Are Internet banks as safe as brick-and-mortar financial institutions?

Greenleaf Financial Group Internet banks have improved many consumers’ banking experiences. Interest rates are often higher and services more convenient. Still, safety concerns are valid, though they are no less relevant for Internet-only banks, traditional banks, or those that are a combination of the two. For your financial security, check on any bank regardless of its type. Here are factors to consider: >> FDIC membership: From a protection standpoint, Federal Deposit Insurance Corp.

membership should be your No. 1 consideration. If a bank fails, the FDIC will step in and cover deposits up to $100,000. This total includes all checking and savings accounts and certificates of deposit owned by one person at the same bank. If you exceed this total, use more than one bank or, for married couples, have accounts in separate names. Even if the FDIC seal is on the bank’s Web site, visit www.fdic.gov and click “Bank Find” for verification.

>> Online security: When banking online, look for a closed padlock or key image that indicates your transactions are encrypted. Also, since no bank will contact you by e-mail about a problem, ignore those fake bank e-mails. >> Better offers: Financial institutions such as E*Trade have attracted consumers with high interest rates. However, many customers’ deposits were invested in subprime loans, potentially endangering their value.

Since risky approaches increase the chance of failure, be skeptical when one bank’s rates are significantly better than others.