Is Online Banking Safe? How to Boost Your Banking Security
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With online banking — that is, managing your bank accounts through the bank or credit union’s website or mobile app — you can monitor your balances to avoid fees, deposit checks, and send money to friends and family. Plus, you can maximize the interest you earn by using online-only banks, which feature the best rates.
The 2024 NerdWallet State of Banking Report showed that 57% of banking customers said online access is one of the most important banking services, and 54% said that mobile apps are among the most important. But another NerdWallet survey revealed that many banking customers are concerned about mobile app security.
Fortunately, you don’t have to trade convenience for security. Banking online is safe when secure bank technology on the back end is met with alert consumers on the front end. As an account holder, you have a role in making sure your accounts are protected. (Skip ahead to learn ways to improve your online banking security.)
How financial institutions make online banking safe
On the back end, banks and credit unions employ policies to keep online customer accounts secure. To protect customers and their money while banking online, standard safety measures that financial institutions use include:
Using anti-virus protection on bank computers. Just as you’d protect your personal computer, banks protect theirs against viruses that could compromise the security of customers’ money and personal information.
Putting up firewalls. Firewalls protect your computer or computer network against cyberattacks by preventing unauthorized access or untrustworthy traffic.
Practicing fraud monitoring. Banks and credit unions that offer online banking monitor account activity and flag anything that seems suspicious or possibly fraudulent.
Using website encryption. Website encryption scrambles data so only the intended recipient can read it.
Offering multifactor authentication. Many banks and credit unions offer multifactor authentication, meaning you’ll need to complete two or more steps to log into your account. Skip ahead to read more about this safety measure.
Automatic logout. Your financial institution will log you out of the app or website if you haven’t been active for a few minutes, which helps protect your account from being seen or accessed by others.
If you bank online, chances are your financial institution uses these security measures.
» Looking for safe online accounts? Explore NerdWallet's list of best online checking accounts
Our Nerds say:
"Online banking is as safe as traditional banking — when you use a financial institution that takes ample security measures and when you proactively use best practices yourself."
Ways to improve your online banking security and protect yourself
Here are steps you can take on the front end as a consumer to make sure your account is as protected as possible when banking online.
1. Choose an institution that uses industry-standard security. You probably already want a bank or credit union that offers accounts with low fees and high interest rates. Add “top-notch security” to your checklist. Then, make sure your online accounts are backed by robust technology, like the measures mentioned above: firewalls, fraud monitoring and website encryption. Security features might be outlined on the bank's website or fine print. If you're having trouble finding that information, reach out directly to the bank.
2. Use multifactor authentication. Here’s how MFA works: When logging in, instead of just asking for a username and password, the financial institution requires you to provide another piece of information, or factor, to verify yourself. It could be a unique passcode sent to your smartphone as a text message, or even your own fingerprint. The point is, it’s another layer — one not as easy to steal as a password.
Many of the larger online banks — and traditional institutions with online accounts — adhere to these standards, so it should be easy to find a bank or credit union that fits the bill.
» Want to compare the top options? See our list of the best online banks
3. Skip public Wi-Fi for private banking. With a public network, you can’t be totally sure who sees what you send online, unless each page you visit is encrypted. The security of your private home network is ideal. If you have to log in while away from home, consider using your cellular data plan instead of Wi-Fi, or a virtual private network, known as a VPN. However you choose to log in, check for webpage encryption by making sure the address on the browser starts with "https" — the "s" signals that the page is secure.
4. Keep anti-virus software current. Make sure yours is up to date on your home computers, laptops and mobile devices. You should also update your device’s software when new versions come out, as they often include security patches
5. Use long and complex passwords. Use combinations that are difficult to guess, such as a mix of uppercase and lowercase letters, numbers and symbols. Government websites generally recommend a minimum of anywhere from 12 to 16 characters for passwords, for example. But the longer and more complex your password is, the harder it will be to crack and the more likely it will be to provide protection against hackers. Consider using a password manager, which can be a helpful tool for generating and storing unique, complex passwords that are hard to crack.
6. Set up text alerts. Many institutions let customers choose to receive alerts by text or email whenever large transactions are made on their accounts or if the balance drops to a certain amount. If they see a purchase or transfer they didn’t make, customers can protect their account against further fraudulent activity by reaching out to the bank immediately. Customers have up to 60 days from the date on their bank statement to dispute any unauthorized charges on it.
» Concerned your account has been breached? Act fast to minimize the damage
What are the risks of online banking?
Some risks of online banking could be your account getting hacked or the website or mobile app not working or being down for maintenance when you need it. That’s why it’s important to bank with an institution that uses strong security measures to protect your accounts and to take security precautions yourself. By taking key steps, you can securely take advantage of the conveniences of online banking.
Is online banking safe enough?
Online banking should be safe, as long as you take steps to protect your accounts and make sure your bank uses industry-standard security technology.
You can also keep your money safe by watching out for banking scams. For example, fraudsters often use so-called phishing scams, in which they send out emails or text messages pretending to represent a financial institution in the hopes of hooking an unsuspecting consumer.
The message might suggest there’s a problem with your account and ask for your bank password or Social Security number. Or it might say you won $100 million, but your account information is needed to wire the funds. If you reply, the criminal could use the information to illegally make purchases or withdraw money from your account. Don’t respond to emails or click on any links that are too good — or bad — to be true.
» Read more about common banking scams and what you can do to avoid them
Frequently asked questions about online banking safety
Here are answers to common questions about safely banking online.
How safe is online banking?
Online banking is safe when your bank or credit union uses secure bank technology on the back end and you take security precautions on your end.
How can I protect myself when banking online?
When banking online, you can protect yourself and your money by taking a few key steps, including choosing a bank or credit union that uses industry-standard security, subscribing to text or email alerts for your accounts, avoiding use of public Wi-Fi and choosing complex passwords.
Which bank has the most secure online banking?
There’s no single bank or credit union that stands out among the others when it comes to online security. There are many banks and credit unions that offer industry-standard security practices. Institutions that offer a number of protective measures — including multifactor authentication, alert notifications and website encryption — can be considered safe and secure for online banking when used along with your own security precautions.
Learn more about online banking
Learn more about online banking safety
