Are Online Bank Accounts Safe?


Quick Answer

Online banking has the potential to be safe, states the Federal Deposit Insurance Corporation. However, consumers should take steps to ensure banking institutions are legitimate, deposits are insured, personal information is secure and transactions are safe before using online banking services.

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Are Online Bank Accounts Safe?
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Full Answer

Whether online banking is offered through a traditional bank or one that exist solely on the Internet, a consumer must determine the bank is genuine, according to the FDIC. Each institution's website should have a description, a history and a physical address for its headquarters. Consumers should carefully type website addresses, because some fraudulent companies use names and addresses that are very similar to authentic banks.

If deposits are properly insured, a bank's website displays the label "Member FDIC" or "FDIC Insured," the FDIC explains. Consumers can verify this affiliation using the BankFind page on the FDIC website, which is a searchable online database of FDIC-insured institutions. If insured bank accounts contain less than $250,000, they are completely protected. However, accounts containing more funds often have limited coverage.

To make safe transactions, consumers should use the bank's online security features, the FDIC instructs. These include encryption icons, personal identification numbers and passwords. In addition, consumers should maintain their computers' security through virus protection and limit who has access to their computers.

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