Benefits of a Online Savings Account — And Why You Should Get One

When I addressed the question on whether you should bother with a online high yield savings account I received some great comments. One of my readers posed a great question through email. The reader inquired as to why I personally have a online savings account. As I started writing the email I realized that this was the ideal idea for a post.

Why do I have a online high interest savings account?

Higher interest rate

Well higher than a regular checking out. I’m not going to be an ING Direct or Smarty Pig shill, I will tell you how I really feel. The current interest rates are nothing special. The online savings accounts were very enticing to join when they were at near 4% but those rates have since gone down. With that being said, it’s important to note that there is no risk and you will earn more money with an online savings account than you could with your standard brick-and-mortar account.

Online savings accounts are cheap and convenient

I transfer the money from my checking account to my online savings account from my laptop while laying in bed. It’s so simple. There are no entry fees. No monthly fees. No fees period. Compared to the traditional method of walking to your local bank with your check/money in hand and dealing with bank tellers, online banking is very convenient. You can potentially go for years without ever stepping foot into a bank. I don’t know about you guys but I’m not too fond about going to the bank very often (unless they are calling me in to tell me I have too much money).

Barrier for spending money

Knowing I have to wait 3-5 days to transfer the money from my savings account into my standard checking account forces me to plan ahead. All twenty-somethings know how important this can be. Especially in a day and age where there is a plethora of options for going out and spending money, anywhere from something as simple as a night at a bar to going out for a live sporting event. Last minute offers can catch us off guard when our judgment isn’t the greatest. The end result is usually a random splurge that we clearly did not anticipate. Having my money locked away is a much needed barrier that prevents SOME of the spur of the moment purchases I have been known to make.

Ability to open and label separate accounts

As ridiculous and childish as this may sound- I love the fact that I can create separate accounts with separate labels with my online savings account at ING Direct. Online banking is simply the way of the future and I feel banks must innovate. Such a small product feature entices me to have an online savings account in tact.

I have a savings account which I labeled, “Vacation” and every week $20 is transferred over, slowly accumulating until I have enough money for a trip. I also have another savings account where I store my online income (pretty soon there will enough money in this account for a Ferrari- well a Ferrari poster). Then of course I got my regular savings account. Being able to rename my accounts is important to ME because it allows me to set goals. The question is, what is important to you from a savings account?

Why do you engage in online banking and online savings accounts? If you don’t, then why not? Is online banking right for you or not?

Leave a Comment

Your email address will not be published.