Banking Online, Is It Safe?
Before going to far, I would like to make it clear that I believe banking online is safe assuming the following are true: 1) the web site uses 128-Bit SSL encryption 2) the bank or credit union is verified to be federally insured 3) the bank or credit union follows appropriate CIP (Customer Identification Protocol) procedures and 4) the staff is approachable, easy to work with, takes time to answer your questions and concerns, and handles your info with care.
Does my financial institution use 128-Bit SSL encryption? When you go to the institution's web site and select a button or link such as "register new account" or other similar option, the domain should be displayed with an https://. Most of the time when you browse the Web, you just see http:// in front of the web address. Look at ours above. But when you are doing online banking or purchasing over the web, you want to make sure your information is being transferred securely. HTTPS (Hypertext Transfer Protocol over Secure Socket Layer, or HTTP over SSL) simply means your data is encrypted as it is sent back and forth between your browser and the site you are on. This make it extremely difficult for someone to try to steal your information. If you type in www.usaa.com, the site is displayed as https://www.usaa.com. Banks like Bank of America, Wells Fargo, National City, etc. all work in a similar manner. In addition, your browser should display a little lock image like the one to the right of this paragraph.
Is my bank or credit union federally insured? You can verify your funds are federally covered by visiting the FDIC's or the NCUA's ID web site. You can search by partial name, city, and/or state. This give you assurances that the institution is federally insured. You can also look at various financial information while you are there to see how the institution is doing.
Do they follow proper CIP procedures? Love it or hate it, the US Patriot Act is the law of the land. Financial institutions must verify your identity. If they aren't verifying yours then they aren't verifying the terrorist's next door either. And you certainly don't want them having easy access to the bank or credit union..
Am I treated properly? If they handle you with care, are patient, courteous, etc. then there is a good chance they have picked the right customer service people for the bank. But if they are rude and act like they are doing you a favor, you might want to look elsewhere. If the IT people have the same attitude, who knows how careful they are with your vital and private information.
Okay now that we have established some criteria let's go on with how to manage the online accounts. First, you want to be very careful when creating passwords and usernames. Your password is the one you want to be extremely careful with. Pick something you can remember, but mix it up. Most sites have the password entry case sensitive, as well as, accepting letters and numbers. For instance, you could choose your first, pet's middle name and use a combo of upper and lower case letters with meaningful numbers sprinkled about, like wH2aTE7ver. Write this down in a safe place. I wouldn't recommend saving it on your computer unless you have a password safe program, like Norton Password. Make sure each institution you bank with has a different password. Just keep a central file with a piece of paper where these are written. In this same file, keep printed account records such as account numbers, etc.
Create a spreadsheet or use a software program to track the institution names, contact info, amounts, rates, etc. Don't put account#s here unless the software is itself secure, such as Quicken. Google has a free spreadsheet program (http://docs.google.com). However, software like Quicken helps automate keeping track of all of your accounts.
I personally use Quicken and it has made my accounting for banking, investments, business expenses, etc. easy. It is great at year end. You can run a report for the various categories such as charity and get the totals you need for taxes quickly. Most institutions have a secure direct connect feature that allows you to download your data automatically or allow for downloading the data in the Quicken format.
I set up an on-line savings account with EmigrantDirect. The Emigrant account allows you to link it to another bank account. I linked mine with my checking account at my bank. I can make secure transfers (using the Emigrant site) back and forth into the my linked bank account. You can also set-up automatic transfers.
If you have over $100,000, you can open up multiple accounts at multiple on-line banks. I've heard good things about ING Direct and GMAC. I'm sure other helpful readers will leave other good suggestions.
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