Online Instant Savings Accounts

With so many transactions taking place on the Internet these days, it was only a matter of time before online instant savings accounts were created. This type of account is one that is managed strictly online. The bank may or may not have a physical location, most of the time they do have a headquarters. There are benefits and drawbacks to this type of savings account. For example, online accounts are ideal for those looking for low interest and those who want to stash money away for future purposes. As with every bank account, you should shop around and consider things like deposit insurance, ease of monetary access and the interest rates charged.

It is crucial that any money deposited to an online savings account is insured by the FDIC, which is guaranteed in the U.S. In addition, look for banks with familiar names. If you’re not sure, ask family, friends or co-workers who they bank with. The Internet is a great resource for comparison shopping and tracking down banks. Some banks may have discounts and deals for college students or business accounts. These incentives may be things like higher interest or no minimum deposit amounts.

Always consider interest rates when thinking of opening an online savings account. The average savings account is not going to pay much interest, of course the rate will vary depending on various factors. If you are vigilant with your research, it is possible to locate a savings account with a better interest rate than you may receive from a bank in you area. Credit unions and money market accounts may also offer attractive interest rates.

Ease of access to your funds is important also. See if you can link your online savings account to your existing checking account. This way, you could decide to make transfers from checking to saving on a certain date each month to make saving money effortless. Withdrawing your money should also be easy. You should be able to transfer it to your checking account or go to an ATM machine and use a debit-type card.

Penalties are something else to consider when thinking of online instant savings accounts. One fee that is often charged is if your funds drop below a minimum requirement. If you make regular withdrawals from your savings account, this might be troublesome, but if you simply deposit money and don’t touch it this should not be a problem. Therefore, your saving and spending style should be factored in when you are shopping for a new account.

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