Online banking, sometimes known as digital banking, has obvious conveniences, but some people may be concerned about sharing personal financial information and conducting banking transactions through a website or mobile app.
By following a few best practices for online banking, you can reap the benefits without having to worry about the risks.
How online banking works
Online banking allows you to check and manage your accounts via a computer, tablet or smartphone. You can complete financial transactions without having to visit a physical branch or work around a bank’s business hours.
To access online banking, you need to have a login ID (this could be the account number on your cheques or bank card) and password. Depending on your bank’s processes, you may also have to complete security checks, such as entering a code you receive in a text or email, when logging into your account.
Online banking transactions are often instant, although it depends on the type of transaction. Your account information is updated regularly, which makes it easy for you to keep an eye on your spending instead of waiting until the end of the month to receive a statement.
Many online banking apps also offer extra features to help you manage your finances and stay within your budget.
How to set up online banking
Setting up online banking is typically quick and easy. The process is different depending on whether you already have an account with the bank or whether you’re opening your first account.
If you’re already a client
- If you are a client of a Canadian bank or credit union don’t yet have access to online banking, it’s easy to set it up by yourself. You can also get help from a bank representative either over the phone or in person at your local branch.
- Use a secure internet connection to visit your bank’s website. Most bank websites have a “sign in” or “log in” button on the home page along with another option that may say “enroll,” “register” or “sign up for online banking.” Click that option and follow the steps.
- Enter some contact information and your bank card details to establish your identity. You need to have access to a phone or email account to receive an activation code, which you enter in the appropriate box online.
- Create a password, a username if you’d like and either answer or create some security questions and answers for additional protection. You’lll be asked to read and agree to an electronic access agreement.
The whole process should only take a few minutes if you have your banking details handy.
If you’re opening a new account at a new bank
- Once you’ve chosen the type of account and the financial institution, go to the bank’s website and find a button that says something like “open an account” or “apply.” Click the button and enter your name, address and other contact information.
- Verify your identity. Many banks, especially online-only banks, allow you to do this by taking a photo of your ID and uploading it to their website. However, some banks may require you to visit a branch with the original ID (not a copy!).
- Complete and submit your application and start using your new online banking account.
Is online banking safe?
Safety is always a concern when it comes to personal finances, and many people are wary of the idea of storing their financial information online. However, online banking is just as safe as banking at a brick-and-mortar branch. Most financial institutions have policies in place to protect you against any unauthorized or unapproved transactions.
Plus, online banking often offers extra security features like having alerts sent to your phone or email for suspicious activity in your account or the ability to put a hold on any transaction if you suspect something is wrong in your account.
However, you’re responsible for protecting your login details and password. If you give that information to anyone, including your spouse or child, you may risk losing the protection offered by your bank and become responsible for any unauthorized transactions.
Many Canadian banks are members of the Canada Deposit Insurance Corporation, which insures most deposits up to $100,000 in case your financial institution fails. If your bank is a CDIC member, your money is protected whether you bank online or in person.
Safest ways to bank online
Online banking is safe when used properly. While protecting your personal information is an important step, you can take other steps to protect your banking information from potential scams and hackers.
To make online banking as safe as possible, follow these tips:
- Don’t use public Wi-FI or public computers for online banking.
- Make sure to use a strong password that cannot be easily guessed.
- Use different passwords for different financial accounts. Your banking password should be different from other online passwords. Don’t use common info that can be easily found online, such as your pet’s name, as part of your password.
- Don’t allow your mobile device or computer to remember your password. Take the time to enter all the information manually every time you log in.
- Don’t send personal information to your financial institution by email.
- Don’t click links or respond to any suspicious messages that seem to come from your bank.
- Keep an eye on your account activity to make sure everything looks OK and there are no suspicious transactions, like withdrawals that you didn’t make.
Setting up multiple bank accounts can help you budget, maximize savings and optimize taxes. Having more than one savings account can support financial goals.