In today’s world where so much of our time and money is online, knowing where to keep your money safe is important. I don’t want to go to work every day just to have someone steal it from me and then not be able to afford my bills. This naturally got me wondering if my Savings Account is safer than my Checking Account.
A Savings Account is safer than a Checking Account because there isn’t a debit card or cheques attached to your Savings Account. All funds need to be transferred out of your Savings Account before you can use them. Both Savings Accounts and Checking Accounts are still insured by the FDIC and Electronic Funds Transfer Act against unauthorized or fraudulent transactions.
Access and Exposure are the two factors affecting the likelihood of an unauthorized transaction. Your Checking Account has more ways to access it and also gets the most exposure to the world in just through use. Every time you use your debit card you are exposing your account hopefully securely.
According to INC.
There were 2.5M people hacked in 2018.
Knowing what protections you have is becoming more important than ever.
Compare Risk to Your Savings Accounts and Checking Accounts
Lowering the potential Access and Exposure of all your accounts is an important way to help protect your money. There are several ways to access your accounts and because of this, it opens your Checking Account to more exposure.
The real difference between a Checking and Savings Account is access to your money. You only have access to your Saving Account through certain avenues while your checking account is meant to be used for everyday transactions.
Because your Checking Account is meant for everyday transactions you have more access to it. Generally, if you want to get money out of your Savings Account you need to either call or go online and transfer the funds to your Checking Account. This adds a layer of protection that your Checking Account doesn’t have.
There are several things you can do to further protect both of your accounts. Doing any or all of these options can greatly decrease the likelihood of someone stealing from you.
- Use strong passwords for online access changing them often.
- Set up two-step authentication for access.
- Keep track of all transactions and cards.
- Notify your bank or Credit Union if you see any suspicious activity.
How Someone May Steal From One of Your Accounts
In order to get access and Steal from you, a potential hacker may break into your online banking through the internet or app. Fake apps are being made every day that are designed to try and steal information.
They will need to get access to some of your information and then use it to gain access. If in the event a hacker gains access to your online banking they will still need to take the extra step of transferring money out of your Savings Account before being able to steal it.
The money in your Checking Account, however, they would be able to transfer right away.
Another way would be if a potential hacker had access to your routing number and account number from a check you have attacked to your Checking Account. They could then impersonate you and try to steal from only your checking account.
Know that they would need BOTH numbers to be able to do that and it is becoming increasingly hard to impersonate people with checks.
What Protections do Savings Accounts and Checking Accounts Have?
There are two main protections that Savings Accounts and Checking Accounts have. The FDIC (Federal Deposit Insurance Corporation) insures both accounts as well as the Electronic Funds Transfer Act.
Both of these organizations are there to help protect you from fraud and/or institutional bankruptcy.
The FDIC is primarily protecting your accounts from bank or institution failure. It’s not very common for banks or financial institutions to go bankrupt but, it can happen. If it does, the FDIC will reimburse you however much you have in your accounts up to $250,000.
Q: What is the FDIC?
A: The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your insured deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
You can view the FDIC FAQ here.
The FDIC will protect both of your accounts in the event that the insured banking institution fails. For example, if you have $100,000 in your Savings Account you are insured for the $100,000 plus the interest accrued. This will usually be reimbursed either the next day or within a few days.
The Electronic Funds Transfer Act
The Electronic Funds Transfer Act limits the liability from lost or stolen cards and fraudulent transactions/withdraws. This also provides protection to consumers making transactions including:
- Automatic Withdraws
- Unauthorized Transfers
Access device is a card, code, or other means of access to a consumer’s account or a combination used by the consumer to initiate EFTs. Access devices include debit cards, personal identification numbers (PINs), telephone transfer and telephone bill payment codes, and other means to initiate an EFT to or from a consumer account.
You can view the whole EFTA (Electronic Funds Transfer Act) here.
Checking and Savings Accounts are some of the most secure places you can keep your money but you still need to be doing your part in paying attention to your accounts and cards.
Know that BOTH your, Checking and Savings Accounts are secure and safely insured. You still need to do your part to protect your accounts from potential hackers.
Change your passwords often, keep track of your cards, and always be proactive about keeping your information safe. For an AMAZING and secure Savings Account, you can’t go wrong with a CIT Savings Account!
You will have the protection and flexibility to make all of your saving goals come true!