How to Check if an Online Bank is LegitimateBank.pro Magazine Editor
In the past, opening an online bank account, getting cash, or depositing checks required a physical trip to the bank. As soon as debit cards and ATMs became available, we stopped going to the bank as frequently. At some point, banks introduced websites that let you deposit checks with only a click of your camera and send money online. Banks that only operate online exist today. Fewer fees and interest rates are available from online banks than from their brick-and-mortar rivals.
Yet you also undoubtedly wonder if online banks are secure when you transmit money through cyberspace. You should conduct some research to ensure that the bank you are dealing with is reliable. Below is a deeper look at how online banks safeguard your funds as well as what you are able to do to make sure they do.
What is an Online Bank?
Online banks are banks that function solely virtual. You handle your finances using your phone or laptop instead of their branch networks, frequently visiting an ATM whenever you need cash. Using the help of this strategy, online banks can cut down on the significant overhead expenses related to bank branch networks. These savings are then passed on to you in the shape of greater annual percentage yields (APYs) and cheaper fees. They are essentially the same as regular banks other than this. Moreover, they also take measures to safeguard your financial assets.
How Will You Know That an Online Bank Is Legitimate
See The Company’s Website and Client Testimonials
To begin, go through the company’s website to see if anything appears wrong. Be sure there are no glaring mistakes on its “About Us” page, such as numerous misspellings that would indicate the website was put up in a hurry. Moreover, Google the bank to seek for client feedback. If you can’t locate any reviews or the ones you can discover say it’s a fraud, don’t go there.
Read: LEI Number Explained
Confirm the FDIC insurance
The majority of trustworthy banks have a “FDIC insured” notification in the website footer. Nonetheless, it’s advisable not to use this as the only proof that the bank is legitimate. When checking whether an online bank has FDIC protection, use the BankFind tool provided by the FDIC. You may do a search using the bank’s name, FDIC certification number, or website. You should generally avoid it if you can’t discover anything about your bank here. However, remember that if you deal with an online bank that is connected to a traditional bank, both organizations may use the same FDIC certificate number. In that case, it’s possible that you’ll need to look up the physical bank’s information.
Research the Safety Precautions the Online Bank Takes to Safeguard Your Funds
If you can’t find any information about how a bank protects its customers’ money on its website, you can always contact the bank directly to inquire. Furthermore, ask about two-factor authentication. Also, make sure that the URL starts with “https” rather than “http.” The additional “s” signifies that the website’s data is encrypted and hence difficult for hackers to access.
How to Protect your Money When Using Online Banking
Digital banking is becoming standard practice, whether you choose a digital bank or a physical one. Additionally, even while banks take reasonable steps to safeguard customer data, you must likewise take security measures to secure your own personal data. Here are some pointers to assist you in doing that while navigating through your mobile banking app or internet banking:
Enter the site URL of your bank into your browser every time. If you prefer not to do this, you can bookmark it. Don’t click any links that are given to you by email or text. This is most likely a scam. Never rely on a public wifi network for financial transactions. This is one method through which hackers can access your financial information. Use a private, password-protected network once you reach home.
Choose a secure password, and change it sometimes. A mix of capital and lowercase characters, as well as certain numbers and symbols, should be included in your password. Do not record it. There is a possibility that it will be stolen or lost.
Implement two-factor authentication. Although if your bank does not mandate two-factor authentication, set it up nevertheless. You won’t spend much more time doing the additional step, but it can help safeguard the data you share. This can assist you in catching scammers before they potentially damage your money.
Identifying Online Bank Account Scams
Scams involving online bank accounts are simple to identify when you remember these four words: No, banks never ask that. The key to recognizing whether something sounds or seems suspect is knowing the questions that reputable banks would never ask you. For instance, the following three typical phishing scam instances are rife with “Banks Never Ask That” warning signs:
- Text Message: Any texts you get purporting to be from your bank are scams. Always keep in mind that a respectable bank would never request your confidential info by SMS, regardless of whether the text asks you to sign in or provide your PIN number.
- Email: Be wary of emails that request that you click on dubious links or give your personal data. Even though the sender claims to be from your bank, the message is actually a ruse to obtain your private information. Similar to text messages, a trustworthy bank still wouldn’t haphazardly request your details over email.
Will your bank ever contact you on the phone to check your account or PIN number? No! It is never a question banks pose. Just hang up and contact your bank immediately at a number you trust if you ever have any doubts about a caller’s legitimacy.
In fact, you may begin by noting that it’s crucial to confirm the legitimacy of the bank you’re interested in registering a bank account online. Before opening an online bank account its essential to pay attention to reviews, website and FDIC certificate of the bank of interest on order to proof its legitimacy. Additionally, you can use bank finding tools to confirm if your bank of interest truly exists.
If you already using an online bank, it’s also important to keep your account safe by only logging in to your bank using private internet, using a strong password and using the two step authentication.
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