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Online savings accounts are generally safe. There are a number of features that help keep them that way, from being insured by the Federal Deposit Insurance Corporation (FDIC) to the latest security technology.
That can be reassuring news since online savings accounts may offer 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 convenience, such as being able to move money around with a minimal number of clicks on an app or website.
Here’s what to know about how online savings accounts are FDIC insured and ways to help keep a savings account protected.
Key Points
• Online savings accounts are generally very safe, protected by security technology and protocols such as SSL encryption, two-factor authentication, firewalls, and communication policies designed to prevent fraud.
• As with traditional banks, online banks typically provide FDIC insurance up to $250,000 per depositor, per ownership category, per insured bank, in the highly unlikely event of a bank failure.
• The Electronic Funds Transfer Act (EFTA) also limits liability for unauthorized activity in your account, as long as you notify your financial institution promptly.
• Account holders can take proactive steps to protect their savings accounts, such as setting strong, unique passwords; keeping antivirus software updated; and avoiding public wifi for financial transactions.
• Another way for account holders to protect their savings account is to stay vigilant — monitoring the activity in their account regularly and not replying to calls, texts, or emails that request personal information.
What Is an Online Savings Account?
An online savings account is a digital bank account that you access and manage through a mobile app or website.
You may 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. One of the benefits of a savings account is having easy access to your money. In fact, according to an American Bankers Association (ABA) survey released in November 2025, 54% of Americans bank by mobile app — more than by any other method.
But traditional banks have physical branches with employees. 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 in an online savings account, check their account balance, transfer money, and more. If they have a problem, they can handle that online as well or make a phone call to customer service. And like traditional banks, typically, online banks have FDIC insurance.
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 are higher than a traditional savings account.
Consider that as of August 2026, the average savings account annual percentage yield (APY) was 0.38%, while a number of online banks were offering 4.10% or higher for their high-yield savings accounts.
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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. Protections 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 simply 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 can help protect your bank account; 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, texts, or phone calls.
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 you get locked out after trying to log in, the site will likely advise you to wait 24 hours before trying again.
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Are Online Savings Accounts FDIC Insured?
It’s not just financial institutions themselves that are safeguarding online savings accounts — online savings accounts are FDIC insured. In fact, 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 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 4,200 different financial institutions.
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.
How Can Account Holders Protect Themselves?
Here are some preventive steps account holders can take to help keep their online savings account secure:
Making Protection a Priority
While shopping around for savings accounts with the best interest rates and lowest bank fees, keep in mind that safety is also key.
And when signing up for an account, remember to take advantage of what’s offered by enabling security features like multifactor authentication and fraud detection notifications.
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 you use it for 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 version online. You also can purchase security software at a local electronics store or buy it online 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 logging in to financial accounts, checking the balance in your emergency fund, 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
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 safe. They typically 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 eligible 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 an online savings account FDIC insured?
Many online banks have FDIC insurance of $250,000 per depositor, per ownership category, per insured bank. You can contact your bank or check their website to make sure they have FDIC insurance.
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 of an online savings account are typically the same as the risks to a traditional savings account, such as the risk of an account being hacked, becoming a victim of bank fraud, or a bank card being lost or stolen and then used without authorization. Using a strong password and enabling security features like multifactor authentication and fraud detection notifications may help keep an online bank account protected.
How do I check if my online bank is FDIC insured?
To check if your online bank is FDIC insured, contact the bank and speak to a representative, or check the bank’s website. The FDIC requires banks to show proof that they are FDIC insured on their website’s homepage, log-in page, and any page where a customer initiates opening a deposit account.
Do online credit unions offer the same insurance as the FDIC?
Online credit unions offer similar coverage to the FDIC with the same level of protection through the National Credit Union Administration (NCUA). Like the FDIC, the NCUA insures up to $250,000 per account holder, per ownership category, per insured institution. NUCA is backed by the full faith and credit of the U.S. government. You can contact your online credit union or log onto their website to verify that they are NCUA insured.
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^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
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 every 31 calendar days.
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 the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, 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 the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit 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, Wise, 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 Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.
See additional details at https://www.sofi.com/legal/banking-rate-sheet. We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
1SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.
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