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Is Online Banking Safe?

By R. Kayne
Updated May 17, 2024
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Banks now make it possible for customers to do most of their banking online, paying credit cards, utilities, loans, mortgages, and even transferring money between accounts. Customers can save postage, paper, time and gasoline, and that’s just good business. But with fraud and identity theft on the rise, is online banking really safe? Given a few precautions, the answer is probably yes.

To bank online a customer first sets up login credentials at the bank’s website. Once logged in, the customer can access all of his or her accounts at that institution along with relative statements or bills. With a few clicks of the mouse a payment can be made by transferring money from a savings or checking account. The savings or checking account need not be at the same institution. The customer supplies the bank account number and a bank transfer is initiated between the two institutions.

A secure environment is provided for online banking, noted by the https at the beginning of the website’s address. The “s” indicates that the connection between the website and the customer’s computer is secured by point-to-point encryption. Data travels between these two points in cipher. If someone were to “steal” information en-route, they would see unreadable gibberish.

There are precautions to take, however, to make online banking safe. The first rule is never click through to a banking site via a link in email. The email might be a phishing scam, taking unsuspecting people to a fake website that looks exactly like the real thing. By setting up a fake banking site, thieves can capture usernames and passwords customers enter in an effort to login. These usernames and passwords can be used by the thieves at the real site to gain access to financial accounts and funds.

Even when sure that an email is legitimate, go to a banking site through normal channels as a matter of practice. Also note that banks do not ask for sensitive information through email. If the email asks for any kind of response or information, call your bank to verify using a phone book. Do not use phone numbers supplied in the email.

Secure online banking is safe over a wireless network, as the encryption used will prevent your information from being broadcast in readable form. However, it’s a bad idea to do online banking from someone else’s computer. A work computer, friend’s computer or public computer might have spyware, rootkits or keylogger programs running. A keylogger records everything typed into the keyboard, often transmitting the information to a remote third party who has infected the computer without the owner’s knowledge.

Along these lines, clean your computer with a few good scanners before starting online banking. Even if you run an antivirus program that looks for viruses, Trojans and keyloggers, many of these programs don’t search for rootkits or spyware. Use spyware and rootkit scanners reviewed and recommended by websites such as PCWorld, TuCows, ZDNet and MajorGeeks. Sticking with tried and true, recommended software will ensure you don’t unintentionally infect your computer while trying to clean it.

With a clean computer you’re ready to roll into online banking and experience the ease of paying bills online. Keep usernames and passwords secure, and if you are going to write them down, keep them in a private place. Once you’ve tried online banking, you’ll never look back.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By latte31 — On Oct 20, 2010

Bhutan-Business online banking works the same way as a regular account online. You just have to have a deposit account and an expense account.

I know that Bank of America offers a free business account, but you have to use the business debit card that they give you at least once a month or they will charge you $17.00 per month as a maintenance fee.

By Bhutan — On Oct 20, 2010

Crispety- Online banking services like Bill Payment are great because the money is automatically drafted from your account on a set schedule and you learn not to miss this money. This is a great way to get starting in retirement savings.

SunTrust online banking services and Barclays online banking even allow you to open a brokerage account for investing within or outside of a retirement account.

Most banks are looking to be a one stop shop for their customers so that you will do all of your banking in one place.

By Crispety — On Oct 20, 2010

Moldova- I think online banking services are secure and very convenient. You can transfer funds from one account to another, and you can set up automatic Bill Payments so that you don’t have to worry about writing a check or missing a payment deadline.

In addition, you can view previously written checks and manage your account balance online. All financial institutions have a secured server so your information is relatively safe.

You can always verify it with the web address. The http should be followed by an S for secure. Online banking accounts are safe and most banks offer free online banking as an added convenience to its customers.

By Moldova — On Oct 20, 2010

Snappy-The same thing happened to my husband, but it was with Ebay. Somebody was asking my husband to update the Ebay account or it would be deactivated. It looked exactly like the Ebay site, so I know what you mean.

The best thing to remember that no legitimate bank will ever ask you for such personal information like that, they usually will send you a letter in the mail if they need any form of documents from you. You were smart in contacting your bank.

By snappy — On Jan 18, 2010

I've gotten a couple of phising emails from my "bank" before. If I hadn't already been informed about the things to look for, I would have fallen for it too. It looked totally legit, had my banks logo, read the same way REAL emails from them read, had the proper phone numbers etc. The only thing wrong was it was asking to verify my password in order to "re-activate" my account.

I called the phone number on the back of my bank card to ask about my account status to see if there really was something wrong..of course there wasn't and they asked me to forward the email to them.

It would have been SO EASY to fall for it though, it looked so real!

When in doubt call your local branch and tell them about the email and ask if there really is a problem with your account, they will ALWAYS be happy to help you!

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