05 Feb How do I know if an online bank is safe?

Q. I want to get the best interest rate possible for a savings account but I don’t think I trust the banks that I’ve never heard of that you find on some of those lists of who pays the highest interest rates. How would I know if my money was safe?
— Banking customer

A. You’re smart to want to make sure your hard-earned money is protected.

And it seems you’ve seen what’s often true: online banks seem to offer higher rates than traditional banks.

You need to check to make sure the bank or credit union is federally insured with Federal Insurance Deposit Insurance Corporation (FDIC), said Jody D’Agostini, a certified financial planner with The Falcon Financial Group in Morristown.

“This will insure amounts deposited into any account up to $250,000,” she said, noting that banks pay into a fund for the safety of these accounts up to this limit.

You can ask the bank directly, or you can call the FDIC call center at (877) 275-3342.

Email your questions to .

This story was originally published in February 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.