Are Online Banks Safe?

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There’s a lot to love about online banks. Many offer high APYs, lower fees, valuable rewards, innovative money-management tools and 24/7 access to your money. But are they safe, or should you put your money elsewhere? 

In short, yes. Read on to learn more about how online banks work and the measures they have in place to keep your funds safe. 

Mobile Banking Done Better

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What Are Online Banks?

Online banks are financial entities that do not have brick-and-mortar locations. Instead, all business is handled electronically. Cost savings are typically passed on to customers through more generous earnings on savings accounts and competitive interest rates on loan products. 

Online Banks: Are They Really Banks?

Yes, some banks only operate online. There are also financial technology companies, like Current, who partner with FDIC-insured banks to offer online banking services to their customers. This arrangement is referred to as neo banking. 

Online Banks vs. Traditional (Brick And Mortar) Banks

Online banks conduct all operations online. However, brick-and-mortar banks have physical branches you can visit. Many also offer online banking services for added convenience. 

Pros of Online Banks

Highest APYs Nationwide

You’ll generally find some of the highest annual percentage yields at online banks since they can cut costs and pass these savings on to account holders. 

Large ATM Networks

Most reputable online banks are members of extensive ATM networks, like All Point. This means account holders have access to several thousand fee-free ATMs nationwide. In addition, some online banks take it further by reimbursing fees incurred at out-of-network ATMs. 

Lower Fees

You can also expect to pay little to no fees with an online bank account due to lower operating costs. This means you probably won’t be subject to account minimums or monthly maintenance fees. 

Access Anytime, Anywhere

Online banks offer mobile banking apps that allow you to keep tabs on your money 24/7 by logging into your account from your mobile device or another electronic device. 

Feature-Rich 

Account-holders also enjoy the same convenient features as individuals who do business with brick-and-mortar banks and enhanced financial management capabilities. 

Mobile Banking Done Better

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Learn how the Current mobile banking app makes it easy to manage your money and tap into all the perks the platform has to offer.
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Discover Current Spend Account and read about how to open one, what benefits can give and how to manage your bank account online from the app.

Better Value and Rewards

Some online accounts also offer cashback and member incentives for every dollar spent using your debit card. These rewards are easy to earn and could add up over time. 

Better Experience And Service

Most banks and credit unions offer customer support during the week. However, they typically aren’t available after hours unless there’s an emergency. But with an online bank, you could have access to account representatives around the clock on both weekdays and weekends. 

Are Online Banks Safe?

Yes, online banks are safe for several reasons, including safety and security features, secured bank connections and transactions, and government-backed deposit insurance. 

Safety And Security Features

Below are some of the vital safety measures online banks implement to protect your information from hackers and fraudsters: 

  • Encrypted data to minimize the occurrence of financial fraud 
  • The ability to pause and resume transactions to prevent unauthorized spending 
  • Biometric Authentication (i.e., Touch ID or Face ID) that integrates with your smartphone 

Secured Bank Connections and Transactions

All transactions conducted by online banks are done through a secured connection. Furthermore, auto fraud detection and AI-driven security features are in place to keep your information safe. 

Your Money Is Insured By Partner Banks

Many online banks are insured by the Federal Deposit Insurance Corporation (FDIC). Some neo banks also offer FDIC insurance through financial institutions they partner with to provide financial services. 

Tips To Keep Your Account Safer 

Although online banks are safe to do business with, there are actions you can take to make your account more secure: 

  • Avoid accessing your bank account on public wi-fi networks. 
  • Create a strong password and update it often. 
  • Keep your online banking passwords secure. 
  • Confirm the bank’s website is secured by checking to see if they use an HTTPS web address. 
  • Use multi-factor authentication to access your account. 
  • Secure your laptop, desktop and other electronic devices with unique passwords. 
  • Opt to receive real-time purchase and fraud alerts. 
  • Shield login authentication codes from others. 
  • Never respond to suspicious phone calls, phishing emails or text messages requesting your bank account information or sensitive personal information. 

How to Choose an Online Bank

Are you ready to upgrade your banking experience? There are several online banking options, but Current is an option worth placing at the top of your list. It’s an innovative financial technology platform that offers FDIC-insured bank accounts through Choice Financial Group, Member FDIC. 

Account-holders enjoy faster direct deposits, generous cashback rewards, overdraft protection, fee-free ATMs, and so much more. Plus, you can earn up to 4 percent APY on your money. 

Get started with Current today by downloading the mobile app on Google Play or the AppStore and opening an account. Register by entering your mobile number; signing up only takes a few minutes of your time.

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