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 follows appropriate CIP (Customer Identification Protocol) procedures 3) the bank or credit union is verified to be federally insured 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 h t t p s://. Most of the time when you browse the Web, you just see h t t p :// in front of the web address. Look the address bar 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 in the bottom left or next to the address bar.

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.

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.

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.

Also, make sure you keep your computer free of viruses and trojans. There are plenty of programs out there. My favorite is Norton’s Anti-Virus and Lavasoft’s Ad-aware. Finally, no financial institution should ask for your private information in an email. Many scam artists will create emails and websites that look almost identical to the real thing (it is called phishing). Don’t ever click a link from an email that wants you to verify your personal information. If you ever have a question, call your institution directly.

For other ideas visit our Banking Online Page.

Chris Duncan is a NASD Registered Representative. He specializes in helping clients find the best and highest CD rates nationwide. His clients include individuals, financial institutions, corporations, and public agencies. Visit us at www.jumbocdinvestments.com

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