Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: Melissa And Doug Puzzle - What Are Melissa and Doug Puzzles? to Panasonic Mini Dv Camcorders - Panasonic Mini DV Camcorder Great Choice for Pro or Amateur

On Line Savings - How Can You Benefit by Opening an Online Savings Bank Account

banks money accounts cash

We are all familiar with the local savings institution. The typical neighborhood bank will offer you checking, savings and other services. Most people who open a savings account at a brick and mortar bank, will find their interest rate to be miniscule. Less than 1% is common these days.

Well, there is a remedy for those who like the security of having a separate savings account. Opening an online savings account is a safe alternative to the traditional account and you will generally earn a much better return on your money. While interests rates are largely determined by Federal Reserve policy, online savings banks are able to offer higher interest rates on their accounts because their costs are lower.

The brick and mortar bank has all sorts of overhead. A physical structure to build and maintain. Recurring monthly costs like electricity, salaries and so forth. An online savings bank has much lower costs. They basically need to have a web presence and a small staff to run the site.

Most online savings banks are affiliated with a well-known bank that has a number of physical branches. There are, however, a number of entities that operate strictly as online banks. All reputable online savings banks are just as safe as a so-called “regular” bank. Accounts are insured up to $250,000 by the FDIC and no one will lose any of their money if the bank should fail or go out of business.

There are a number of advantages, besides receiving a somewhat better interest rate. An online savings bank account gives you 24 hour, 7 day a week, access to view your balance or make a transaction. Accounts are normally linked to your local bank, so you can transfer money in or out of your account seemlessly. It is a simple matter of going online, logging into your account and requesting a withdrawal or adding a deposit. It only takes a few seconds to complete a transaction and your money will be available in a few days. There is no hassle of having to drive to your local branch or ATM machine to complete a transaction.

The only thing your computer can’t do, at least not yet, is give you cash. With a debit card issued by the online savings bank or the bank you linked to your online account, you will have access anytime you need a few dollars. These days, a debit card acts just like cash. You can charge everything from a hamburger at McDonald’s, to a new car, on a debit card.

Many people might worry about entrusting their money to an online savings account. There is nothing to worry about. As mentioned earlier, your account is completely assured by the Federal Government. All of the banking rules and regulations required of traditional banks are also followed by online banks. The threat of a holdup does not exist for an online bank. With automatic deposit available, you never have to handle cash. Whether you have a recurring payment like a social security or pension check or want to start a regular monthly savings plan, an online savings account can be set up to accomodate your request. It is a nice way to save by having $50 or whatever you can afford, automatically transferred from your checking account to your online savings account. Before you know it, you’ll have quite a substantial amount in savings!

There are a number of very good online banks that offer savings accounts. One of my favorites is ING Direct. As part of the ING Group, the Dutch-based bank has an online presence that is known for its simplicity of use, wide selection of products and interests rates higher than most of its competitors. Another excellent online savings bank is Everbank which was voted as one of the “Top Three, Best of Breed” online banks by CNN Money Magazine. Other very good choices are Ally Online, BB&T and HSBC.

Starting an online savings account is pretty simple. Basically, you fill out an application, either online or you can have one mailed to you by snail mail and make an initial deposit. You probably will want to link your account to a current checking account for easy access. That’s it. You’ll receive all the paperwork showing your account information and can begin saving online right away.

Online Secured Loan - How To Find The Best Online Secured Loan [next] [back] Online Rn Program - The Advantages of An Online RN Program

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or