Online savings accounts are FDIC insured. If the bank were to fail, your money (up to $250,000) would be protected. Online banks are treated the same as any other financial institution in terms of government protection.
Keep reading below to find out about online savings accounts being FDIC Insured.
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Are Online Accounts Safe?
Online banks are considered just as safe as traditional banks. Not only are they insured by the FDIC, online savings banks also take their own measures to protect their clients privacy and personal information.
Pros of Online Accounts
Online accounts have a variety of benefits such as:
- Higher Interest Rates:
- Higher yields are one of the main perks of online savings accounts. If you secure a higher yield on your savings, you can grow your funds more quickly.
- Lower Bank Fees:
- Online banks often feature no monthly maintenance fees.
- However this may require you to maintain a minimum balance.
- Online Convenience:
- Easy access to all your funds from the convenience of your phone or computer.
- Easy Transfers:
- Many online banks make ACH transfers free and easy.
Cons of Online Accounts
As always there are negatives to something:
- No Physical Buildings:
- As an online bank you cannot physically go see a teller. All issues you have will have to be dealt with online.
- Difficult Withdrawals:
- Online banks usually do not offer ATM services and may charge for withdrawals.
How to Protect Your Online Accounts
While online banks are already very secure, it does not hurt to take measures to protect your accounts your self.
Use methods such as:
- Don’t Access Your Account on Public WiFi:
- Using public Wi-Fi won’t necessarily give someone instant access to your info, but people who are proficient with technology can find a way to access any information you’ve sent through a public network.
- Be Careful of Email Scams:
- A popular way for scammers to target you is through email.
- Scammers disguise their email address to look like it came from your bank.
- Never click on suspicious links in an email. Call your bank directly to confirm whether they need information from you.
- Update and Change Passwords:
- Try to make your password a unique such as a combination of letters, numbers, and symbols. The more random your password, the more secure it is.
- Check Your Banking Activity:
- Pay attention to your banking activity to make sure there are no fraudulent charges.
Conclusion
Most online savings accounts are FDIC insured, but it always helps to make sure. Even if your bank is FDIC insured be sure to take your own steps to protect your accounts!
Additionally, If you are interested be sure to check out our list of bank bonuses, saving rates and CD rates!
