When was the last time you walked into a physical branch of your bank? If you can't remember how long ago it was, it might be time to switch to online banking.

While online-only banks have some limitations — particularly for people with spotty internet access — they also deliver higher interest rates on deposit accounts and lower fees than traditional banks, often with similar (or better) security.

For the most part, online banks offer the same protections as brick-and-mortar institutions, including FDIC insurance on your deposits. So, as with traditional banking, it's a combination of the bank's security measures and your personal habits that determine how safe your accounts will be.

Traditional vs. online banks: Which are safer?

In this age of data breaches, it's natural to have doubts about the safety of online banking. In 2023, banks represented almost half of all companies that experienced financial data breaches, while credit unions made up another 7%, according to Comparitech. By comparison, however, online banks experienced less than 0.5%.

While online and traditional banks have many of the same cybersecurity and privacy regulations, online banks may be safer because they have no physical branches, meaning far fewer employees. As negligible as that detail may seem, a study from Verizon found that some 74% of all data breaches were enabled by employee activity, whether it was through errors or deliberate fraud.

That doesn't mean online banking is always safer than traditional alternatives, especially since data breaches aren't the only security threat to customers. Whether you complete your bank transactions digitally or in person, the transaction happens online, and your sensitive account information is stored online, too. In other words, it's still vulnerable to threats like malware and identity theft whether you bank in person or online.

How online banks keep your money and information safe

Every bank has its own set of security policies, but online banks are generally as safe as traditional banks since they often use the same preventative security measures, including:

• Encryption software

• Multi-factor authentication

• Firewalls

• Monitoring for unusual account activity

• Mandated privacy policy training for employees

Keep in mind these are all best practices, and some banks are better than others when it comes to online security. When choosing an online bank, prioritize those that offer robust security features.

Further, as an account holder, it's also up to you to take advantage of the most valuable security features each bank offers, whether it's an online bank or not. That includes enabling multi-factor authentication, account alerts, and automatic updates for your banking app.

You can also take simple steps to keep your account safe from some of the biggest threats to banking security: phishing and stolen login credentials. Wherever you bank, you should always choose a strong and unique password for your accounts, never log in while using public WiFi, and avoid clicking on links in unsolicited emails and text messages.

Read more: How to use AI to improve your finances

How to tell if an online bank is legit

To find out if an online bank is legitimate and secure, you'll need to verify through reputable sources. At a minimum, your online bank should be FDIC insured — meaning they insure you against losses on up to $250,000 in deposits — and actively in business, both of which you can quickly confirm using the FDIC's BankFind Suite tool.

For good measure, go one step further and check to see what you can find out about the bank online. To learn about their track record with security issues, search for news and reports on cybersecurity incidents at the bank, read their customer reviews, and check out their app ratings.

If the bank is legitimate, you should also be able to find information about their security policies on their website easily. Take a look to confirm that they provide 128-bit or 256-bit data encryption and use multi-factor authentication. If this information isn't posted on their website, consider it a sign to look for another online bank.