\Online savings accounts are starting to get more publicity, but even five years ago it was tough to find reasons to move your money online. Concerns over security and name recognition kept many customers in their brick and mortar institutions. Now the secret is out and people are discovering higher interest, better security and easy access to their money on their phones and through websites.
Easy Access to Money
Making transfers with an online bank can be done from within the main menu of most online banks. These money transfers usually occur same day, and you can retrieve your money from an ATM. Parents like to start college funds, and online savings let you store those funds so he or she can retrieve them for college. You don’t need to waste gas traveling to and from the branch, and checking your account balance takes only a few minutes.
Higher Interest Rates
Interest rates refer to the amount the bank is giving to you in interest for holding your money. If you’re looking for a high yield online savings account, review online savings rates by Discover Bank. The extra interest can put money in your pocket for emergencies or give you more for your retirement fund. If your child has trouble saving, you can help set up an automatic transfer so your account gets ten to twenty percent of your paycheck before you have a chance to spend it.
Easy to Shop
By definition, online savings accounts exist on the Web and are much easier to shop. A standard brick and mortar bank may publish some of their figures on interest, but you’ll need to speak with someone at a branch to get the full details. This transparency, aided by sites like BankRate, shows consumers how to shop for better rates in real-time.
Banking online saves you precious time. You don’t have to wait in line for the next available teller, and you don’t have to interrupt your day to drive to the bank in the first place. For anyone with young children, that’s a relief. You can also monitor your account quickly, and review all transactions as they come in. Unless you sign up for online banking with your bank, you may be waiting to review your statements.
In addition to the cut down in gas that you use in your car, the fact that online banks don’t need brick and mortar stores cuts down on their carbon footprint. Your investment in online banking is actually green!
Bill paying services through online banks let you schedule payments to be deducted from your account. This saves you the headache of keeping track of those bills (who can remember their Netflix billing date in addition to everything else we pay?) and you know what’s in your account at all times. Bill pay services are also secure and you get the reassurance that the money has left your account and is not simply “in holding.”
Electronic Bank Records
When you have access to your account online, all of your bank records are accessible at all times. This is good come tax time when those statements might help you find a deduction. You can also see when charges are processed in real-time and set notifications to email or text you if there is activity you did not authorize.
Loans are one of the biggest money makers for banks because of the interest you pay over time. Loans are available through online banks, and less overhead means better rates. If you are using online banking and are considering a new car or major purchase, check with your bank to see if you can get better rates than with the creditor.
Easy Money Transfers
Money transfers can cover all of the unexpectedness that arises and keep your account balances above the red line. You can also transfer easily from your bank online to your retail bank for a little extra spending money. If you do freelance work, an online bank is great for storing funds the client pays, as the interest adds to your paycheck.
Online banks use a series of security protocols designed to keep your funds safe. Things like forcing an HTTPS connection and using sophisticated encryption to hide the details of your activity. Most online banks still rely on the PIN, but your account may have several layers of security (like a request that sends a text to you if an unknown IP accesses your account).
It’s true that banks online don’t have as many costs to consider as a retail bank, but security is paramount. If you’re looking for safe storage and higher rates, online savings may be for you.