Is it safe to link your bank accounts to financial tools and apps?

These days, it seems like everything is digital — especially when it comes to financial transactions.

Instead of budgeting with pen and paper, writing a check, or paying in cash, you’re likely handling many financial tasks online. But while today’s digital landscape is convenient, you may wonder whether it’s safe.

Linking your bank accounts to financial tools and apps often involves a range of security measures, but there are still risks to be aware of. Here’s what you should know before you connect your bank accounts to a third-party service.

What does it mean to link a bank account to a financial tool or app?

If you use a budgeting app, digital wallet, or a peer-to-peer (P2P) payment platform, chances are you’ve already linked your accounts to these tools.

When you link a bank account to a financial tool or app, you’re essentially allowing the two to share information. For example, if you link your checking account to your budgeting app, the budgeting app will be able to access your bank transactions. This can save you the hassle of manually entering every transaction into your budget — and it’ll probably be more accurate.

Another example involves using a P2P payment app. Say you owe your friend $50 and want to pay them electronically. Linking your bank account to a P2P payment app such as Zelle lets you pay your friend without having to share account numbers, write a check, or withdraw cash.

Services that help link bank accounts

Third-party apps and tools use specific platforms to connect to your bank accounts. Plaid and Yodlee are two common examples of these platforms.

When you use an app that enables Plaid, you’ll be prompted to choose your bank and sign in with your credentials. Plaid then encrypts your data and securely shares it with the app — without disclosing your username or password.

Yodlee is a similar tool and is used by the majority of the top U.S. banks. By linking accounts, it can aggregate data, verify account details, and organize transactions.

Is linking bank accounts safe?

While your money is protected by the Federal Deposit Insurance Corporation (FDIC) when it’s sitting in your bank account, this isn’t necessarily the case when using non-bank financial apps. This, among other security concerns, may be a risk when linking your bank account to a financial app.

The good news is that third-party apps use several technologies to keep your data safe. However, the level of security these apps offer can vary widely.

Research a specific app’s security measures and insurance policies before deciding whether or not to trust it. Below are some common security features that these apps may use:

• Encryption
• Tokenization
• Multi-factor authentication
• Third-party security reviews
• Liability protection
• Biometric verification
• Transport Layer Security (TLS)
• Payment confirmation notifications

Some apps, such as P2P apps, may even be covered under the Electronic Fund Transfer Act, which limits consumer liability in the case of unauthorized payments.

In general, make sure an app is reputable before using it. In addition to reviewing its security measures, you can check out customer reviews, ratings, and complaints online.

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Benefits of linking bank accounts

Linking your bank account to third-party financial apps and tools can have several benefits, such as:

• Better organization: Allowing your various accounts to “talk” to one another can help you keep your finances more organized. For example, linking your bank accounts to a budgeting app allows you to track and categorize your transactions in real time.
• Security measures: Platforms like Plaid and Yodlee use a variety of security measures, such as end-to-end data encryption, multi-factor authentication, and third-party security reviews to keep your data safe. Plus, some apps are covered under the Electronic Fund Transfer Act.
• Better financial insights: Connecting your financial accounts with a third-party app can give you a bird's-eye view of your finances without having to log in to several different accounts.
• Convenience: When you link your bank account to a third-party app, you no longer have to rely on clunkier money management methods, like carrying around cash or budgeting by hand.

Risks of linking bank accounts

Though linking your bank account to financial apps can make your life easier, you should understand the risks. These include:

• Data breaches: The more apps that have access to your financial information, the higher your risk of that information being compromised.
• Variability in different apps’ security measures: Apps may use different technologies and have varying privacy policies and liability coverage. This means you need to read up on a specific tool’s policies to understand your risk and how your data is protected.
• Reliability on mobile devices: Though digital banking can often be convenient, it does rely on your access to the internet, and typically, a mobile device. If you lose your phone or run out of battery, you may lose access to your accounts and financial apps.

Read more: 10 best mobile banking apps of 2025

Tips for keeping your bank accounts safe

Whether or not you’re a fan of digital wallets, P2P payment apps, and other online tools, keeping your bank accounts safe is crucial. The following tips can help.

• Use secure Wi-Fi: When possible — and especially when sharing personal information online — use a secure Wifi network. Public networks may enable others to access your browsing history and personal information.
• Research third-party apps: Don’t use an app or tool before you know how it protects your data. Research its security measures and consult customer reviews to make sure it’s legitimate.
• Monitor your accounts: Set up transaction alerts for your financial accounts or log in regularly to check for unfamiliar charges.
• Password-protect your devices: If you save any passwords on your phone or computer, it could be easy for someone to get access to your accounts. Lock your devices with passwords or biometric authentication to protect your data.
• Use unique passwords: Don’t use the same password for multiple accounts, which makes it easier for hackers to access more of your data. Instead, create unique passwords for each account. If you’re worried about remembering login information for multiple accounts, consider using a password manager.