High Interest Online Savings Accounts

A savings account is a virtual must today. Most financial advisors will tell you to have at least three to six months’ worth of income in a savings account drawing interest just in case you ever have a lapse in employment, an extended injury or illness or other financial emergency. That being said, online savings accounts have become very popular as more and more consumers are enjoying the convenience of being able to save money and manage their accounts from the comfort of their homes. When choosing to save money, finding a high interest bearing savings account is an excellent idea. Deposits are now insured by the FDIC for up to $100,000.

There are many ways that you can go about finding an online savings account that offers a high interest rate. The best way is to do a bit of research on your own and take a look at the various banks and financial institutions that provide this service. Whether you are investing $100 or $100,000, a higher interest rate means a higher return in the long run. You should note that some online banks do require varying amounts for initial deposits. You will need to check with your preferred institution to learn more about the minimum deposit requirements for opening high interest online savings accounts. Years ago you would have needed to invest tens of thousands of dollars in order to qualify for a high interest bearing account. Today however, most average consumers can easily afford the minimum deposit requirement. In addition, many online banks no longer carry a minimum balance requirement.

Many online financial institutions offer more aggressive percentage rates for online savings accounts than traditional brick and mortar banks. This is often because operating costs for online institutions are much, much lower than for traditional banks. Online institutions have no costs related to overhead whereas traditional banks have bank managers, financial officers, utilities and other costs which can significantly lower the interest rate on your savings.

There are a number of things that you should look for when choosing a high interest online savings account. The first thing is to ensure that you are using a legitimate online financial institution. A quick internet search and a bit of research should tell you whether or not your institution is legitimate and trustworthy. Look for things in addition to a high interest rate. Things such as features, perks and restrictions should be considered when choosing. Keep in mind that competition among banks, even online banks is very high so they may be competing for your money. This is an advantage to you as they may offer you an even higher rate than you imagined.

Check to see what the interest rate is and whether the rate is fixed or an introductory rate. Look also to see how the interest on your savings will be calculated and paid. Most savings account offer daily interest rates that are paid monthly. You will also want to check to see if the institution has a minimum deposit amount. Some high interest online savings accounts require you to make a minimum deposit of as much as $2,000 or more in order to open the account. You should see if any fees will be charged for the account and if there are any penalties for withdrawals. Finally, check to see when and how you can get to your money if you need it. Many online financial institutions will link your online savings account to a traditional checking or savings account and allow you to transfer funds when needed. This may take a few days however before the transfer goes through. See if the bank that you choose offers an ATM or debit card that will allow you to access your money quickly in the event of an emergency.

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