Top 3 Reasons Why Online Banking is Safer Than You Think (2024)

FAQs

What are 3 advantages of online banking? ›

Online banks take various precautions to keep your money safe, including FDIC insurance, data encryption, multi-factor authentication, and more. Determine whether a bank is legitimate using the FDIC's database. Check for complaints with the CFPB, reading online reviews, and researching the bank's security features.

Technologies and security at online banks

The safest online banks and credit unions use cutting-edge tools and technology to protect your money and identify and prevent unauthorized access to your accounts. Standard security measures used by online banks include the following: Antivirus protection. Firewalls.

With some basic precautions, online banking can be both convenient and offer security features that protect your personal information and money. Many banks offer two-factor or biometric authentication, use end-to-end encryption and monitor for unauthorized access.

The Bottom Line

Trading your brick-and-mortar bank for an online checking account has pros and cons. The pros include higher yields, lower fees, and high-tech features that help with account maintenance and budgeting. The cons include more difficult access to customer service, as well as online security concerns.

Online banking advantages include a range of additional features that traditional banking interactions don't. For example, you can check your account balances, transfer funds between accounts, pay bills, deposit checks, and manage your account settings from your computer.

The lack of overhead gives internet banks advantages over traditional banks, including fewer or lower fees and accounts with higher APYs. Internet banks lack personal relationships, no proprietary ATMs, and more limited services.

High End Encryption

All transactions you make take place in a very secure and encrypted medium, using advanced digital technology, which ensures that the data reaches from its start point i.e. the consumer point to the end point without being compromised.

Thanks to encryption and secure Internet connections, online banking is a convenient and safe way to handle your money. Peer-to-peer payments are often safer than paying someone with a paper check. Paying bills online—particularly if you use autopay—can save both time and money.

Is your money stuck for a set time? ›

Is money stuck for a set time? No, money in a traditional savings account is not stuck for a set time. Unlike certificates of deposit (CDs), which have specific time restrictions and penalties for early withdrawals, savings accounts offer more flexibility.

JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.

Kyle Marchini, senior analyst in fraud management with research-based advisory firm Javelin Strategy & Research: "I give bank apps on mobile devices the edge when it comes to safety,” Marchini says. With computers, he says, it is easier to inadvertently download malware from hackers.

Identity theft poses a persistent threat, with cybercriminals seeking to exploit and abuse your personal information, often for financial gain. Online banking users are especially vulnerable to this risk.

Encryption. Banks secure your transactions and personal information online using encryption software that converts the information into code that only your bank can read.

Cons of online banks

You are more likely to incur ATM fees if the online bank has no ATM network or is part of a small network. You can't deposit cash unless the bank is linked to ATMs that accept cash. The number of products tends to be more limited at online banks. Some only offer a few types of accounts.

Some disadvantages of online banking include: No physical branches when you need help. Challenging cash deposits. No access to foreign currency.