Dear Liz: My wife keeps over $60,000 in her checking account at a brick-and-mortar bank. I think that is a bad idea. Too easy for possible fraud. I have tried to convince her the safest place to keep the bulk of her cash is in a savings account, preferably in an online bank, which I believe provides added protection against fraud as long as we maintain good computer health. What do you think?
Answer: Many people have the opposite conviction, which is that online banks are somehow less safe than brick-and-mortar versions. In reality, both types offer encryption and other safety measures to deter fraud. Accounts are insured by the Federal Deposit Insurance Corp. and covered by federal banking regulations designed to protect consumers against fraud.
Your wife’s money wouldn’t necessarily be safer in a savings account, but she’d earn a little more interest. Many online banks currently offer rates of about 1% on savings accounts. If she moved all but $10,000 out of the checking account, she could earn about $500 a year in interest and perhaps more if the Federal Reserve continues to raise rates.