9 Tips for Safer Online Banking

By Susan Shain
November 3, 2020

So you’ve been thinking about breaking free from traditional banks. Or maybe you’ve recently signed up for an online bank account. 

Either way, you already know some of the major benefits—like the ability to check balances, make deposits, and get paid without ever having to leave your house (or your couch!) You also know the digital route can mean fewer unnecessary fees, since there’s no need for online banks to pay rent on a bunch of brick-and-mortar buildings.

What you might not know? How to make sure your experience is as safe and secure as possible. If you’re seeking both convenience and peace of mind, look no further—we’ve put together some pro tips for safer online banking.

  1. Start with a strong password 💪
  2. Always play detective 🕵️‍♀️🕵️‍♂️
  3. Avoid public wifi 🙅‍♀️🙅‍♂️
  4. Prioritize apps 📲
  5. Choose a bank with top security
  6. Sign up for account alerts 🚨
  7. Update your tech 📆
  8. Stay vigilant on social 👀
  9. Read your statements (really!)

Start with a strong password 💪

Having a strong password is, hands down, the easiest way to boost your security while banking online

Your password shouldn’t be a real word, as some scammers use algorithms to search through the dictionary trying various entries. Instead, your password should be gibberish: at least 14 characters, with a mix of upper- and lowercase letters, numbers, and symbols. 

Since no one’s got time for all that, we recommend using a password management tool like LastPass or 1Password. It’ll create a super strong password for you—and then remember it, too, so you won’t have to. And as an added bonus, choosing a robust password means you can change it a little less frequently

Always play detective 🕵️‍♀️🕵️‍♂️

When it comes to banking scams, thieves often pretend to be your financial institution in order to lure information out of you. They may approach you in a variety of ways: emails, phone calls, texts, or social media messages. 

The emails, for example, will look like they’re from your bank; they might say there’s been suspicious activity on your account and ask you to click a link to verify your identity. If you do, you’ll be taken to a fake site that allows the thieves to steal your username and password

Via phone or social media message, the fraudsters may say your account’s been compromised, and ask for your PIN or Social Security number to “restore it.” 

While the government has some good tips for recognizing and avoiding email and phone scams, you should, as a baseline rule, initiate every contact you have with your bank. If you receive an inbound call, hang up and dial the number on the back of your card before offering up any personal information. If you receive an email from your bank, don’t click any links — instead, type your bank’s website directly into your browser before logging in.

🔒 Tip:Before making any financial transactions online, including shopping and banking, look for an “s” — as in https:// — at the beginning of the web address. That little “s” indicates the site uses encryption to protect your data. Many browsers also hide the “s,” displaying a lock icon instead.

Avoid public wifi 🙅‍♀️🙅‍♂️

Tempted to check your bank account while sipping on a latte at your favorite coffee shop or waiting for a layover at the airport? While it might be convenient, it’s not advised. 

Why? Hackers can easily intercept any data you send while you’re connected to a public wifi network, including usernames, passwords, and credit card numbers. So seriously, even though it might seem like no big deal, you should never, ever do it.

If you really need to check your bank balance in a public location, rely on your phone’s mobile data rather than the wifi network. Or, if you’re a frequent road warrior, consider signing up for a virtual private network (VPN) that ensures a secure connection wherever you go. 

Prioritize apps 📲

One of the biggest cybersecurity risks is unknowingly downloading malware: aA kind of software that tracks your every keystroke. 

Since this is more likely to occur on your computer, some experts recommend using your bank’s mobile application rather than its website. Lucky for you, online banks have some of the sleekest apps around.

As the biggest risk to your phone’s security is downloading an unknown app, make sure you know what you’re putting on it. When downloading your bank’s app, for instance, don’t use the search function in the app store; instead, click the download link directly from your bank’s website. That way, you can feel confident you’re getting a legitimate, up-to-date version of the app. 

Choose a bank with top security

The best online banks make your security their top priority. When selecting one, here are a few things you should look out for: 

  • Multi-factor authentication: Make sure your bank verifies your identity in multiple ways whenever you log in. (Think: texting you with a one-time passcode.) Though not foolproof, requiring this extra step can make your account more secure. 
  • 128-bit AES encryption: We won’t put you to sleep describing what this is — just know that your bank should encrypt your data using a standard of 128-bit AES or higher
  • Biometric scans: Some mobile banking apps require biometric data, such as a fingerprint or face scan, before letting you log in. Bonus points to banks that offer this! 
  • FDIC insurance: Any bank you use should be backed by the Federal Deposit Insurance Corporation (FDIC) – a government agency that guarantees your funds up to $250,000 in the case of bank failure. Since not all online banks have this insurance, check to be sure that yours does. 

Lastly, keep an eye out for online banking services that take these security measures a step further. Chime, for instance, lets you toggle your debit card on and off from within the mobile app, offering complete control over when it’s available for use.

Sign up for account alerts 🚨

Another feature that will greatly improve the safety of your online banking? Account alerts. 

One of the benefits of banking online is that you can opt to receive notifications when your balance drops to a certain level or when a transaction or transfer is made. 

Alerts are only effective, however, if you A) sign up and B) pay attention. You’ve got good reason to do so: If you fall victim to an unauthorized electronic transfer, federal law says you’re only liable for up to $50 — if you report it within “a timely fashion.” If you don’t notice the fraud for a while, you could owe anything from $500 to “unlimited.” 

Update your tech 📆

Keep getting alerted that your browser, operating system, or phone is out of date? 

Instead of x-ing it out for the millionth time, run the updates ASAP. While it might feel like a hassle in the moment, having up-to-date technology gives you the best shot at keeping your info safe.

That’s because hackers often take advantage of susceptibilities in old technology. Updates patch these holes, thereby offering you more protection. 

If you need further convincing, just think back to the disastrous Equifax breach, which could’ve been prevented if the company had only updated its software.

Stay vigilant on social 👀

Love strutting your stuff on Snap and IG? Fraudsters love it, too, because it allows them an unprecedented glimpse into your private life.

Although you’re probably not posting your Social Security number on your stories, you might be giving away other information that could help thieves break into your bank account. Pet’s name? Check. Birthday? Check. Email address? Check again. 

Even if you make your profiles private (which you definitely should!), be on the lookout for third-party applications, especially on Facebook. Since these don’t have the same security protocols as the platforms themselves, they can lead to vulnerabilities in your data

Read your statements (really!)

We get it: Checking your accounts all the time may seem tedious. But the thing is: Some thieves make a series of small fraudulent withdrawals to see if money is in your account. 

In other words, even if that random $2 charge doesn’t seem problematic, it could soon lead to something bigger. 

So be sure to scan your statements regularly, and contact your bank stat if you see a charge you don’t recognize. (With an online bank, all of your statements are available in just a few clicks, so you really have no excuse!)

By using the nine tips above, you’ll get to experience all the conveniences of online banking — while also enjoying peace of mind. If you want to learn a bit more, here’s how to choose the best online bank for you. Do your research — and rest assured that when the time is right to switch, you’ll find a lot of great options out there!

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Susan Shain is a freelance writer who's been covering personal finance for eight years. She was previously on staff at The Penny Hoarder and Student Loan Hero, and has also been published by Marketwatch and Lifehacker.

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