According to the American Bankers Association, 4 in 10 Americans bank online, with 26 percent of consumers using a mobile device. Still, that leaves a fairly high number of Americans who might be reluctant to hand over the reigns, and still question (and rightfully so) “Is online banking safe?”
Whether you are a long time online banker or someone who still hasn’t handed made the leap to online banking, there are some things you should know.
Is Online Banking Safe?
The most important question surrounding online banking is whether it’s safe or not. No one wants to wonder if they’ll wake up one day to empty bank accounts because of hackers or identity thieves. And, if you’re one of the hundreds of millions of people who have had an email or online account hacked, it only makes sense to be hesitant of your security online.
However, for the most part, banking online is just as safe as banking over the phone, through the mail, or even in person. In fact, because of measures such as HTTPS which encrypts data and authentication software for ensuring only you have access, online banking could be even safer than the alternatives.
Further, your money is federally insured. This means that if your bank is hacked and money is stolen, the bank is liable for the stolen funds.
Ways to Protect Yourself When Banking Online
So, is online banking safe? Yes. Still, there are precautions you should take when banking online. Here are a few ways you can protect yourself and your money.
Choose Strong Passwords
Sure, it’s a lot easier to use your dog’s name as the password on all of your accounts, but it isn’t really the safest. If one of your accounts is hacked, that leaves your bank account and your money particularly vulnerable. Choose a strong password and make sure you change it regularly.
Avoid Logging Into Free WiFi Networks
Everyone loves free WiFi, but if you need to tend to your finances, it’s best to avoid the free option. If you can’t wait until you have access to a secure WiFi connection, turn it off and use your phone data instead.
Sign Up for Text Alerts
It might seem like a hassle to get text alerts from your bank, but it can actually notify you right away of any suspicious activity. Instead of finding out next week that someone has emptied your bank account, you might get a text message notifying you of the first unauthorized transaction. This allows you to possibly stop some of the damage before it happens.
Look for HTTPS in Your Browser
As mentioned, banks typically use HTTPS protocols to protect you and your information when you log in to your account. Get into the habit of glancing at your browser when you access your bank’s site, and make sure that HTTPS is in the URL. If not, you might be on the wrong site, or you might need to switch banks until security measures are in place.
Be Careful of Phishing Emails
Hackers often send phishing emails asking you to log into your bank account. These emails look identical to emails your bank might send, and typically contain some kind of alert to scare you into acting immediately. Before you click on any links, make sure you aren’t being phished. If you aren’t sure, it doesn’t hurt to call your bank and ask.
Keep in mind that your bank won’t usually email you for personal information. If you get an email asking you to log in to your account, there’s a good chance it’s fraudulent. Check with your bank and find out how to report the fraudulent email.
Popular Online Banks
Most banks and credit unions offer online banking, so you should check with your current financial institution if you aren’t looking for a new bank.
Otherwise, here is a brief look at some of the online banks you might consider.
Ally Bank offers all of the financial products you’ll find with a traditional bank. This includes everything from checking and savings accounts to CDs and home loans. Right now, they are offering an interest checking account which earns from .10 percent to .60 percent APY.
TIAA Bank also offers full-service banking, including bank accounts, credit cards, and loans. You can also invest in precious metals and foreign currencies, which isn’t a feature you get with all banks (online or traditional).
Bank of Internet
As you might guess, the Bank of Internet is a popular bank online. This bank offers various financial products including checking and savings accounts, loans, and business banking. It even offers a special mortgage program for Costco members.
Do you bank online, and do you feel safe? Let us know in the comments below!