Online Savings Account - You have some Savings, Now what do you do?
Or maybe you have just landed here and have some extra money that you are looking to put away in a high interest savings account?
Whatever the case, I’m pleased to present this page about establishing an Online Savings Account.
Is there a difference between a traditional savings account and an online savings account? You can bet your bottom dollar there is!
The most important difference is the interest paid by an online savings account. It’s higher than a traditional savings account, and that means you earn more on your money. Who can complain about that?
Online banks are able to offer higher interest rates on an internet savings account because they have minimal overhead compared to a traditional financial institution. Think about this the next time you visit your bank…Who pays for the building and nice furniture? What about the tellers salaries?
A traditional bank with a physical presence has overhead to maintain and that costs big dollars, whereas an online bank conducts their business over the internet therefore reducing their operating costs and passing along the savings to you, the consumer.
They do this by offering high yield savings accounts.
An Online Savings Account is a great tool to have in your savings arsenal that allows you to capitalize on the interest rate you get on your hard earned money.
What kind of high interest rates are we talking about?
If you are considering establishing an online savings account as opposed to a traditional savings account, you will obviously want to ensure that you get the best possible high interest rate.
Way back when the economy was more stable, internet savings accounts typically offered interest rates that ranged from 3% to 5%.
In 2010, we're looking at rates that range from 0.75% to 1.40%. You can still find some online institutions that offer interest rates up to 3.25% but they are few and far between and or have restrictions.
There are great online tools available that compare the different internet banks and the interest rates they offer for their savings accounts. One that I particularly like is SavingsAccounts.com.
Make sure to pay attention to the "fine print" as some online banks offer higher interest rates, but your account will require a high minimum and/or daily balance.
Open a Savings Account Online
So you've decided to open an Internet Savings Account? Great! Here is the low-down on establishing a new account...
Once you have decided which online financial institution best meets your needs, you can open your new savings account directly on their website.
Here are some popular picks:
- SallieMae
- ING Direct Orange Savings
- EverBank
- FNBO Direct
- AllyBank
Be on the lookout for incentives or bonuses when establishing your online savings account, as sometimes the internet banks offer a gift of some sort or will deposit money in your new account, simply because you chose them or make your initial deposit.
Not a bad way to kick start your savings into high-gear and get you motivated!
More Useful Information about Internet Savings Accounts
The Downsides of Internet Savings Accounts - The cash is not always greener on the other side. Learn about some of the restrictions and downsides on these types of accounts.
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Quotes to Ponder
"A bank is a place that will lend you money if you can prove that you don't need it."-Bob Hope
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