7 Simple Ways to Protect Your Financial Accounts and Personal Information

Keeping your financial accounts and personal information secure has become an important part of managing your finances.

Between online banking, investment accounts, credit cards, email, and smartphones, we rely on technology for much of our financial lives. That convenience also creates opportunities for scams, identity theft, and unauthorized account access.

The good news is that protecting yourself doesn't necessarily require complicated technology or major changes to your routine.

Here are seven practical steps worth reviewing.

1. Are You Using Multifactor Authentication?

Enable multifactor authentication on your important accounts.

Multifactor authentication (MFA) adds another layer of security beyond your password.

After entering your password, you may be asked to approve a sign-in through an authenticator app, such as Google Authenticator or Microsoft Authenticator, or enter a temporary verification code.

This means that even if someone obtains your password, they may still be unable to access your account without the additional verification.

What to review: Start with your email, banking, investment, and retirement accounts. Where available, consider using an authenticator app rather than text-message verification.

One additional precaution: Never approve a login request you didn't initiate. An unexpected authentication request could mean someone is attempting to access your account.

2. Are You Using a Password Manager?

Use a password manager to create and store strong, unique passwords.

Using the same password across multiple websites creates an unnecessary risk.

If one website experiences a data breach, criminals may try the stolen login information on other accounts, including your email or financial institutions.

A password manager helps by generating strong, unique passwords and storing them securely so you don't have to remember each one.

What to review: Make sure your most important accounts have unique passwords. Protect your password manager with a strong master password and multifactor authentication.

3. Are You Being Careful With Unexpected Texts, Emails, and Phone Calls?

Verify unexpected requests before clicking links or sharing information.

Fraudulent messages have become increasingly convincing. A text might appear to come from your bank, a delivery company, or a government agency.

You may receive a message saying your account has been locked, a payment failed, or your information needs to be updated immediately.

The safest habit is to avoid using links or phone numbers provided in unexpected messages.

For example, if I receive a text or email asking me to update payment information, I prefer to go directly to the company's website or app rather than clicking the link in the message.

The same applies to phone calls. If someone claims to be calling from your bank, you can hang up and contact the bank using the number on your debit card, account statement, or official website.

The IRS is another common source of impersonation scams. The IRS generally initiates contact through regular mail rather than unexpected texts, emails, or phone calls demanding payment or personal information.

What to review: Treat unexpected requests involving passwords, account access, payments, or personal information with caution. Verify the request independently before taking action.

4. Have You Frozen Your Credit?

Consider placing a credit freeze with all three major credit bureaus.

A credit freeze is one of the simplest ways to help protect yourself from certain types of identity theft.

When your credit is frozen, lenders generally cannot access your credit report to approve new credit accounts. This makes it harder for someone to open a new credit card or loan in your name using stolen personal information.

Credit freezes are free, don't affect your credit score, and can be temporarily lifted when you need to apply for credit.

You'll need to place a freeze separately with Equifax, Experian, and TransUnion.

A credit freeze won't prevent every form of identity theft or protect existing accounts from fraud, but it can provide an important layer of protection.

What to review: Check whether your credit is frozen with all three bureaus. If you haven't done this yet, we've explained the process in more detail in our article, Why Freezing Your Credit Is One of the Simplest Ways to Protect Yourself.

5. Are Your Phone and Computer Software Up to Date?

Keep your devices, browsers, and applications updated.

Software updates aren't only about adding new features.

They frequently include security fixes that address vulnerabilities criminals may use to access devices or personal information.

Older software can leave your computer, smartphone, or tablet exposed to security weaknesses that have already been identified and corrected.

What to review: Enable automatic updates where practical, particularly for your operating system, internet browser, and financial applications.

6. Are You Careful When Using Public Wi-Fi?

Use extra caution when accessing financial accounts on public Wi-Fi.

Public Wi-Fi is convenient when traveling, staying at hotels, or visiting coffee shops and airports.

However, not every public network is secure. Criminals can sometimes create fraudulent Wi-Fi networks that appear legitimate or attempt to intercept information on poorly secured connections.

Modern encrypted websites and banking apps provide meaningful protection, but it's still worth being careful about which networks you connect to.

What to review: Avoid connecting to unfamiliar networks. When accessing sensitive financial information, consider using your phone's cellular connection or a trusted personal hotspot instead.

If you regularly use public Wi-Fi, a reputable VPN can provide an additional layer of privacy, although it doesn't protect against every type of online threat.

7. Are You Regularly Monitoring Your Financial Accounts?

Review your accounts and enable transaction alerts.

Even with strong passwords, multifactor authentication, and other precautions, unauthorized activity can still occur.

Regularly reviewing your accounts helps you identify suspicious transactions or changes before they go unnoticed for an extended period.

This includes checking your bank accounts, credit cards, and investment accounts for unfamiliar transactions, withdrawals, or changes to account information.

Many financial institutions also allow you to receive notifications when transactions occur, account information changes, or someone signs in from an unfamiliar device.

What to review: Consider enabling transaction and security alerts on your financial accounts. Review your statements regularly and contact your financial institution promptly if something doesn't look right.

How Often Should You Review Your Financial Security?

You don't need to go through this entire checklist every week.

Some steps, such as freezing your credit, setting up a password manager, and enabling multifactor authentication, may only require an initial setup and occasional review.

Other habits should become part of your normal routine, including keeping software updated, being cautious with unexpected messages, and monitoring account activity.

It can also be helpful to revisit your security settings when you get a new phone, change computers, open a financial account, or learn that a service you use has experienced a data breach.

Financial Security FAQ

Does multifactor authentication completely protect my accounts?

No. It significantly improves account security, but criminals may still use phishing or other techniques to gain access. Never share verification codes or approve login requests you didn't initiate.

Does freezing my credit affect my credit score?

No. Freezing your credit doesn't lower your credit score or prevent you from using existing credit cards. You can temporarily lift the freeze when applying for new credit.

Is it safe to use a banking app on public Wi-Fi?

Banking apps generally use encryption to protect information, but you should still verify that you're connected to a legitimate network. Using cellular data or a trusted hotspot can reduce exposure to risks associated with public networks.

How often should I check my financial accounts?

Checking account activity regularly and enabling transaction alerts can help you identify unauthorized activity sooner. The appropriate frequency depends on your accounts and how actively you use them.

Final Thoughts

Protecting your financial information is an ongoing part of managing your finances.

You don't need to become a cybersecurity expert to reduce some of the most common risks. Using stronger account security, being cautious about unexpected requests, and paying attention to account activity can go a long way.

If you haven't reviewed these seven items recently, consider working through the checklist and addressing anything you may have overlooked.

A little attention now can help prevent a much more complicated problem later.

Disclosure

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

This material is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; however, no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative purposes only.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax professional.