What You Should Know About Online Banks Before Starting an Account
Online banks don’t have physical branches, but they still provide a range of financial products and services. These include payment tools, checking and savings accounts, as well as money management tools.
To keep your accounts secure, seek out online banks that implement a range of security measures, which may include SSL encryption, firewalls, and antivirus programs. However, there is a lot more to learn so read on before applying for an account today.
How Online Banks Work
Online banking works by providing you with easy access to your bank accounts and related services from any internet-connected device. With online banking, you can check your balance, transfer money from one account to another, pay bills and even avoid overdrafts by setting up alerts that are sent via text or email.
With online banking, your checks aren’t sent through the mail or copied by someone else; according to this article, your bank computer encrypts all transactions before sending them securely back and forth without having to store any information. This helps keep your bank information safe and secure while also reducing the risk of identity theft.
Online banks typically incur lower operating expenses since they lack physical branches and need fewer staff members, allowing them to pass along those savings to you through higher APYs on savings and certificates of deposit accounts.
Avoid Phishing Attacks
Online banks are particularly susceptible to phishing attacks. These scams typically use social engineering techniques, which leverage people’s trust to collect sensitive information or access their devices and accounts.
Cybercriminals use phishing attacks to obtain passwords, credit card numbers, bank account details, and other personal data. They have the capacity to spread malware or ransomware onto recipients’ computers which can cause havoc and even steal your identity.
Phishing scams can affect people of all ages and backgrounds. Whether you’re a senior or an employee, there are a few easy steps you can take to protect yourself:
Never send confidential or sensitive information via email or text message without first verifying it with the sender of the request. Reputable organizations and people will never request this type of data through emails or text messages.
Always be wary of the email sender’s name, address, and phone number. Phishers may use fake emails to attempt to get you to click on their links or download malicious software.
Scammers often create fake emails and websites that appear legitimate, using similar fonts and colors as the real thing. This helps them fool victims into believing the email or website is coming from their bank, a trusted organization, or a government agency.
Check your account statements regularly to confirm that money is actually leaving your bank account and detect any unusual activity or transactions. Doing this can protect yourself against phishing attacks and prevent having to reset your password.
If you receive any suspicious email or call, do not hesitate to reach out by phone and follow up by contacting your financial institution directly. Be sure to report the incident to local law enforcement agencies and place fraud alerts on your credit files to closely monitor things.
A reliable way to identify phishing emails is by looking for warning signs such as incorrect grammar, misspellings, and inappropriate language. Although the email may appear genuine from a friend or colleague, if its tone seems too casual then be wary.
Look for the FDIC Seal
The FDIC Seal is an essential symbol that a bank is secure. It shows the institution has been insured by the agency, protecting customers in case of failure. You can find this seal on the front of a bank’s building, website, or letterhead.
When using an online bank, it’s wise to verify if the institution is insured by the FDIC. Doing this can provide peace of mind that your money is secure from theft, fraud, and other potential threats.
Since 1933, the Federal Deposit Insurance Corporation has kept Americans’ money safe through its deposit insurance program. Its primary mission is to foster public confidence in America’s banking system and guarantee prompt access to insured deposits when an FDIC-insured bank fails.
Similar to auto and home insurance, banks insured with this coverage pay a premium for coverage. This includes banks that help invest in stocks, bonds – like Bonds Online, and various other portfolio investment ventures. The amount charged depends on several factors such as the size and riskiness of the insured bank.
All of America’s 60,000 or so commercial banks can access this type of insurance program. The government funds this initiative through fees paid by those banks.
One of the primary duties of the FDIC is to inspect and monitor all institutions insured by them for safety, soundness, and consumer protection. They also supervise large financial institutions as well as manage receiverships.
The FDIC has other duties that make it a crucial and efficient regulator of our financial institutions. These include creating insightful publications to guide their supervision and regulation within the industry.
For example, the FDIC offers an online search tool to help you locate a financial institution insured by them. Simply type in the name of the bank and other pertinent facts like its location or web address, and you’ll be presented with a list of all FDIC-insured banks nearby. This site provides numerous other helpful tools and resources like its Small Business Lending Survey.
Know Your Account Numbers
Bank account numbers and routing numbers are essential elements in online banking. They specify where money should be deposited and withdrawn, which allows banks to process countless transactions efficiently. Without them, they would not be able to do as much business as they currently do.
Your bank account number, typically between 8-12 digits long, uniquely identifies your particular account. It can be located at the bottom of checks near your bank’s routing number and also on monthly statements or through online banking portals.
Routing numbers are nine digits long and identify the bank you’re associated with. They can be found on the bottom of checks or by performing a Google search for your bank’s name and routing number.
If you cannot locate your bank’s routing number, reach out to their customer support team or visit a branch near you. They can give you the routing number and answer any queries that arise.
You can download your online account information into financial management software such as Quicken, QuickBooks, or Microsoft Money. This service helps keep your accounts current and accurate, plus it enables you to request automatic notifications about new balances if they exceed a specified threshold.
When making purchases or paying with your checking account, you may be asked for both your account number and your bank’s routing number. These pieces of information are essential in ensuring money deposits into the correct accounts and correct payouts.
Additionally, you may be asked for your Social Security number or other personal information to confirm you’re the account holder. This data serves to identify you in case of an account takeover or other fraudulent activity.
Online banking relies heavily on these numbers, yet they can be tricky to locate. That is why it is essential to learn how to locate them and protect them at all times.
Do Your Research
Online banks provide a convenient alternative to traditional brick-and-mortar banks. Customers can access accounts and financial products from any computer or mobile device, with most providing excellent customer service support.
These banks typically charge low fees or may even be free to use. It is essential that you read all the details and thoroughly assess each bank’s offerings prior to opening an account.
The primary disadvantage of online banks is the absence of face-to-face interaction with a bank teller. If you find it difficult to talk to someone in person or have an incredibly hectic schedule, an online bank may not be suitable for your needs.
Another drawback of online banking is the time it takes to process a check deposit. Many banks don’t have physical branches, meaning checks may take several days to clear.
Additionally, some online banks may only have a limited ATM network and charge fees for using it. This could mean you’ll have to pay out-of-pocket for each withdrawal; thus, do your research before opening an account with any given bank.
Though some online banks may seem promising, others may not provide what you need or be suitable for your business. Be sure to research their fees, examine their website and app, as well as contact customer support to determine if their offerings are suitable for your nonprofit organization.
Finally, online banks may not always offer the most secure solution (https://www.forbes.com/advisor/banking/how-to-protect-your-online-banking-information/). They may not have the newest security measures in place and/or use outdated browsers that are no longer supported.
For small businesses and nonprofit organizations, online banks may be the ideal solution. They tend to be more cost-effective than physical banks and give you access to banking anywhere with an internet connection.
Online banks typically provide more transparency than their physical counterparts, offering you access to your account balance and transactions, as well as the option to deposit checks or make payments electronically. Plus, many provide helpful financial monitoring tools that enable you to stay on top of your budget and finances.
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