Is Online Banking Safe?: 10 Tips for a Safe Online Bank Account (2024)

Online banking makes managing your money from anywhere easy and convenient. But like all online activities, online banking carries several risks, such as fraud, scams, identity theft, data breaches, and more.

In 2022 alone, the U.S. Federal Trade Commission (FTC) reported receiving 2.2 million fraud reports and estimated $8.8 billion in losses. Meanwhile, in the UK, more than £609.8 million was stolen through bank fraud in the first half of 2022, according to UK Finance.

These figures beg the question: are online banks safe at all? Or should you avoid them completely? How do you mitigate the risks of banking online? Below, we discuss the risks of online banks and the key to secure online banking.

Is Online Banking Safe?

Yes, online banking can be safe if both you and your bank take security measures to avoid fraud and cybercrime.

Most financial institutions invest heavily in protecting their customers. In the UK, the Contingent Reimbursem*nt Model Code encourages banks to reimburse customers who end up sending money to fraudsters. Though subscribing to this code is voluntary, banks can still be subjected to complaints sent to the Financial Ombudsman Service.

There are also laws and regulations in place that criminalize fraud and cybercrime, and governments typically have systems in place for monitoring fraud. For instance, the U.S. FTC offers an online portal for those who wish to report fraud.

As mentioned, however, while such measures help in keeping customers safe when banking online, individuals should still protect themselves against the risks of online banking. The easiest way to do that, is to install the right tools:

• Antivirus software to protect you from malware and computer viruses
• A VPN to protect your banking data from hackers and cybercriminals
• A password manager to keep your passwords secure

We recommend NordVPN Complete for anyone trying to get a grip on safe online banking. It will keep your connection secure, give you basic malware and tracking protection, and allow you to store your passwords with NordPass.

What are the Risks of Online Banking?

The first step to safe online banking is being aware of the risks. Below, we’ve summarized some of the risks faced by your online bank accounts.

Malware

Malware refers to software that infects devices like computers, tablets, and smartphones. Malware comes in many forms. Here are just a few types of malware:

Ransomware, in particular, has proven to be a serious problem in recent years. In 2021, U.S. banks reportedly processed around $1.2 billion in ransomware payments, a significant rise from $416 million in 2021. Cybercriminals pressure banks into paying huge sums, threatening to leak sensitive user data if the bank doesn’t pay the ransom.

Needless to say, the dangers described above come with huge financial implications. Fortunately, you can combat malware infection with your choice of antivirus software.

We regularly test antivirus programs to identify the best software for your device. Topping our list of the best antivirus programs are Norton 360 (for Windows) and Avast Security (for Mac) for their ability to detect, quarantine, and kill suspicious files.

Phishing

Phishing is a form of identity theft that can cost you a lot of money. In a phishing attack, a criminal attempts to gain access to someone’s personal details or sensitive information by pretending to be a party this person trusts, such as their bank. The victim is contacted by this impostor and asked to give sensitive information.

Cybercriminals might send you an email that looks as if it’s been sent by your bank, asking you for your login information. They could also call you or send a text message. Most often, they’ll include a plausible-sounding reason as to why they need certain information. Even so, do not fall for this trick!

You can inspect an email from your bank to determine if it’s a phishing attempt. Here are some red flags to look out for:

• Incorrect or misspelled email address: Fake email addresses will often contain misspellings, weird symbols, or suspicious domains. For instance, a phishing email might be sent from “support@paypal-payments.com”. Paypal’s official website and email domain is “paypal.com” and not anything else.
• Misspellings and grammatical errors in the email body: If the email you received is filled with incorrectly spelled words and other grammatical errors, then that’s almost certainly a phishing email.
• Suspicious links: Links that direct to anywhere but the official bank website have a high chance of being a phishing link.

Compromised mobile apps

Most banks will offer a mobile banking app for their customers. But are bank apps safe?

While many of these finance apps are safe and convenient, they also pose risks because they can be compromised. For instance, you might get a Trojan on your phone when you download an app from an unauthorized source.

There’s also a risk of fake bank apps built to resemble your real banking apps. You might think you’re downloading your bank’s official app — but it might be a fake app that will steal your information and, as a result, your money.

Credit card scams

Credit card scams are one of the most notorious dangers of online banking. These scams can take many different forms, such as:

Never provide your credit card information to people asking over the phone, text, or email. If you suspect that someone is trying to scam you, contact local enforcement and alert your bank.

Data breaches

Data breaches happen when hackers get access to the personal information of large numbers of individuals. Banks are a common target of such breaches because cybercriminals can use their data to conduct massive financial fraud.

Banks and government institutions are always working to combat this threat through better digital infrastructure and cybercrime monitoring. But individuals too can do their part by being vigilant about their passwords and using two-factor authentication.

In the next section, we talk about the best way to avoid data breaches and other risks of online banking.

10 Best Practices for Secure Online Banking

Banks around the world are working hard to ensure safe online banking. However, there are a few safety measures you can take. These tips below will help you decrease the risk of becoming a victim of online banking fraud.

Here’s what you can do to protect yourself while online banking.

1. Change your password often

Use strong passwords, and change them regularly. This is true for all your online accounts but especially important for your bank accounts.

Be sure to use combinations that are difficult to guess, such as a mix of uppercase and lowercase letters, numbers, and symbols. The more complex the password, the better. Such passwords are harder to crack and offer better protection against hackers.

2. Use a password manager

To help you remember your passwords better, you can use a trusted password manager. A password manager can help you create strong and unique passwords and will store your passwords securely. Password managers also let you know when your password is vulnerable and if it needs to be changed.

You can check our ranking of the best password managers for all our recommendations. Top of this list is NordPass, which syncs passwords between devices and protects passwords with XChaCha20 encryption and 256-bit keys. NordPass works natively with all operating systems and has browser extensions for Chrome, Firefox, Safari, Opera, Vivaldi, Edge, and Brave.

There are also free password managers you can try, though you should always be cautious when using free services.

3. Use two-factor authentication

Two-factor authentication (2FA), also known as multi-factor authentication, adds a second layer of security when logging into your online or mobile banking account. 2FA involves passing a second level of verification after entering your login credentials. This verification can be in the form of a code sent to you via email or text message.

2FA makes it more difficult for a hacker to unlock your account with just your user ID and password, thus reducing the risk of your account being compromised. Most banks now enforce two-factor authentication, but in case yours does not, ask them about it and activate it for your account.

4. Sign up for alerts

Most banks offer text and email alerts that can inform you of account actions, such as debit and credit transactions, failed transactions, change in balances, failed login attempts, and password changes.

We highly recommend signing up for these alerts if you haven’t already because they ensure you can keep real-time tabs on your bank account.

5. Avoid public Wi-Fi

We depend on Wi-Fi for a lot of things, and it’s common to connect to public Wi-Fi networks at cafes, airports, hotels, or malls. However, public networks are insecure and can pose risks such as:

• Wi-Fi snooping or sniffing, where hackers use special software kits or devices to “eavesdrop” on all your online activity, such as the webpages you view and the information you fill in online (like your login credentials).
• Man-in-the-middle attacks, where hackers exploit vulnerabilities in the network to “eavesdrop” on your online activity.
• Transmission of your data over unencrypted networks, which makes it vulnerable to hackers.
• Malicious hotspots that look like trustworthy networks but are actually just rogue hotspots set up by cybercriminals. These criminals can then view your personal information when you connect.
• Malware and spyware that cybercriminals can install onto your device through unsafe networks without you even realizing.

We strongly recommend against mobile banking when you’re on a public Wi-Fi network. If you must access online banking or mobile banking with public Wi-Fi, check out our guide to staying safe on public Wi-Fi.

6. Use a VPN

A virtual private network is another security tool that can help protect you when banking online, especially when you’re using a public Wi-Fi network.

A VPN adds a layer of encryption between your device and the internet, providing a secure internet connection. This results in your online activities becoming anonymous and impossible to attribute to your identity. Cybercriminals will have a more difficult time trying to track your movements and stealing your banking information.

We’ve tested dozens of VPNs for speed, security, and user experience. For secure online banking, we recommend NordVPN as it performs consistently in securing and protecting your online traffic. NordVPN is available across devices so you can enjoy secure mobile banking wherever you may be.

You can find VPN alternatives in our ranking of the best VPNs for online banking.

7. Keep your device and antivirus updated

Operating systems constantly receive updates from manufacturers. Developers release security patches to combat new forms of malware and new techniques for scamming.

We recommend that you keep your device and apps updated to the latest software versions. Regularly check for system updates, or activate automatic updates for your device.

8. Access only trusted websites and apps

Websites and apps can be fake or infected with malware, created for the purpose of stealing your personal information. Make sure that you access only well-known websites that you know are safe. Keep these tips in mind:

• Always make sure your bank’s web address has a secure HTTPS connection before you log in to your online banking environment. You can check this in the URL of the webpage. It should always say “https” instead of just “http”.
• Double-check an app’s reviews before downloading it. Also, check who the developer is, and do a quick Google search to see if the developer is a legitimate company.
• Never click on any links or files without knowing exactly what they are.

9. Keep your financial details private

Never share your banking information (such as account pin or password, credit card details, passwords, etc.) with anyone. Generally, to receive money, the sender only needs your account name and account number. All other details should be kept private. Additionally, remember that no bank or government authority will ever ask for sensitive banking information.

Moreover, be wary when entering your PIN at ATMs or points of sale to ensure nobody is looking over your shoulder. Don’t say the number out loud while you type it or keep it stored in your wallet. And lastly, never post pictures of your debit or credit cards on social media because you never know who might see or share this information.

10. Use common sense

On the whole, a few basic measures can go a long way to ensure safe internet banking. Here are some general tips that you should always follow:

• Only transfer money to parties you trust. A money transfer usually can’t be undone without the explicit permission of the receiving party.
• Don’t reuse the login details of your online bank account for other websites.
• Delete suspicious emails or messages without clicking on any links or downloading any files they contain.
• Immediately contact your bank if you receive what you suspect to be a phishing email or a scam email.
• If something doesn’t feel quite right as you’re transferring a payment, don’t complete the transaction.
• Frequently check your online bank account so you’ll quickly spot any peculiarities before they start to cause trouble.

Conclusion: Bank Online Safely With These Security Measures

Gone are the days of going to a brick-and-mortar bank. With online banking, you can conveniently monitor your savings accounts without the need to visit a traditional bank.

However, online banking poses risks, much like other internet activities. If you or your bank aren’t careful, you might fall victim to malware infection, phishing or credit card scams, data breaches, or more.

To keep your online bank account safe, make sure you take steps to protect your account information and your device. Use a password manager to ensure that you have strong passwords, and never share your password and other sensitive information with anyone.

Always inspect texts and emails from your bank to ensure you avoid phishing. Remember to alert your bank if you received a suspicious message or if someone claiming to be from the bank is asking for your account information.

To protect your device, we recommend you activate two-factor authentication and keep an antivirus running on your device to root out any infected files. Never access your bank’s website with a public Wi-Fi network. And to encrypt your data and activity, make sure you use a VPN.

For more information on online safety and privacy, visit our other resources below:

• 10 Tips for a Safer Online Shopping Experience
• The Five Best Cybersecurity Tools to Protect Yourself
• How to Be Safe Online: 8 Cyber Hygiene Tips to Keep You Safe

Nathan DanielsAuthor

Tech Journalist

Nathan is an internationally trained journalist with a special interest in the prevention of cybercrime. For VPNOverview he conducts research in cybersecurity, internet censorship, and online privacy. He contributed to developing our rigorous VPN testing and reviewing procedures.

Mehak SiddiquiAuthor

Tech Journalist

Mehak has been writing for over a decade and is passionate about helping people have safer, healthier relationships with all things tech. She has a master’s degree in communication and is interested in the impact of technology and the internet on global communities.

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