Shopping For Online Savings Account Rates

No matter where you are with your financial goals, it’s vitally important for you to save money for future expenses and one of the best ways to do that is with an online bank savings account.  Savings accounts in general are meant to hold money and give you a monetary return (interest earnings) for setting aside a portion of your liquid assets.

Banks, credit unions, savings, and loan companies offer online savings account rates.  There are many different types.  Some require a minimum deposit to earn the rate advertised.  Others require you to have a checking account that is linked to the account.  The money in a savings is not supposed to be used as immediate money and many banks don’t let you write checks or withdraw cash from them at ATM’s.  There are options available that let you do automatic monthly or weekly transfers from your checking to the savings account which is a great benefit.  Consider all the options and find the best online savings account rates that best suits your needs.

Before opening your account, read the small print for the account.  There are things to watch for.  For example, is there a time limit for the rate advertised?  Many times a high rate is only good for 90 days and then it falls significantly below where you started.  Be sure that the interest rate lasts long enough that it’s worth the effort to move your money.  Next, are there monthly fees for the account?  Paying fees cuts directly into your return on your deposit and they need to be figured into the total benefit.  Find an account where you can leave your funds for a significant amount of time and then check it often to make sure the specifics are the same.

The most important thing to consider before putting your money into any account is the stability of the bank you chose.  Check them out.  Carefully.  Have you heard of the company?  If not, find out who they are.  Ask friends and family or your favorite banker if they know anything about them and be sure the bank is FDIC insured.  Use the search tool at the FDIC to find out.

Use good common sense while searching for your account.  I found an online bank savings account that offered 9.65% APY with no minimum balance requirement and no fees.  Sound too good to be true?  It probably was and they were not FDIC insured.  Most online accounts are paying between 1.25 and 1.70% APY right now.  When an advertised return is that far from the rest of the pack, you might as well play the lottery with your money.  You want to save money and enjoy healthy returns, not lose it.

In branch savings accounts are not the place to accomplish your savings goals.  Your goal as a short-term or long-term investor should be to maximize the money you earn.  Putting some of your assets into an online bank savings account will help you make your goals a reality.