Tips for Safe Banking
Over the Internet
As use of the Internet continues to expand, more
banks and thrifts are using the Web to offer products and services or otherwise enhance
communications with consumers.
The Internet offers the potential for safe, convenient
new ways to shop for financial services and conduct banking business, any
day, any time. However, safe banking online involves making good choices – decisions
that will help you avoid costly surprises or even scams.
This article offers information and tips to help you if you are thinking about or already using online banking systems. We will tell you how to:
- Confirm that an online bank is legitimate
and that your deposits are insured
- Keep your personal information private and secure
- Understand your rights as a consumer
- Learn where to go for more assistance from banking regulators
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.
Read key information about the bank posted on its website. 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.
Protect yourself from fraudulent websites. 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.
Verify The Bank's Insurance Status.
To verify a bank's insurance status, look for the familiar FDIC logo or the words
"Member FDIC" or "FDIC Insured" on the website.
Some bank Web sites provide links directly to the FDIC's Web site to assist you in
identifying or verifying the FDIC insurance protection of their deposits.
Also remember that not all banks operating on the Internet are insured by the FDIC.
Many banks that are not FDIC-insured are chartered overseas. If you choose to use a bank
chartered overseas, it is important for you to know that the FDIC may not insure your
deposits. Check with your bank or the FDIC if you are not certain.
For insurance purposes, be aware that a bank may use different
names for its online and traditional services; this does not mean you are dealing with
separate banks.
This means, for example, that to determine your maximum FDIC insurance coverage, your
deposits at the parent bank will be added together with those at the separately named bank
Web site and will be insured for up to the maximum amount covered for one bank. Talk to
your banker if you have questions.
Know Where To Get More Information
About FDIC Insurance.
Don't worry about your deposit insurance coverage if you or your family have less than
$100,000 in all your accounts combined at the same FDIC-insured bank. But if your accounts
total $100,000 or more, find out if they're within the insurance limit.
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