Online Banks: Are They Safe?

November 23rd, 2013 by The JetSetter Team | 2 Comments »

Now, some banks are in business only in an online capacity. There is no physical branch that a person could go to if they chose. It’s an interesting idea, certainly, especially when many Americans can’t so much as name the last time they visited an actual, physical branch of their bank.

Banks like Ally Bank, EverBank, CapitolOne 360, and Go Bank are capitalizing on this model, opting for services offered only by way of the Internet. For many, this raises a concern for safety and security of funds. The brick-and-mortar bank model we’re more familiar with suggests security at least, though experts say that they’re equal in terms of security.

The advantages online-only banks offer are significant—no ATM fees anywhere, higher interest rates on savings accounts, etc—because they have few operating costs as compared to a traditional bank. If this seems like a good idea to you, Jason Hartman recommends keeping the following things in mind.

First, verify that your funds are insured by the Federal Deposit Insurance Corporation, thereby protecting them for up to $250,000 per account holder. Stay on top of potential scams associated with online banking—scammers are quick to jump on new opportunities. Occasionally, they’ll create sites that mirror the bank’s actual site but differ slightly in web address. Be sure you’ve typed in the address correctly, and be wary of emails from your bank containing links—these might lead to fake sites. Finally, make sure that your information is encrypted by looking for the lock or key symbol in your browser that signifies a secure connection.

It might be worth it to check out some of services online banks are willing and able to offer, assuming you’re one to embrace the shift to business online. Low overhead costs may give you the extra money to begin investing, improve your home, or take that luxury vacation you’ve been dreaming about! (http://www.flickr.com/photos/cennydd/2687237902/)


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