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Monday, October 5, 2015

Online Banking Helpful for Seniors

To those of us who didn’t grow up with the Internet, online banking can seem dubious. However, in many ways online banking makes sense for aging brains that occasionally forget to pay bills. You can authorize your bank to automatically pay regular bills, such as those for credit cards or car payments. 

To those of us who didn’t grow up with the Internet, online banking can seem dubious. You don’t see money changing hands; it disappears and reappears from your computer screen. However, in many ways online banking makes sense for aging brains that occasionally forget to pay bills or fail to pay them on time.

With online banking, you can check to see if you paid a bill, or you can set up automatic bill pay for regular accounts, such as credit cards or car payments. If you’re not comfortable having the bank automatically take money from your account, many banks will send you an email and/or text alert to remind you of the due date, so you can pay bills yourself. Such alerts will also warn you if your account balance is low.

In addition, you can monitor your account for fraud, especially if you’re suspicious about recent activity. Online bank statements immediately show transactions, including those for an Xbox that you didn’t order. You can also transfer funds between accounts online.

Conveniently, there’s no need to keep track of your finances in a check register and balance your checkbook every month. On your online statement, you can see your balance up to the last transaction shown (even written checks). In fact, if you need to go back several years (for tax purposes, for example, or to find the date for that last mortgage check), you can pull up the information from your online account.

You can even deposit checks online by using a scanner or fax machine to scan the check and send the image to your bank. Or, use the camera on your smartphone to take a picture of the check and deposit it electronically. In fact, you can do most banking activities on a smartphone, so you can use the time while waiting in a doctor’s office to take care of banking business. Many institutions offer free mobile phone apps you can download and use to connect directly to your bank.

Those with older parents who are no longer comfortable with their financial abilities can use online banking to view their parents’ online statements and check to make sure their finances are in order.

Best of all, with online banking, you can save yourself a trip to the bank and avoid wear and tear on your car.

Is Online Banking Safe?

Because hackers could cause significant financial damage if they broke through a bank’s security system, institutions that provide online banking use the highest security system allowed by U.S. law. Still, there are actions you can take to help keep your money safe.

When selecting a bank, especially one that has no physical offices, watch out for copycat websites that deliberately use a name or Web address similar to, but not the same as, the real financial institution. The intent is to lure you into clicking onto their website and giving your personal information, such as your account number and password. Always check to see that you have typed the correct Web address for your bank before conducting a transaction.

Avoid sending sensitive information, such as account numbers, through unsecured email. Encryption is the process of scrambling private information to prevent unauthorized access. To show that your transmission is encrypted, some browsers display a small icon on your screen that looks like a "lock" or a "key" whenever you conduct secure transactions online.

Use a complex password for your online banking account. Your password should be unique to you and should be changed regularly. Do not use birthdates or other numbers or words that may be easy for others to guess.

Regularly update general security, such as virus protection, over your personal computer. Contact your hardware and software suppliers or Internet service provider to ensure you have the latest in security updates.

Check with your bank to see if its online banking site supports two-factor authentication, which allows identification only by using two different components, such as your bank card and PIN at a cash machine. With some banks, you can register your smart phone, which can be vulnerable to theft, for authentication.

Avoid public networks when making a transaction. Even though online banking sites use strong encryption technology, using the wireless access at your favorite café, for example, can potentially leave you vulnerable to hackers.

Check your bank statements as often as possible to make sure you haven’t been hacked.


“7 Tips for Safe Online Banking,” Sept. 15, 2014, PCMag

“Is Online Banking Safe?,” Motley Fool

“Safe Internet Banking,” FDIC

Online Banking Helpful for Seniors 
was featured in the September 2015 Senior Spirit Newsletter. 

Blog posting provided by Society of Certified Senior Advisors