Can a Security Token Protect Your Brokerage Account?

Investing, Investments
Can a Security Token Protect Your Brokerage Account?

Online security is a major issue for everyone that frequently uses a computer. You have a separate login for your personal computer, work computer, personal email, work email, Facebook, Twitter, bank accounts, and probably quite a few other accounts as well.

Depending on the sites you frequently use, you probably have several usernames and passwords to remember. Writing them down is a common practice, but incredibly unsafe, especially for financial accounts. But if you don’t write down all these passwords, you probably reuse a few in order to remember them.

To help protect clients from identity theft, and from losing thousands of dollars, some brokerage accounts have decided to use security tokens. There is some variation between models, but they all generate a random passcode at regular intervals, which must match the one expected by the broker’s site.

The following brokers offer security tokens to help protect you from unauthorized trades and wire transfers:

E-trade

E-trade’s security token generates a new 6-digit access code once every minute. The token is meant to be carried on your person at all times, and comes with a keychain ring. This feature is free for all customers that execute at least 30 combined stock and options trades each quarter, or that have over $50,000 worth of assets in their account. If you don’t meet one of these qualifications, or if you would like more than one token per account, each token will cost $25.

Interactive Brokers

Interactive Brokers offers a digital security card that is approximately the shape of a credit card. After you login to the site using your username and password, you are asked for a security code. After entering your secret pin into the security card, it will quickly display the one-time security code, which you must enter within 30 seconds. Otherwise, you have to repeat the process before gaining access to your account.

Schwab

Schwab’s security tokens are quite similar to E-trade’s, in that it regularly generates a random 6-digit passcode and is designed to be carried on your person. However, you can receive one for free, regardless of your account size or trading behavior.