Navigating online banking: A guide for retirees
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Every day, about 10,000 Americans turn 65. If you’re one of those individuals who has just entered your retirement years, it might mean a direct shift to a fixed income. Like many of your retiree counterparts, deciding how you want to manage your new income stream is one of the keys to enjoying a worry-free retirement.
For added flexibility, why not consider online banking? Online banking can be a great way to manage finances without having to keep up with a checkbook or make frequent trips to the bank. There are lots of other perks, too: Online banks tend to offer lower fees and higher interest rates on savings and checking accounts than traditional banks.
According to a 2018 FIS Global Consumer Banking report, 72 percent of bank interactions are now done via mobile and online, but many seniors still utilize brick-and-mortar banks, which can cost extra money. For example, some banks charge teller fees and also charge you if you don’t have a minimum amount on deposit. Despite the extra costs, the majority of adults over 60 have yet to take advantage of the convenience of online banking.
Online banking programs for older adults
Alex Glazebrook is the director of operations for Older Adults Technology Services (OATS), which is a social impact organization that builds sustainable systems to change the way retirees age. OATS partners with government agencies, community-based organizations, national advocacy groups and major corporations in order to put technology in the hands of older adults to achieve meaningful outcomes.
Glazebrook says that seniors, while interested in being able to take advantage of the ease and efficiency that everyone else has when they bank online, can feel less confident using online banking tools and also feel less safe managing their finances online. To combat these insecurities, he says OATS has developed a couple of programs designed specifically for financial security.
“One of them is called Ready, Set, Bank, which we developed in partnership with Capital One Bank,” Glazebrook says. “It gives people tools, resources and confidence. They can use a demo site and go online and make transfers, make fake check deposits, and learn how to be safe online.” Glazebrook says how-to videos can guide retirees through every step of the process — one mouse click at a time. There are also in-depth overviews and step-by-step tutorials which also help retirees envision how the process can look for them before they fly solo.
Glazebrook says that Ready, Set, Bank is directed very strongly at online banking and the digital side of transactions. He also states that OATS offers another course, called Money Matters, funded by Citi Community Development, which is a foundational financial security/financial empowerment course and is a much broader course that teaches seniors how to access resources online, how to budget, how to save money on cable, utilities and more.
Whether you need to transfer money online, move money from checking to savings accounts, pay someone without using checks, pay bills and more — all can be done electronically. If you’re looking for more latitude in the way you bank and you’ve decided to take the plunge, here are some quick steps you can take to get started banking online:
Step 1: Decide which bank to use.
You can choose to use a brick-and-mortar bank that also offers online banking services or a virtual bank which offers only online services. Just remember that if you really don’t feel you can give up your traditional bank, there’s no law that says you can’t utilize a bank that offers both online banking and one-on-one customer service. A few national banks that offer both brick-and-mortar locations and online banking include:
- Capital One
- Chase Bank
- First Citizens Bank and Trust
- Bank of America
- PNC Bank
- TD Bank
- Wells Fargo
Step 2: Enroll and create an account.
While this step may seem like the most off-putting, you really can break it down into easily-digestible chunks. To enroll in an online account through your bank’s website, create an account with your bank’s mobile app. You simply need to create an online profile and choose a long password that isn’t the same as any other accounts and doesn’t include any personal information. You can manage all of your accounts, access services such as mobile check deposits and fund transfers through the mobile app.
If you’re choosing a different bank and enrolling in an online account for the first time, you’ll most likely need to provide:
- Your full name and date of birth
- Your Social Security number
- U.S. mailing address
- Your email address and phone number
Step 3: Sign up for account alerts.
Alerts can be sent to your mobile phone or email and notify you of any important changes such as fraudulent activity on your account, balance updates, large transactions and more.
Step 4: Educate yourself on how to use online banking services.
You might also want to know more details about how to use your mobile banking app. Several banks offer tutorials on how to navigate online banking and manage your finances effectively.
Step 5: Set up an emergency fund savings account.
If you don’t already have an emergency fund, it’s a good idea to set one up. Unexpected expenses do come up, and statistics show that those 65 and older are less likely to have an emergency fund account other than their retirement funds. It’s a good idea to have an extra emergency account due to the higher risk of health-related or other emergency expenses.
If a caregiver or family member helps you manage your money, make sure you are confident in their ability to be your financial power of attorney. No matter what, make sure the person helping you manage your finances is someone you trust.
Once you’re set up through your online bank, you’ll be able to enjoy benefits like email alerts, bill reminders, fraud protection and you’ll get a centralized view of your accounts in one place, anytime you want.
Online banking safety
One of the online banking hang-ups many retirees have is whether online banking is safe and secure to use. Is it an unnecessary risk to put your financial information online, where it can get hacked or stolen?
Glazebrook said it’s quite the opposite. “People think it’s risky but it’s actually a way of protecting yourself. If you have access to your financial accounts anytime you want, you can check more frequently rather than call or go to a branch,” he says.
Online banks also use secure technology and encryption to prevent any information from getting into the wrong hands. This technology prevents hackers from stealing any of your information to access your accounts such as your username and password. Here are a few extra tips to help you navigate:
Make sure the bank you choose has the FDIC seal
The FDIC seal symbolizes the safety and security of U.S. financial institutions. FDIC deposit insurance enables consumers to confidently place their money at thousands of FDIC-insured banks across the country and is backed by the full faith and credit of the United States government.
Be cyber smart
There are risks with online banking, but don’t let that scare you away. In most cases, you just need to follow a few rules of thumb to be high on the safety scale. Here are a few tips:
- It’s best to avoid accessing your bank accounts or making any transactions on an unsecured public Wi-Fi connection. Check for encryption, too. A secure website address will begin with “https.” The “s” stands for “secure.”
- Make sure to change your passwords frequently and be sure your bank requires strong password standards. Use multi-factor authentication to access accounts online. Multi-factor authentication is a method in which a computer user is granted access only after two or more pieces of evidence are authenticated, related to knowledge, possession and inference.
- Don’t share your passwords or personal information. If a caregiver helps you with your finances, they should have financial power of attorney or be someone you trust.
- Never respond to texts, calls or emails asking for personal information from a source or institution that you don’t know. If you are unsure, call your bank to verify that this type of communication is legitimate.
- Always install antivirus/antimalware software and have a firewall up on your computer. This can prevent a lot of dangerous activity from happening to your online bank account.
- Put on the operating system and software patches to your computer and mobile device. Your mobile phone vendor or device manufacturer can show you how to do that.
Ultimately, Glazebrook says it’s important to pause and ask questions first. “There’s a tendency to get pushed to act quickly before digesting information. If they come across a resource online, we tell them to stop and pause and take some time to think about whether it makes sense. ‘How can I proceed in a way that leverages the things I’ve learned, that is also common sense?’ If you’re feeling pressured to do something online or if there’s something you still do not feel comfortable with, you should not move forward.”
Benefits of online banking
Retirees’ lifestyles often require flexibility in other areas of their lives, and here are some examples where you might want or need that versatility:
If you travel a lot…
You probably don’t want to have to call your bank if you’re abroad to find out how much money is in your account, do you? It can be much easier to check your accounts on your mobile device.
If you plan to travel the world the second you retire (or you’re already doing that now), online banking lets you easily manage your accounts on the go. You can access almost every type of service you would find at a physical bank such as deposit a check, pay a bill and transfer funds from your mobile phone or computer (which is perfect if you’re traveling).
If you need the convenience…
If you have any type of disability or find it tough to make constant trips to a physical bank, switching to online banking can offer a more convenient way of monitoring your accounts. You can maintain independence and access all of your accounts in one place without the assistance of another individual.
There are a number of banks who offer online banking services that are up to date with industry guidelines, such as the Web Content Accessibility Guidelines (WCAG) issued by the World Wide Web Consortium, which is the main international standards organization for the internet. WCAG has a set of recommendations for making web content more accessible, primarily for people with disabilities.
If you are a caretaker managing someone else’s finances…
Online banking is an easy way to help monitor spending and savings accounts for someone else, too. You can link yourself to another person’s account and easily help manage finances from afar, even if you are in separate cities or across the country from one another.
Online banking considerations
If you’re loyal to your brick-and-mortar bank, there may still be an adjustment as you transition to managing all of your accounts online. However, many banks can offer both options in the event that you need to speak with someone in person. When considering the switch to online banking, some things to be aware of include:
- Complicated transactions and bank questions are more difficult to answer over the phone or through web-based chat and may be better answered in person at a physical location.
- Fully online banks (with no brick-and-mortar locations) are impossible to visit if the online site is down.
- If you have some visual disabilities, online banking may not be the best option for you. Some physical banks have accessibility features such as Braille, large print and audio CD statement conversion, as well as sign language interpreters.
Glazebrook says that online banking can offer more than just convenience — it builds confidence and there are tremendous outcomes, too, once retirees understand the process.
“People are saving money, unlocking new benefits, unlocking new resources. It’s an exciting movement once they get past those initial fear humps,” he says. “They really take advantage of it and can’t believe they ever lived without it.”