Traditionally, banks fixed working hours during which they operated and people had to travel all the way to the bank from wherever they lived to open accounts, deposit, withdraw money or for any other banking needs. Banks did not operate during the nights, and any emergency need for cash had to wait till morning until the bank opens.
Things are different now. With the increase in competition, banks are vying with each other to afford as much convenience as possible to their clients, and with the advent of internet, they are able to serve their customers while they sit in the comfort of their homes. Online savings accounts are proof of this. Although, risks of online accounts is much higher for the bank, the risk is worth the reward for them.
From the client perspective, an online savings account is a good way to earn some extra cash on the cash balances and is great for young investors. Mostly, these accounts are designed to “piggy back” on the already existing checking accounts. If there is no immediate requirement for money, it can be transferred into the savings account, and when the need arises, it can be transferred right back. Some banks even allow online bill payments from these accounts.
There are several advantages of an online savings account. They can be opened online with very little amount. There are several ways to deposit initial funds into your account. A check can be mailed in to the bank or ACH debit facility may be used, which allows one to transfer funds from an existing checking account. The wonderful thing about ACH debit is that the account can be funded online without having to make a trip to the post office. It is also extremely simple transferring funds between an existing checking account and online savings account.
Banking with a saving account online allows the customer to enjoy higher interest rates. Most banks offer up to 5% currently. It sure is fun watching interest accumulate over a period of time. It is far better than investing in CDs as there is no need to wait for years for the maturity of investment.
There are several other advantages of an online savings account apart from the interest rates. Many banks provide the facility to send free demand drafts or money orders online, free electronic funds transfer, bill payment, and even a business savings account can be opened. A 24-hour access for services or transactions and consolidated statement of accounts need to be mentioned too.
For those that are planning on saving for the future and would prefer working from the comfort of their home or offices or even while traveling, an online savings account could prove to be a great help. You don’t really need to be computer savvy to operate an online account and the returns and convenience are worth the effort of learning to understand the computer better.