Banking security sucks – protect your money!
May 23, 2016
Sarah Jeong’s experience with someone getting hold of her account and routing numbers confirms that I’m not paranoid about bank accounts. I’m exactly worried enough.
We have to give out our routing and account numbers to receive payments but, as her experience shows us, money can be withdrawn that way, too, without any authentication or verification required.
Fifteen years ago, before there was actual proof or anecdotes that giving out my account information for deposits was a problem, Dad asked me for them both so he could deposit some cash for me. That in and of itself wasn’t an issue, but it did raise a question mark in my mind.
The bank assured me that my account and routing numbers could only be used by non-accountholders for deposits but they didn’t back up any of those assurances with facts. It was a very “trust me” moment. (Needless to say, I don’t.)
How I protect my money
That left me with an uneasiness that never went away. When I started simplifying all my bank accounts, after the wonderful days of 5% interest yore were a distant memory, I still opened 2 extra accounts.
We have a joint checking account where all our money gets funneled. I keep one month of expenses there. The cash that I need easy access to goes into a nearby savings account, the cash that doesn’t need to stay liquid, is immediately transferred to be invested or into the Super Secret Locked Up Bank Account.
We have a second checking account for the real estate investment property: income is auto deposited by the property manager and the expenses are automatically paid every month. There’s not much left at the end of each month, but there’s some. That overage is swept into a savings account too.
This way, if anyone gets the account and routing numbers of either checking account and manages to finagle a withdrawal, I’d be out a month of cash and Really Annoyed but at least the damage should end there.
:: Do you worry about bank security? How’s your banking set up?
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No I don’t worry about this. Everyone gives out their bank account numbers here in Australia so that you can pay them.
I wonder why Australian banks can get it right and what American banks need to learn from them.
I use either the proprietary banking apps or PopMoney for transferring money to people. For example, Sister was getting the bills for Mom’s day program and would remit payment, then send me a Chase Quick Pay request. (I don’t have a Chase account now, but it’s not a requirement for both parties to have an account with Chase to use the app.) My own bank (Ally) uses PopMoney for these types of things. I pay the dog walker with it all the time.
Those are excellent points. I will take a look at PopMoney too, to see if it’s suitable.
I actually just set up something pretty similar for myself. After your excellent guidance on acquiring a credit card that gives me redeemable points, it means I no longer need to have a pool of liquid cash on hand for expenses. So now it’s – checking account holding bill money for the next 2 weeks, inaccessible money market account, and investment accounts with an entirely different bank.
And while I didn’t strictly worry before, largely because I’ve never run into problems getting my money back when Bad Things happen, it is super nice to feel even more secure and safe. At the very least it’s awesome to know I’m not going to bounce any checks because I had to buy something but forgot to write it down.
*claps* Honestly, that’s a HUGE reason I loved switching to buying with credit cards. I hate the straight from liquid account approach because it just takes one or two forgotten transactions to mean that you overdraw and when money was VERY tight, I did that very thing. OR uncashed checks, those were also terrible.
So far as I know, only Bill has my account numbers, but I probably ought to think about that one. I would hope that the Federal/National insurance programmes would cover theft, but they may only cover specific losses due to bank failure. Never considered this before. Another thing to put on the long list of financial stuff to do!
It would be good to be sure of what coverage you have! I’d like to be able to lay out the details for both of us.