or write ad hoc checks to anyone. But you can access your Web bank services from any Internet-enabled computer, and since all the data is on your bank's computer there's nothing for you to back up. You can just as easily handle your bank accounts from home, at the office or on the road. Also visible online: a list of checks that have cleared, and of checks you've scheduled to be written.

You don't have to jump into Web banking all at once, the way you would with PC-based banking or the old style of online banking that didn't use a Web interface.

Most banks now offer Web banking (see onlinebankingreport.com for a list of banks) free, so at the very least, you can sign up and use the Web to check your daily bank balances and transfer funds as needed, even if you don't use the service to write your checks. Or you can write some of your checks with the service, log them manually in your check register and do the rest by hand.

You can even use a home banking program if you wish -- all you need to do, at the end of the month, is download all your transactions from the Web and read them into the program. In other words, a home banking program keeps a record of your transactions, but you create them on the Web. You may want to do that since you don't get canceled checks; instead, you get a monthly statement that includes the names of payees.

The absence of canceled checks is an issue with Web banking. If you balance your checkbook regularly (most people don't) you may find it annoying to have to wade through statements. On the other hand, people who aren't big on record keeping will probably find it comforting that they don't have to guesstimate how much money they have in the bank or which checks haven't cleared -- its all listed neatly online.

There's only one problem with Web banking: The browser that comes with your PC probably does not have enough security built into it. Most banks require something called ''128-bit encryption.'' The government bans the export of this kind of encryption, so it's not the standard fare for downloads or software that's built into PCs. In the case of Netscape Communicator, you'll need to download a secure version from the company's Web site; same with Internet Explorer. A number of readers also have recommended the freeware package ''Fortify,'' which patches Netscape Communicator so it does handle high-level encryption.

Banks take security seriously. Mine won't even let me save my account name or password -- probably a good idea.

I have a few suggestions to make the transition to Web banking painless:

Set up a separate bank account for Web banking and have your bank link it electronically to your current account. You'll use your Web bank account for payments you make regularly, like mortgages or phone bills. Your old account becomes a petty cash account for ad hoc checks and ATM withdrawals. Trust me on this one, it really helps to keep your money straight.

Have your paycheck deposited electronically to the Web bank account. That's the quickest way to clear it, and you can transfer money as needed to your cash account. Once you get a feel for how much you need a month for the petty cash account, set up an automatic transfer for that amount.

Assuming the rates and fees aren't too onerous, get a credit card from your bank that's linked to your checking accounts. This is a convenience; not all banks offer the service, and I wouldn't switch banks for this reason.

Make a list of all your recurring payments, the amounts, the payee names, account numbers, addresses, phone numbers and due dates. Tack it up next to your computer, and use the list to fill in your payee information. Because it can take a couple of days for a bank to activate payments, and another five days for transfers to clear, start setting up the account a month before you plan to use it to pay your bills. Once you start writing checks on the Web bank account, use the list to check, every few days, that the money has gone out when it was supposed to go out.

Automate as much as possible. My phone bills are pretty consistently within a $20 range, so I set up my account to automatically pay the average amount. Usually I'll revise to the exact amount when I get my bill, but if I'm busy the check goes out and I reconcile the difference the next month. I also authorize some payments -- my satellite TV bill, for example -- be made automatically from my credit card.

Check writing and other transactions usually proceed in three steps: first you create the transaction, then you save it, then you send it. If you don't send it, it disappears into that big bit bucket in the sky. Always print out a copy of your transactions after you send them. Use these printouts along with the list of regular transactions you've created to monitor what's going on.

While some Web banking systems will let you trade stocks and monitor investments, most are just for maintaining your bank accounts.