Take Advantage of Online Savings Accounts?

Answer 1

One of the great advantages of the internet is that it eliminates the need to perform many daily tasks offline. One of those tasks is trips to the bank to maintain a checking or savings account. And along with this convenience comes the advent of online savings accounts.These accounts are typically considered branch-free and are available to customers across the country, regardless of their proximity to a branch or official bank-operated ATM.

These accounts have distinct benefits over their traditional bricks-and-mortar counterparts that specifically benefit consumers -- especially those of modest means who need low startup fees and high interest rates to make their money really work for them.

Higher Interest Rates

Because these special online savings accounts don't have a vast network of branches and staff members to support, they're able to offer a higher interest rate that traditional banks simply can't match in most cases. Sometimes, this rate can reach double the rate of traditional banks. That's especially important in an era of low interest rates across the board as the government tries to stimulate the economy and protect banks from the pitfalls of the 2008 recession.

Lower Fees than Traditional Banks

Again, due to the nature of online savings accounts, there are hardly ever fees to maintain an account regardless of a higher or lower balance. Online savings accounts are typically fee-free, and most of them will even reimburse any fees incurred at an ATM for being "out of network." This, too, can be blamed on their lack of branches and extensive staff.

Extensive Online Account Management

Online savings accounts, by their nature, require an extensive support system with their online account tools. That's because there are no branches and their customer service and support networks are significantly more limited than traditional banks. For this reason, customers will have almost total control over their account online which can result in a huge time savings. They'll be able to start and stop direct deposit, transfer between their online savings accounts and other checking or money market accounts -- even at other banks -- and manage their contract and privacy preferences all online.

Branch-free online savings accounts are likely the future of savings accounts in America and around the world. Their low margins, high rates, and non-existent fees are great for modest savers in tough times, and their innovative online account management serves as a model to the world's more traditional banking brands.