Managing Your Money Online: How to Do It Safely, From Home

This post is brought to you by CDIC, but all opinions and stories are my own.

Global pandemic or not, your time is valuable—and I think it’s safe to say we’re all being a bit more cautious about the number of errands we’re running and the people we’re seeing right now. Who knows how long we’ll continue to think twice about errands that used to be just a regular Saturday, you know?

However, that (very reasonable!) caution is not a good enough excuse to put off the money management tasks on your to-do list, because not only are they easier than cutting your own hair, they’re safer, too. 

Trust me, I say this from experience. I’ve both managed my money online and cut my own hair over the years, and only one of those things is something I plan to continue in the future—and it’s not cutting my own hair.

Yes, you can do that online

Finally opening a high-interest savings account, taking a closer look at your budget, chatting with a financial advisor, investing your money: Whatever your next financial step is, you can do it online these days. 

And yes, I said these days, like I’m some kind of old timer. For the record, the first time I tried to invest my money, I did it in person, so I am forever grateful that’s no longer a thing we have to do. 

Quarantine and social distancing and general caution are good reasons not to do a lot of things, but tackling your financial to-do list isn’t one of them. 

Is it safe to manage my money online?

“Is my money safe online?” is a fair question, even if you’re One With Technology. Putting your money into an account that you’ve only seen on the internet just hits different for some people, and that’s totally fair. 

In fact, I’d argue that caring about your financial security online is something we should all do—this isn’t just our personal data, it’s literally the personal data we use to pay for our actual lives. 

Luckily, the answer is by and large, yes, it’s safe to use online tools for your money. 

Managing your money online is something that everyone from the big banks to the CRA lets you do in one way or another, but please don’t just take my word for it—make sure you know what protections are in place, what they cover, and how you can take extra steps to boost your security.

Set strong passwords—yes, that strong

If you aren’t yet using a password manager like LastPass to generate secure passwords and store them for yourself, starting to manage your money online is the best reason to start. It’s important no matter what, since a lot of your non-financial accounts store your credit card details already, but if you’re setting up a bank login or tax software, it’s got even more personal details.

Using a password manager is an easy way to make sure your passwords are secure, and your accounts are safe. You should seriously do it.

Use two-factor authentication—yes, always

Two-factor authentication is another great way to add a layer of security to your accounts. If you’re not using it yet, or you haven’t heard of it, it’s basically just enabling a check with another device you use to make sure you’re you when you go to log in. 

Some two-factor checks rely on email confirmation, some will text you a confirmation code, and you can even use an app like Google Authenticator to store two-factor authentication codes. You’ll need the code plus your password to access your account, and it’s a great way to protect yourself and your money online.

Look for CDIC insurance, and understand your coverage

Here in Canada, we’re lucky that there’s a quick way to check if your money is safe in an online account—look for CDIC insurance. Member institutions will display something like this on their website:

CDIC logo

When you see that symbol, you know your money is protected by the same organization that protects deposits at all the biggest financial institutions in Canada. It’s a different kind of safety than your login protections, so it’s still important you use a strong password and 2FA, whereas CDIC protects your actual money

However, it’s important for you to understand what that coverage is, and how it works, especially since there have been some changes to the coverage they offer that you should know about.

As a quick primer, here’s how CDIC insurance works. CDIC is a federal Crown corporation that protects eligible deposits at member financial institutions in case they fail. They’re funded by premiums paid by their member institutions, so they don’t receive government funds to operate.

If your financial institution—bank, federal credit union, online savings account, etc—is a member of CDIC, your money is insured and backed by this federal Crown corporation up to $100,000 in seven different categories. So if you have $100,000 in an account in your name, $100,000 in a joint account, and $100,000 in a TFSA in cash, all three of those accounts are covered, even at the same institution.

As for the changes, after April 30th, 2020, CDIC now offers:

  • expanded coverage to include eligible deposits held in foreign currency (so you can save money in USD or other currencies and have it covered, too)
  • extended coverage to include all eligible deposits with terms greater than 5 years (so if you have a GIC with a 7 year term, it’s covered!)

…and no longer offers deposit insurance protection for travellers’ cheques (but like also, who is travelling these days, right?)

Do it now

If you’ve been letting financial tasks loiter on your to-do list as you made it through the pandemic, that’s totally fair—we have all had a lot on our minds! But if they’re still sitting on your list because you were worried about the safety of managing your money online, that’s not something you need to worry about. Just make sure your account management practices are A+, and look for CDIC insurance, and you’ll be well on your way to my personal financial happy place: Never having to leave the house to do a single thing with my money.