Doing your banking online allows you to pay your bills, transfer money to the babysitter or your kid while away at college. This can save the cost and time involved with buying checks and stamps, and has the potential to reduce your paper clutter if you opt for paperless statements from your service providers and creditors. And to put the icing on the cake - if you opt to receive your pay by direct deposit, you may never have to make a trip to the bank again.
But consumers must take precautions to ensure that online banking is safe and secure, and to avoid falling prey to scams or having your personal information intercepted by identity thieves.
Choosing a financial institution
First, if youíre banking in the U.S., be sure that your financial institution is FDIC or NCUA insured. Whether you bank online or not, this is the first step in being confident that your funds are safe, up to $250,000. Funds in banks are insured by the Federal Deposit Insurance Corporation and funds in federal credit unions are insured by the National Credit Union Administration; both the FDIC and the NCUA are backed by the federal government.
Look for the logo on the financial institutionís web site. And to be even extra sure that the logo isnít a cut-and-paste fake, look up the financial institution on the
FDIC web site at http://www2.fdic.gov/idasp/main_bankfind.asp
or the NCUA website at http://www.ncua.gov/DataServices/indexdata1.aspx
Some banks, internet banks, are only available online and have no physical building where you can drop in to do your banking business. If you choose to use a bank without a physical location, be extra diligent in your research that you have a real bank and not a scammer attempting to lure you in to give out your personal identifying information. Fraudulent websites often use a name and website design that look very similar to a well-known legitimate bank.
Nearly all financial institutions have online banking, and many donít charge a fee for it. Some banks charge a monthly fee of around $10-$15. And some banks will waive the fee if you have direct deposit or you maintain an account balance at a certain threshold. Read the details carefully, and feel free to shop for another bank if yours doesnít offer what you want at a cost that is comfortable for you. Itís typically easy to set up online banking once you have an account. You may be able to set it up instantly from your financial institutionís website, or you may need to speak to someone at the branch to do it initially.
Safe banking online
- Be sure you are on a secure web page before sending sensitive information such as user names and passwords, social security numbers, credit card and bank account numbers online.
- Unsecured email is not the place to communicate this type of information - it may be intercepted by prying eyes or malware. Understand your financial institutionís security practices; this information can usually be found on their web site.
- Encryption is the process of scrambling private information to prevent unauthorized access. When a transmission is encrypted, the browser may show a lock or key icon somewhere on your screen.
- Passwords or personal identification numbers (PINs) are unique to you and should be changed often. Avoid using easily guessed passwords such as birthdates, addresses, or names of children or pets - these are typically figured out by thieves who know anything at all about you.
- Also be careful who you trust with your passwords and PINs; donít give it to anybody that you wouldnít trust with your credit card or a signed, blank check. Change it immediately if you think someone may have found it out.
- And finally, be sure to keep your secure with up-to-date virus protection and physical access controls.