July 8, 2020

The Benefits of Opening a Savings Account Online

Benefits of Online Savings AccountThe ease and accessibility of online savings accounts have made them a very popular money market option for many people. Almost everyone has a smartphone, tablet, or computer, and most people complete tasks with these devices on a daily basis. With the shift from brick-and-mortar stores to Internet-reliance banks are having to make changes to keep up with customers’ requirement for convenience. Offering online savings accounts is just one way in which they are striving to meet the demands of 21st century bankers. But what are the advantages? Are there any downsides? Are online accounts really worth it? Here are some factors to consider

Better Interest Rates

The biggest advantage that online savings accounts have is that most of them can offer high rates of interest than brick-and-mortar savings accounts. Operating an online presence is much cheaper than operating a physical location, and the lower administrative and overhead costs mean that better rates can be offered instead. This is great news for the customer, and the interest rates can sometimes be as high as three percent more than regular savings accounts. An additional plus is that some banks give a monthly interest rate option in which the interest gets credited to your savings account every month.

Other Benefits

Another benefit, and one that might seem obvious, is that unlike regular banks online savings accounts have 24/7 access. This means you can make deposits, withdrawals, and transfers any day and at any time, even on holidays. The application process is much easier and quicker online, and you can often get approval within just a few hours of submitting. Finally there are some online savings accounts which provide you with free withdraws and that do not require a minimum balance be held in the account.

Compare Your Options

The best way to find an online savings account is to spend some time shopping around. Really this is another benefit of these types of accounts, as you can easily compare multiple options side by side on the web. Terms and conditions are different between every lender, so be sure to look into all of the details. The biggest benefits for you will be the rates of interest and the flexibility of the account. The things that will harm you the most are the various fees, penalties, and hidden costs. Another thing to keep in mind, which most people don’t think about, is how income tax deductions are factored with the account.

Savings for the Next Generation

Online Savings AccountsAnother upside to online savings accounts – to add to the already long list – is that parents can easily open and operate savings accounts for their children. In a way these work sort of like joint savings accounts. These accounts usually have even higher rates of interest and they can be linked to the parent’s checking account for easy fund transfers. All of this will allow parents to easily and efficiently set aside money for their children’s’ future, such as funding for college. And when the children get older they can start depositing money of their own to grow the accounts even more.