1. Confirm that an Online Bank Is Legitimate and that Your Deposits Are Insured
Whether you are selecting a traditional bank or an online bank that has no physical offices, it’s wise to make sure that it is legitimate and that your deposits are federally insured. Here are tips specifically designed for consumers considering banking over the Internet.
a) Read key information about the bank posted on its Web site.
1. Most bank Web sites have an “About Us” section or something similar that describes the institution. You may find a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage from the FDIC.
b) Protect yourself from fraudulent Web sites.
2. For example, watch out for copycat Web sites that deliberately use a name or Web address very similar to, but not the same as, that of a real financial institution. The intent is to lure you into clicking onto their Web site and giving your personal information, such as your account number and password. Always check to see that you have typed the correct Web site address for your bank before conducting a transaction.
c) Verify the bank’s insurance status.
3. To verify a bank’s insurance status, look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site.
Look at your bank’s Web site for information about its security practices, or contact the bank directly.
Encryption is the process of scrambling private information to prevent unauthorized access. To show that your transmission is encrypted, some browsers display a small icon on your screen that looks like a “lock” or a “key” whenever you conduct secure transactions online. Avoid sending sensitive information, such as account numbers, through unsecured e-mail.
Passwords or personal identification numbers (PINs) should be used when accessing an account online. Your password should be unique to you and you should change it regularly. Do not use birthdates or other numbers or words that may be easy for others to guess. Always carefully control to whom you give your password. For example, if you use a financial company that requires your passwords in order to gather your financial data from various sources, make sure you learn about the company’s privacy and security practices.
General security over your personal computer such as virus protection and physical access controls should be used and updated regularly. Contact your hardware and software suppliers or Internet service provider to ensure you have the latest in security updates.If you have a security concern about your online accounts, contact your bank to discuss possible problems and remedies. Remember that nonfinancial Web sites that are linked to your bank’s site are not FDIC-insured.