online banking is safe and easy

Ask The Expert: Is Online Banking Really Safe?

Question: I’m in college, and my mom is horrified that I still don’t have a “real” bank account. I keep my money in Ally Bank, an online bank. My mom thinks that’s unsafe, and she can’t get over the fact that Ally has no branches I can visit if there’s a problem.

I realize you deal with bigger problems than this, but how can I convince my mom that online banking is legit? And that maybe she should try it? She’d definitely save some time and money.

— Patrick in Oklahoma

Howard Dvorkin CPA answers…

Howard Dvorkin on how to get out of debt fastLike most things, online banking is safe if you do it right. Thankfully, “right” is also easy. Let’s use your bank as an example.

Ally Bank is highly rated. In fact, my friends at GoBankingRates deemed them the No. 1 online bank for two years in a row. Why? Because Ally has many of the features you should look for…

  • It’s FDIC-insured just like brick-and-mortar banks.
  • It doesn’t charge a monthly fee for a checking account. (“Fees average $8.61 at online banks and $12.95 at brick-and-mortar institutions,” GoBankingRates says.)
  • It offers round-the-clock customer support on the telephone, live chat online, and a mobile app.
  • For savers, CD rates are higher than brick-and-mortar banks.

There are many banks just like Ally Bank, and finding the perfect one for you might take an hour or so of web searching. For instance, many online banks offer free ATM service by partnering with brick-and-mortar banks. However,  the overall number of ATMs and their locations might not mesh with where you live, so checking their websites is a good idea before opening an account.

As for visiting a branch bank, your mother doesn’t need to worry. A report by my friends at Bankrate indicates, “39 percent of Americans haven’t visited a bank or credit union branch in at least six months. This is up from 34 percent when this question was last asked in March 2014.”

It’s quite possible branch banks will go the way of print newspapers: Still around for those who prefer them, but no longer the only delivery method.

I understand your mother’s reluctance to suddenly shift her hard-earned cash into a new kind of bank that didn’t exist a decade ago. Still, technology has been a huge boon for those looking to control their spending and eliminate their debt. So let me recommend a half-step for her and something you should definitely consider.

It’s called PowerWallet, and offers it for free. PowerWallet is a suite of online money management tools that are powerful but easy to use. In a nutshell, you create an account and then merge all your financial data into it.

PowerWallet isn’t a bank. Instead, it allows you to see all your spending and create budgets for every need. Your mother might already be an excellent saver, but this will give her new insights — and allow her to get comfortable with using online tools for her money.

For you, PowerWallet can help you adapt to new spending challenges as they arise, which they certainly do when you’re in college and then graduate into a whole new financial world. Again, PowerWallet costs nothing, so this isn’t a sales pitch. However, it might be a way for you and your mother to finally agree on financial technology.


Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a  CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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