4 Security Myths About Online Savings Accounts

With increasing fears of fraud, ATM skimmers, and identity theft, people are more cautious than ever when it comes to their financial safety. It’s understandable that the concept of a bank that operates entirely online can be a bit scary, but, in reality, they’re just as safe as any brick-and-mortar traditional bank. Before you miss out on the higher rates an online savings account has to offer, let’s take a closer look at some of the most common misconceptions.

Here are the four biggest security myths—and the truth behind them:

1. My money in an online account isn’t insured, like in a traditional one

Just because a bank is online doesn’t mean your account is not FDIC insured. As long as the bank features the FDIC logo on their website and/or can be found with the official FDIC BankFind location tool, accounts come with the same protection you would receive at a brick and mortar bank.

2. If you haven’t heard of the bank, it’s not safe

Take a moment and count how many banks you can name. Was it 10, 20, or even 30? That’s just a drop in the bucket. There are actually more than 4,700 FDIC-insured banks in the US right now—many of which are online-only banks offering better value for your dollar than their better-known counterparts.

3. If something goes wrong, there’s no one to help

While online banks don’t have physical branches with in-person tellers, they still carry a full team of financial experts who monitor your accounts for fraud and are easily accessible with just a quick phone call. While branch tellers may have a line of people waiting for their assistance, online bank team members can concentrate exclusively on you.

4. If their rates are too high, it’s a scam

Offering rates with more than 10 times the returns of traditional bank savings accounts right now, online bank rates can often seem too good to be true. So, what’s the catch? There is none. Online banks are able to offer much higher rates because they don’t carry the same overhead as traditional banks, which have to contend with real estate and maintenance costs and branch manager and teller salaries. Online banks’ capital savings are your savings’ gain! But it’s always a good idea to do your homework and verify the validity of any online bank before opening up an account.

Now that you know there’s no reason to be concerned about the security of online savings accounts, it’s time to find the one that also offers you a great rate with the security of FDIC insurance—and without the fees—like BrioDirect’s High-Yield Savings account.