Are Online Savings Accounts Safe?

Online savings accounts are generally very safe. There are many features that keep them that way, from typically being insured by the Federal Deposit Insurance Corporation (FDIC) to the latest security technology.

That can be reassuring news since online savings accounts can offer many perks to account holders. The annual percentage yields (APYs) offered by online banks tend to be considerably higher than that of traditional banks, and these accounts can also offer tremendous convenience, such as being able to move money around with a minimal number of clicks on an app or website.

What Is an Online Savings Account?

You may already think of a traditional savings account as being “online” — especially if, like an increasing number of Americans, you prefer to use your computer or a mobile app to do most of your banking instead of heading to the local branch. In fact, according to an American Bankers Association (ABA) survey released in November 2024, more than half of Americans bank by mobile app than any other method.

Thanks to the popularity of direct deposits and ATMs, many savers seldom see bank tellers anymore, but the banks and their employees are still there to do business.

True online-only banks don’t offer in-person access. They don’t have physical branches, so customers manage all their transactions with a computer, a mobile app, or at an ATM.

Savers can still deposit checks, check their account balance, transfer money, and more. If they have a problem, they handle that online as well or make a phone call to customer service.

Because online banks vs. traditional banks generally have lower overhead costs since they don’t operate brick-and-mortar locations, they tend to pass their savings on to their customers. That means their clients are often charged low or no fees, and they may earn interest rates that’s higher than a traditional savings account.

Consider that as of February 2025, the average savings account annual percentage yield (APY) was 0.41%, while a number of online banks were offering 3.70% or higher for their high-yield savings accounts.

How Do Online Banks Keep Savings Secure?

The digital world can be a dangerous place, with hackers and identity thieves looking for new ways to get their hands on others’ hard-earned savings. Both traditional and online-only financial institutions regularly update the methods they use to protect their customers’ accounts, whether a checking account or savings account.

You may be able to find a list of those security measures on a bank’s website, or you can ask before you open an account. Precautions you might want to look for include:

Secret Socket Layer (SSL) Encryption

Encryption is an internet safety protocol that creates a secure connection when you log in to a site on your computer or with an app.

Basically, your data is scrambled and can be read (or decrypted) only by the intended recipient.

Tip: To be sure a site is using SSL encryption, you can look for a padlock and “https://” at the start of the web address.

Two-Factor or Multifactor Authentication

Two-factor or multifactor (MFA) authentication adds an additional verification step to a normal log-in procedure. With single-factor authentication, you enter your username or email and a password, and then you’re done.

With MFA, you must provide an additional verification credential before you can gain access to your account. For example, a financial site might text or email a one-time-only verification code to your smartphone (or another device you’ve pre-registered), and you must use that code within a limited amount of time to gain access to the account.

Firewalls

Like authentication, a firewall serves as a gatekeeper; it monitors the data coming in and out of a company’s computers and can block unauthorized access from certain websites or IP addresses.

Communication Policies

Your financial institution probably has a policy against asking customers to provide personal information (Social Security numbers, usernames, passwords, PINs, etc.) through unsolicited emails.

This can help customers spot requests that are actually bank fraud efforts and/or phishing scams that use personal information to gain access to financial accounts.

Alerts or Notifications

Some banks may offer different types of alerts that let customers know when there’s unusual activity on an account. (If there’s been a large ATM withdrawal, for example, or the balance drops below a certain amount.) You usually can set up text or email alerts through your account profile or account settings. If you receive a ping that several hundred dollars has been swept out of your account versus your typical $60 withdrawal, you can take steps to protect your account.

Automatic Logouts

If you forget to logout of your online account when you finish your business, your financial institution will probably do it for you. Many sites automatically log out users after a period of inactivity. This can help keep prying eyes from viewing your private information.

Limited Login Attempts

If at first you don’t succeed in logging into your account, you may get a warning from the site that you’ll have a limited number of times to get it right. After that, your account will be locked for a certain amount of time.

This security measure is designed to protect against “brute-force attacks,” when hackers try a variety of password combinations to break into a customer’s account. If this happens to you, the site will likely advise you to wait 24 hours before trying again.

Recommended: What Is a High-Yield Savings Account?

Does the Government Protect Online Savings?

It’s not just financial institutions themselves that are safeguarding online savings accounts. The government helps lower savings account risk in a couple of different ways.

The Electronic Funds Transfer Act

If your debit card is lost or stolen, the Electronic Funds Transfer Act (EFTA) limits your liability for any unauthorized activity in your account.

The limits are based on how quickly you notify your financial institution, so you’ll have no liability if you notify your bank before any fraudulent transactions are made.

•   You’ll be responsible for just $50 if you report it within two business days.

•   You’ll be responsible for up to $500 if you report the loss after two business days but within 60 business days.

•   After 60 days, everything changes. Whether the thief used your physical card or a computer to get your money, if you didn’t report the unauthorized transactions within the 60-day timeline, you could be facing unlimited liability. So it’s important to monitor your account and move quickly if you see anything that troubles you.

But the EFTA isn’t just about fraudulent debit card use. If someone manages to hack directly into your savings account and takes your money, you generally won’t be liable as long as you report the unauthorized activity within 60 days.

The Federal Deposit Insurance Corporation (FDIC)

Online banks, just like traditional banks, are eligible for FDIC coverage in the very rare event of a bank failure. Many online banks have FDIC insurance of $250,000 per depositor, per ownership category, per insured bank. The FDIC is an independent agency of the U.S. government and was created to protect the money Americans deposit in banks and savings associations. It currently insures more than 4,500 different financial institutions.

So your money is safer in a bank account with FDIC coverage, whether it’s online-only or has multiple locations in your neighborhood. To confirm the financial institution you are considering offers FDIC insured accounts, you can ask a representative, check their website, or visit the FDIC’s online tool BankFind to confirm.

Recommended: Ways to Manage Your Money

How Can Account Holders Protect Themselves?

Here are some preventive steps you can take to keep your online savings account secure:

Making Protection a Priority

While you’re shopping around for savings accounts with the best interest rates and lowest bank fees, keep in mind that safety is also key.

And when you sign up for an account, remember to take advantage of what’s offered by enabling security features like multifactor authentication and fraud detection notifications.

Recommended: What Is a Bank Reserve?

Not Getting Passive with Passwords

To keep your account secure, change your password often. Try to select a password that is as strong as possible, with a mix of numbers, symbols, and upper- and lowercase letters. Avoid using predictable combinations like “Qwerty123” or ones that involve your birthdate or pet’s name.

Make it long (as many characters as you can). Don’t share it with anyone or keep it taped to your computer. And try not to use the same password for everything you do online. If your password is compromised in a breach, it can make every account for which you use it more vulnerable.

To keep your account secure, change your password often.

Make it long (as many characters as you can). Don’t share it with anyone or keep it taped to your computer.
And try not to use the same password for everything you do online. If your password is compromised in a breach, it can make every account for which you use it more vulnerable.

Keeping Antivirus Software Updated

If you don’t already have antivirus and anti-malware programs installed on your computer, you may be able to find a free or trial version online. You also can purchase security software at a local electronics store or buy it and download it.

A full protection package can monitor your computer and other devices, and could include features such as a password manager, a virtual private network (VPN), and some type of identity theft protection.

If you already have protection on your device, be sure it’s turned on and update it regularly, so your computer recognizes every new threat that’s out there.

Avoid Using Public Wifi

Try not to use public wifi when you’re logged in to financial accounts, shopping online, or sending personal information. If you’re using a shared computer at work or at the library, don’t give the browser permission to save your password, and be sure you log off when you’re finished. You also may want to consider changing the settings on your mobile devices so they don’t automatically connect to the nearest wifi network.

If you must access online accounts through wifi hotspots, consider using a VPN app, which can encrypt the traffic between your computer and the Internet even when you’re using an unsecured network. (Carefully research the app you choose to be sure it’s a trustworthy brand, and review the permissions the app requests before agreeing to the terms.)

Staying Vigilant

It may seem unnecessary to monitor your savings on a regular basis — especially if you’re mostly depositing money into the account and almost never taking money out.

But by monitoring your bank account and keeping an eye on your balance, you might spot a problem before the bank does. And that could save you some major headaches if an identity thief decides to drain your funds.

Don’t reply to calls, texts, or emails that request personal information, even if your financial institution’s logo is on the email. It may be a phishing scam. The thief is hoping their targets will fall for the bait and hand over details that could be used to access your account and take your money.

If you get a call, say you’ll call back, hang up, and call the phone number on your savings account statement or the financial institution’s website to report your concerns. If it’s an email or text, check online for alerts on your account or call to get more information.

The Takeaway

Online savings accounts are generally very safe. They employ such features and techniques as FDIC insurance, SSL encryption, multifactor identification, and automatic logouts to help protect customers. Account holders can also do their part to secure their accounts by using unique and complex passwords, antivirus software where possible, and alerts.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Is it safe to put money in an online savings account?

Yes, online savings accounts are typically very safe places to store your money. Check to see that your bank has FDIC insurance and uses such state-of-the-art technology as SSL encryption, multifactor authentication, and automatic logouts.

What are the disadvantages of online savings accounts?

One disadvantage of online savings accounts is that you will not be able to visit a bank branch and meet in person with a bank representative. Transactions are typically conducted online, in-app, or using the online bank’s network of ATMs.

What are the risks of an online savings account?

The risks to an online savings account are typically the same as the risks to a traditional savings account. There is the slight risk of hacking, a computer virus, or a bank card being lost or stolen and then used without authorization.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBNK-Q125-035