Comments on: BVC #5: Bank Account Firewalls

By: Steve L.

Steve L. — Sat, 20 Feb 2010 20:37:29 +0000

Jim – I like dmeanea’s idea.

Isn’t it just easier to not link your main Savings account to anything and do ETF’s to your checking account when necessary?

BTW, love the site and videos!

By: Rob

Rob — Thu, 17 Dec 2009 00:35:39 +0000

I was dinged by a fraudulent transaction due to the association of a credit card. The attempt on withdrawing funds from my bank account failed so PayPal just charged my credit card. I immediately filed a fraud claim and it was reversed although the money is credited to the PayPal account and not back to the credit card.

By: dmeanea

dmeanea — Wed, 16 Dec 2009 19:46:13 +0000

You keep as much “working capital” in the firewall account as you need to cover your transactions for whatever timeframe you determine. There’s a trade-off between convenience and effectiveness; you’ll have to find your personal preference for how often you want to move funds from the protected account to the operating account.

By: Jackson

Jackson — Wed, 16 Dec 2009 19:30:51 +0000

That’s the right idea. But doing it for every transaction might be a little tiring. So you could just do it in $500 increments (or more or less depending on your budget).

By: helen

helen — Wed, 16 Dec 2009 16:46:16 +0000

This sounds very interesting but I need clarification please. Questions: So I would set up a firewall account as a “buffer” for my main account, right? Then when I want to make a transaction I move money from my main account to the firewall account? I would need to do this with every transaction I make? Seems like I would continually be moving money. I don’t think I fully understand. Helen

By: Jim

Jim — Thu, 09 Apr 2009 13:13:18 +0000

It can be anything, but I use a savings account. The point is that you have an account with only a few dollars, the actual type of account is less important.

By: Mike

Mike — Thu, 09 Apr 2009 03:53:03 +0000

I’m also unsure as to what specific account your ING Firewall account is. As far as I know, ING has savings, checking and CD accounts.

By: Jackson

Jackson — Sun, 22 Mar 2009 21:27:57 +0000

Is your ING Firewall account a savings account? And if it is do they have a limit on how many transfers per month?

By: bill mccollam

bill mccollam — Sun, 22 Mar 2009 21:24:47 +0000

I enjoyed the video, both the message and the media. It was well done and simple. The concept seems to make sense – but I let me make sure I get it… the PayPal account is linked to the ING account – right? That’s the risk – if the PP is compromised – then the bad guy can pull $ from the ING account. This wouldn’t help if the ING firewall account itself gets compromised right – because it has a link to the real ING account.

By: dmeanea

dmeanea — Sun, 22 Mar 2009 20:05:02 +0000

Your layout is an excellent way to limit loss in case of security breach in the outside accounts (Paypal, AcctX, AcctY). Essentially, my system is identical to yours, but with an additional account layer which limits loss if the breach is at the ING level. (In the diagram, my real savings account would be on the right side with a one-way arrow going through a dotted line to the “ING Main” account.)

If somebody was able to get into the ING Firewall account, they would then also have access to the ING Main account because those accounts are linked within ING. They would not be able to get to my real savings account, though, because there is no link; I only EFT funds to the ING Main account as needed.

Could my real savings account be hacked? Sure, it’s possible, but I don’t think it’s as likely. I think the accounts I’m using to interact with the outside world are at substantially higher risk of being compromised.

By: Jim

Jim — Sun, 22 Mar 2009 17:24:48 +0000

From what I can tell, your system adds an additional layer. If your ING account is compromised, you are still in the same position as if your Paypal account fails. In your system, your ING is outside the firewall with a separate account as your firewall, it’s not important that there are two levels to in the outside system.

Am I understanding your setup correctly?

By: dmeanea

dmeanea — Sun, 22 Mar 2009 17:18:47 +0000

I’ve been doing this for a while, but with one additional firewall level.

Phishing and hacking endanger not just your PayPal account, but your ING account as well. If your ING account was compromised, the villain could access the funds in your main account, your firewall account and all your other ING accounts, AND any outside accounts to which you have set up direct links with transfer capability.

I have my main savings accounts at separate institutions, where the only transactions that occur are my direct deposit coming in, and EFTs I push to my ING main account as needed for on-demand funds. I feel safer with my “operational” accounts not being tied to my actual savings accounts; my ING account is unaware of my savings accounts. I also like how this system means having very few transactions involving those savings accounts.

I’d appreciate any feedback you have on this variation on your account firewall system.

By: Matt Fyffe

Matt Fyffe — Sun, 22 Mar 2009 15:26:53 +0000

I’d never heard of this but it’s a great strategy with the way the internet scams all seem to come about today. I link all of my accounts to my main savings account, having never realized the vulnerabilities I’m exposing myself to. Thanks for the suggestion, great idea!

By: ObliviousInvestor

ObliviousInvestor — Sun, 22 Mar 2009 12:44:48 +0000

Wow. I haven’t heard of this idea before. Seems to make a whole lot of sense to me.

I’m eager to see if anybody chimes in with any drawbacks to it. If not, I’ll be setting one up shortly.

Thanks!

By: Eric

Eric — Sun, 22 Mar 2009 12:21:23 +0000

I remember you talking about this before. It’s a good idea and something I definitely never thought about.