Are Online Banks Safe? 3 Things To Remember

Are Online Banks Safe? 3 Things To Remember

( – Not long ago, people only transacted with their banks in person, driving to the bank to deposit and withdraw cash. Waiting in line at the bank was the norm, but not anymore. Online banking has become the go-to way to manage money, but many institutions popping up have no brick-and-mortar counterparts. So, are they safe?

Here are some ways to ensure you’re putting your money somewhere secure, even online.

  1. FDIC: Make sure the Federal Deposit Insurance Corporation (FDIC) insures the online bank you’re considering. The government entity protects up to $250,000 of your deposited cash should the company you choose fail — just like it does for brick-and-mortar banks. The only exception is a credit union, which insures its depositors under the National Credit Union Association.
  2. Security: Before choosing a bank, determine how the institution plans to keep your cash and information safe. Read the fine print before signing up or call the institution to ask about encryption measures, multi-level authentication security, and other ways it intends to protect you and your assets.
  1. Research: Although FDIC security and encryption protocols are essential, it’s up to you to research options and choose a trustworthy institution. Investigate online or talk to friends to make sure you feel comfortable leaving your money with the online bank you choose. You could even call the institution to get a feel for its operations.

Remember, online banking doesn’t have to be an all-in adventure. If you’re unsure about completely giving up the brick-and-mortar option, try it out with only a portion of your money to see how you feel.

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