There is no shortage of benefits associated with online savings accounts. When compared to more traditional options — such as products from local banks — you may find that the decision is easy.
Here are some of the many benefits of an online savings account:
You can earn interest
With less overhead, online banks have the ability to offer a higher interest rate. And with that, you can earn more money on your balance every month. Even if you don’t have what you consider to be a large sum of money in your savings account, a higher interset rate allows you to generate greater returns.
Tip: Compare interest rates at local banks to online banks. It only takes a few minutes and it’ll open your eyes as to where you can secure the best rate.
Traditional brick and mortar financial institutions are known for a variety of fees, many of which can impact your ability to save at an efficient rate. For example, if you don’t keep a minimum balance in your savings account, you could get hit with a monthly fee.
No two banks are the same, so make sure you check the fee schedule before opening an account. You don’t want to run into any surprises down the road.
Tip: Compare a minimum of three to five banks — both online and brick and mortar — to gain a clear understanding of which one has the most competitive fee schedule.
Easy access to your funds
Online banks are well aware of the fact that you don’t have access to local branches. And for that reason, they make it extremely easy to access your funds. For example, you can transfer funds to accounts at other banks. You can also use your online account to pay your bills or make regular savings contributions.
Tip: Read online reviews of individual banks before deciding where to open an online savings account. Also, if you have any questions, reachout directly to the financial institution for clarification.
With benefits like these — among others — you should strongly consider opening an online savings account. It’s a big change for many people, but it’s one that could improve your finances in a variety of ways.
There are more online banks to choose from than ever before, so take your time, ask questions, and make a final decision when you’re comfortable doing so.
Do you have any experience with an online savings account? Is it something you would suggest to others?