Do I Have the Same Options Online for Savings Accounts?

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Do I Have the Same Options Online for Savings Accounts?

ric dalberri, Founder, RetirementUSA.com

Septemeber, 2010

In today’s economic climate we are almost forced to constantly re-visit our financial needs. A lot of us have come to the understanding that we are vulnerable, and would like to establish a nest egg to give ourselves more security. Now, more than ever, we have more options to us. For example, online banking. Online banking is a a newer concept to banking.

There are multiple reasons for the growth. One of the largest reasons is that online banks pay elevated interest rates. Due to the fact that they don’t have as many if not any brick and mortars, employees, utilities, etc., they can pass their savings on to you with higher interest rates.

A further benefit of an online bank is that even though you can with no trouble move your money back and forth between your online account and other accounts, it may not be so easy to access your cash as it would be to drive to your local bank building, walk inside and withdraw your money. One way for online would be to transfer from your savings to your checking and stroke a check. However, you still need to cash it out. There’s always an ATM card.

Previously to your opening your online account take a moment in time to find the best bank for you. There are a lot of online banks available to you. Look at all of what each one offers. They will vary.

Be sure that whatever bank you pick offers a competitive interest rate.

Now you can focus on the banks policies and procedures with regard to withdrawals, transfers, fees, etc. If you transfer funds often, this is important to consider. Usually, you are limited to how many withdrawals you can make per month without penalty.

Also, will you need a specific amount to open the account? If so, can you afford that much? Does the bank force you to keep a minimum balance? How much? If your circumstances don’t allow you to keep a specified amount, then this is not for you. Or if you are accustomed to taking money out frequently, this is not for you.

Commonly the higher the balance on your account the higher the interest rate.