Online banks are generally very safe and have many advantages but, unfortunately, there are also online "phishing" schemes with links to Web sites that appear to come from financial institutions. Instead, they are really designed to steal personal information to use to commit identity theft. Thus, you are smart to want to protect yourself from fraudulent Web sites.

Some of the advantages of online banks include convenience, constant access to account information, and attractive interest rates. Whether you are selecting a traditional "brick and mortar" bank or an online bank that has no branch offices, take time to make sure the bank is legitimate and that your deposits are insured by the Federal Deposit Insurance Corporation (FDIC).

In the case of online banks, visit each online bank's Web site and review the history of the bank, the location of its headquarters building, and information about its FDIC insurance coverage. Look for the same FDIC logo that is commonly seen on the doors of traditional banks and wording like "FDIC insured accounts" or "Member FDIC." You can also check the FDIC's online database of FDIC-insured institutions using the "Bank Find" link on the FDIC Web site at www2.fdic.gov/idasp/main_bankfind.asp. Not all banks operating on the Internet are FDIC insured. Some are chartered overseas, and the FDIC may not insure your deposits.

With appropriate safeguards, online banking can be safe, profitable, and convenient. Some might argue, in fact, that online banking is safer, as well as faster, than mailing a check. You will, however, need to have another account established to receive the funds from withdrawals from online accounts. To reduce your risk of becoming a fraud victim, print out account statements regularly and review them for evidence of account tampering or unusual activity.

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