DTMF tones are the regular tones produced when you press keys on your telephone handset. By default, during an active call when you press a key, the Vigor will not process it specially; it will be sent as regular sound, just like your voice. If you select 'outband' when you press a DTMF digit, the vigor will intercept it and send the dialled digit in digital format (i.e. digit '5' instead of the tone for '5') so that it is reproduced perfectly at the remote end. This is useful on congested/distant or low quality calls.
This applies to calls made to automated services which require you to press buttons on your phone to navigate menus. There are different signalling methods for such services - inband, outband and SIP Info. Telebanking typically expects 'in band' - in fact most PSTN services will, but digital services hosted on VoIP terminations (such as the DrayTEL server) might use SIP Info methods where the keypress is sent as a digital message rather than a digital waveform. You can select the signally method on the router's VoIP setup menu.
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