How to Confirm an Internet Banking Company is Legitimate

When you set up your first internet banking account, you may have reservations about it. After all, anyone could set up a website, claim to be a bank, and fraudulently take your money. There are some precautions you can take to be sure your online bank is a legitimate one.

Start by going to the bank’s website. There, you can get the information the bank gives you about their banking credentials. The bank’s official name should be listed. There may be articles describing the history of the bank, including their internet banking history.

There should be an address where the headquarters can be found. There will be a base of operations somewhere, even if it is a virtual bank internet banking operation. If they are on the up-and-up, they will not be hesitant to tell you about their FDIC coverage.

It is easy to check a bank’s FDIC insurance. If you see the words “FDIC Insured” or “Member FDIC” or the FDIC logo, you might be on the right track. However, it is wise to go a step further. Go to the source to find out if the internet banking company is really affiliated with the federal insurer.

The FDIC has its own data base that includes all of the banking institutions, including internet banking companies that are covered by FDIC insurance. Just go to their “Bank Find” site to find out if your bank is one of them. You can start your search with the name of the bank or its address.

If your internet banking company is on that list, the FDIC will provide you with a whole list of helpful information. You will learn when the bank became insured, and the number on its insurance certificate. You will find out the location(s) of your bank and its official name. You will find out what government entity regulates that bank.

If your internet banking company does not appear on the list, it is time to go directly to the FDIC. They will be concerned with the legitimacy and safety of that bank. It is probably not wise to put your money in an uninsured bank. At that point, it is better to look for another internet banking operation.

Once you do sign up with an online bank, be cautious about how you use their internet banking website. Some unscrupulous people will use the internet to get your banking information. They will do this when you log onto your bank’s website.

The trick these dishonest people use is to set up a website that looks like your bank’s website. They have a URL that is very similar to your bank’s URL. Then, they sit back and wait for you or others to make a mistake typing in your bank’s URL that will get you to them.

From there, the fraudster will track all the information you type into the opening page. They will be able to get your user name, your password, and any other information you type. The best way to make sure you are dealing with your legitimate bank is by being very careful when typing in their site address.

If you are to trust your internet banking company, you must take precautions to assure yourself that it is a respectable business. Once you do that, you can bank with ease.

Largest Internet Banks

Internet banks, no matter what size, guarantee one thing: accessibility. You can have access to your Internet bank anytime and anywhere as long as you have an Internet connection. You can transfer funds from one account to another, pay your bills, and view your bank transactions and balances whenever you want. Some Internet banks even hook up to vendor sites so that you can purchase your groceries and shop for a new pair of shoes.

Large versus small

Looking for an Internet bank that you think would suit you? Are you unsure if you want to go with the big banks or the small banks? Are you afraid of the instabilities of smaller banks? Or do larger banks intimidate you? You should choose a bank that can address your requirements and that you feel comfortable with. Here’s a comparison so you can make an informed decision.

Smaller banks tend to offer a narrower ranger of online services compared to their larger counterparts. With a smaller pool of funds, smaller Internet banks do not have the flexibility to offer high interest rates. But the opening and maintaining balance required by these banks are lower, too, so it is much easier to open an account with them. If you only need basic Internet banking services such as local fund transfers, deposits, crediting, etc., then these banks may be sufficient.

Large banks, on the other hand, can compensate for many of the shortcomings that their smaller constituents cannot fulfill. Interest rates continue to rise whenever the amount of the transaction rises. Larger banks have a farther reach, allowing them to have more associates worldwide.

The infrastructures of larger Internet banks are also substantially different. Aside from accessing your account, you can also gain access to your accounts via SMS using your GSM handy phones. You can also send instructions to the bank through this technology. Larger banks tend to have more elaborate security systems to ensure the safety of your money.

The History of Internet Banking

Internet banking is a very important part of our new global economy. Most people really seem to take this modern convenience for granted. This article seeks to describe the history leading up to where we are today.

As early as the early 1980s, there was something called ‘distance banking services over electronic media’ which were really the forerunner to the modern online money transfer services. By the late 80’s it became popular to refer to these systems as “online” because they were accessed by connecting to a terminal with a keyboard and monitor (kind of like a PC) in order to connect to the financial systems through a telephone line.

Another precursor to online banking was called ‘Home Banking.’ This form of banking is what we would call telephone banking today but through a computer-like setup. People would call in to a service through the phone line and then send instructions to the bank using touch tone signals.

Online banking services began for the first time on a wide scale in New York City. In 1981, four New York Banks tried offering home banking services. Unfortunately, they jumped on the wrong bandwagon and tried to use the ‘videotex’ system which ultimately was a failure in the US just like beta-vision. It did, however, take off in France.

The United Kingdom also tried to offer early online banking services in 1983 through the Bank of Scotland. This system was similar to the New York System, but used a different brand of terminal to connect to the phone lines. This was commonly known as ‘Homelink’ and it allowed people to view their statements online, transfer money and pay bills. That is pretty amazing for 1983! Especially since the bill payment system worked very much the same as today’s online bill-pay systems that come standard with online financial accounts.

In the 80s there really wasn’t an internet as we know it today. It was really more of a loose web of computers which connected to each other through phone lines. However, the first financial institution to offer internet banking services to all of its members was Stanford Federal Credit Union. That did not come until 1994, another decade after these home banking systems started.

Today, there are many financial institutions that only do business through the internet. They do not have physical locations or tellers or bank branches. The world is certainly changing, but we will never be completely without physical banks.