Is online banking safe?


Quick Answer

Online banking is safe as long as consumers follow some common-sense precautions when using online banking services, according to the Federal Deposit Insurance Corporation. If the online bank is insured through the FDIC, online banking accounts are protected just like accounts at an FDIC-insured brick-and-mortar bank are.

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Is online banking safe?
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Full Answer

Any online bank participating in the FDIC insurance program displays either the FDIC logo or the words "FDIC Insured" or "Member FDIC," explains the FDIC. Deposit accounts of up to $250,000 are protected from loss by the FDIC.

Consumers can further protect their online banking information by following basic Internet security steps, explains U.S. News. Consumers must keep personal information, such as user names and passwords, private and never click on hyperlinks inside emails from strangers or emails purporting to come from the bank. Banks never ask for consumers to verify funds or to confirm password or user name information through email. Consumers must also beware of emails from a friend asking for this type of information, because a friend's email account may have been hacked. Such hacker tactics are called phishing.

Only deposit accounts are protected from loss, according to the FDIC. Investment and insurance accounts, such as mutual funds, stocks, and annuity or life insurance policies, are not covered by FDIC insurance and may lose value. If a consumer has more than $250,000 in deposit accounts in one bank, he should contact the bank to see if his accounts are covered and to what limit.

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