Is it safe to open a bank account online?
Is it safe to open a bank account online? Opening and using an online bank account is perfectly safe, but there is one danger you need to be aware of: bank scams. Bank scams can come in a variety of forms, but they will often be bogus emails and text messages that purport to be legitimate correspondence from your bank.
Online banks offer higher interest rates on savings products and lower interest rates on loans. If you need to deposit cash regularly, you'll likely want the convenience of a brick-and-mortar bank's ATM network.
If they're FDIC-insured, online banks are as safe as traditional brick-and-mortar banks in many ways. You can also take steps as a consumer to ensure your account is as protected as possible when banking online, whether you bank with a brick-and-mortar or an online bank, also called a direct or digital bank.
When you open an account online, you'll need to make an initial deposit, or add money to the account. This step usually involves making a transfer from an existing account, but other options may include mailing a check or money order. And if your bank has local branches, you can visit one to deposit cash.
Online banking is generally safe and not easy to hack — as long as you take the right steps to protect your information. This means setting up strong passwords and changing them frequently, and using additional tools like two-factor authentication to give yourself an extra layer of protection.
- Customer service lacks personal touch.
- Not an option for those lacking access to the internet.
- ATM options may be limited.
- Greater due diligence required to vet the bank.
- Shop around. ...
- 2. Make sure the bank offers online account opening. ...
- Choose your account type. ...
- Provide your personal and contact information. ...
- Sign any disclosures. ...
- Decide how to fund your account.
Due to the open nature of the Internet, all web-based services such as YAB's Online Banking are inherently subject to risks such as online theft of your User ID/UserName, Password, virus attacks, hacking, unauthorized access and fraudulent transactions.
Our picks for the best online banks are SoFi Bank, Discover Bank, Ally Bank, Varo Bank, LendingClub, Upgrade, Alliant Credit Union, FNBO Direct, Zynlo Bank and Quorum Federal Credit Union. You may get a higher annual percentage yield (APY) compared to traditional banks when you choose an online-only bank.
Online banking does have some potential disadvantages. These include a lack of face-to-face customer support, cash deposit services and a risk of technology failures or security breaches.
Do I need my ID to open a bank account online?
Whether you apply for a bank account online or in person, you'll need a government-issued ID and personal details, such as your Social Security number, on hand. (If you don't have a Social Security number, you can still open a bank account — skip ahead for more details.)
Institution | Top savings APY | Top checking APY |
---|---|---|
America Express National Bank | 4.35% | 1.00% |
Ally Bank | 4.25% | 0.25% |
Laurel Road | 5.00% | 0.01% |
Everbank | 5.15% | 0.45% |
- Key takeaways.
- What are the easiest bank accounts to open online?
- Discover: Best for getting cash back on purchases.
- SoFi Checking and Savings: Best for high APY.
- U.S. Bank: Best mobile app.
- Truist: Best for no overdraft fees.
- Bank of America: Best for flexible banking.
- Chime®: Best for bad credit.
Most banking apps offer a bevy of features meant to protect your sensitive information and identity that traditional banking websites might not. Some of these cybersecurity measures include: Encryption: Most mobile banking apps encrypt, aka disguise, sensitive data like login information and bank statements.
Put simply, there is no consensus choice when it comes to a safer option between mobile and online banking. Margarette Burnette, a senior writer with NerdWallet, asked three experts which is safer between using computers or smartphones. The responses were split, favoring either depending on circ*mstances.
- Password-protect all banking access. ...
- Choose strong and unique passwords. ...
- Enable two-factor authentication. ...
- Log out when you finish banking. ...
- Avoid public Wi-Fi. ...
- Don't use a shared computer. ...
- Sign up for banking alerts. ...
- Guard against phishing scams.
Online banks typically offer the best rates and lowest fees of any bank type. Online banks don't offer branches and assume you're proficient with navigating online apps and websites. Read on to compare the pros and cons of online banks. That way, you can choose the right type of bank with confidence.
Allay Consumers' Fears
Consistent with Ponemon Institute's other Privacy Trust studies, the biggest fear consumers have is identity theft (82%), followed by unauthorized access to their bank accounts and telemarketing abuse.
Accounts like SoFi Checking and Savings, Discover Cashback Debit Account, Ally Spending Account, and Betterment Checking are accounts that we consider to be some of the easiest bank accounts to open online.
Proof of identity – current photo driving license, or passport. Personal details – preferred title, full name, date of birth, gender, marital status, nationality. Address details – current home address and how long you have lived there. Contact details – preferred phone number, email address and marketing preferences.
Who is best to open a bank account with?
- Starling personal current account. ...
- Lloyds Bank Club Lloyds. ...
- Co-operative Bank current account. ...
- Nationwide FlexDirect. ...
- Kroo current account. ...
- Santander Edge current account. ...
- NatWest Premium Reward account. ...
- Monzo.
- No Actual Branches. ...
- Tech-Related Service Disruptions. ...
- Concerns about Identity Theft and Security. ...
- Deposit Restrictions. ...
- Faster is Not Always More Convenient. ...
- No Relationship with a Personal Banker. ...
- Limited Services Scope. ...
- Possibility of Overspending.
While it's true that your money is safe in the bank, you should still be aware of and know how to avoid banking scams and bank fraud. There are actions you can take and good habits you can follow to help protect your money.
Bank | Forbes Advisor Rating | Learn More |
---|---|---|
Chase Bank | 5.0 | Learn More Read Our Full Review |
Bank of America | 4.2 | |
Wells Fargo Bank | 4.0 | Learn More Read Our Full Review |
Citi® | 4.0 |
The worst banks are Wells Fargo and Citibank. Wells Fargo is the worst bank overall, with a high percentage of unresolved complaints and loss of Better Business Bureau accreditation. Citibank has a string of high-profile cases involving operational chaos and regulatory fines.
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