How Safe are Online Banks?

Posted by Mrs Money on November 9th, 2010

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The other day I was talking to my mother about how all of our savings and emergency fund is at ING.  I have been an ING customer for years, and have had nothing but good experiences with them.  They offer a really competitive rate on their high yield savings accounts- of course it’s not much now, but what savings accounts are paying a good rate now?  I really like banking with ING because they don’t require a minimum balance and no monthly fees.  I’ve also got a few accounts set up with them for specific purposes, like car insurance, escrow, and our emergency fund.  It helps me keep those expenses separate and make sure I have enough money for each event.

My mother was concerned about the safety of using an online bank.  She doesn’t do online banking at all and I don’t think she ever will.  That’s fine.  She just said I may want to think about moving my money to a brick and mortar bank because it’s safer.  With all the bank failures over the past couple years, I don’t know if I trust a brick and mortar bank over an online only bank like ING.

Of course, after she mentioned it I got worried.  What if my information got stolen and someone logged in and added a new bank account that wasn’t actually mine?  They could steal all my money.  Of course, I’m not too worried about someone transferring money to my main checking account, as I would notice a large deposit in my checking account right away.

I know that online banks work hard at keeping their software updated to prevent stolen identities and hacked accounts.  I truly hope no one I know ever has a bad experience with the safety of online banks.  With ING when you log in you have to enter your customer number, wait for your special image and phrase to show up, and then enter your pin using the keyboard numbers.  It’s just a 4 digit pin versus a regular password, and that concerns me.  I haven’t had any problems for over 5 years, so I don’t think I should be so concerned.

I guess my generation is used to online banking and doing things online that involve money.  Pretty much everyone I know that’s my age uses online banking, paypal, and other means to move money online.  It’s just the norm, so there really isn’t much apprehension about the safety of online banking.  I know that people are concerned about the safety of online banking but they trust that the banks are doing everything they can to protect their clients’ identities and account information.

I hadn’t really given it a second thought to banking strictly with ING as far as our savings accounts go.  I haven’t had any problems with security, so why worry now?  I have to admit that I have been considering switching our account (or at least part of it) to a brick and mortar bank in town.

Do you use an online only bank like ING? Are you concerned about the safety of online banks?

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15 Responses to “How Safe are Online Banks?”


  1. Meg says:

    I do use ING online, and I love it! I’ve just started, so things may have changed since you set up your accounts, but I have a six digit pin, not four, and I also have to answer two security questions (like ‘who is your childhood best friend’). Also, I like that with ING you enter your pin with the mouse, not the keyboard. You can also select the “hide my typing” feature so that your entries aren’t visible to onlookers (not that I use it in public, but that makes me feel better about that idea).

    [Reply]

    Mrs Money Reply:

    Meg- You are exactly right, I have to enter my pin with the keyboard, duh. ;) I don’t know why I said that.

    I have loved ING for quite a few years now!

    [Reply]

  2. Karen says:

    I don’t think it would be any easier to steal your identity from an online bank than it would from a brick and mortar bank. All of our information is electronic everywhere these days anyway, and most brick and mortar banks allow costumers to do a lot of their banking online, too. The only difference is that you don’t have the option to walk into a branch with ING.

    Oh, and as far as the sign in goes, the reason you can sign in just with your customer ID and pin is because the site recognizes your IP address and computer. If you try to sign in from a location the site doesn’t recognize, you have to answer to security questions in addition to entering your pin for added security. So don’t worry!

    [Reply]

    Mrs Money Reply:

    Karen- Great point. I never looked at it that way. I am good at worrying so it comes naturally to me. I think I should relax about it! ;)

    [Reply]

  3. Tia says:

    I have used ING for my emergency fund for several years. I was just thinking about opening another account with them to save for Christmas spending throughout the year.

    My Dad makes the same safety comments but, like you, I just hadn’t really worried about it. The way I look at it, its not as if a brick and mortar bank is taking my cash and holding onto it until I come back for it. Banking is banking in my opinion. :)

    [Reply]

    Mrs Money Reply:

    Tia- Definitely great points! I think I just need to be smart about where I log in and not worry too much about it! ;)

    [Reply]

  4. Heather says:

    I agree with Karen – your info at your brick-and-mortar bank is just as readily available as your info at ING.

    I don’t do banking wirelessly (i.e. iPhone, or via wifi), but I don’t feel at all unsafe otherwise banking electronically.

    [Reply]

    Mrs Money Reply:

    Heather- I like your tips about not banking wirelessly. That does seem a little less secure than a regular connection. I didn’t even think about comparing my regular bank’s online banking to ING’s. Duh! :)

    [Reply]

  5. Jessica07 says:

    There’s nothing wrong with brick and mortar, and likewise, there’s nothing wrong with online. Your mother understands how brick and mortar functions, because she can see the operators. Our generation is more familiar with HOW all that online software works to keep our information safe. We place our trust in our understanding. The trick is to learn to balance out our sense of security with a good level of trust and caution.

    [Reply]

    Mrs Money Reply:

    Jessica07- It’s funny how things vary from generation to generation. It’s going to be interesting to see how the next generation does things when they are our age!

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  6. Daddy Paul says:

    I do not think I could use an online only bank. I need a brick and mortar bank to deposit checks and get cash and change.

    [Reply]

    Mrs Money Reply:

    Daddy Paul- I do have a brick and mortar bank as well as the online bank. With ING you have to have a brick and mortar bank. :)

    [Reply]

  7. I keep my emergency fund in an ING account and don’t have any concerns about it being safe. I love the convenience and feel it is very secure.

    [Reply]

    Mrs Money Reply:

    Kay Lynn- I didn’t realize that entering your pin with the mouse was another security precaution. I feel pretty safe with ING. :)

    [Reply]


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