Online banks are multiplying and becoming more and more popular with modern generations. They usually cost less, offer better deals, and even have better customer service. One great thing about them is that you can use them to open an online savings account that will earn you real money while you sleep. So what is a savings account, why do you need an online one and what bank to go to? Let’s find out!
What is a savings account?
A savings account is essentially a bank account that you deposit money into, generally every month. This money is your “savings”: it’s what you put aside and are not going to need to use immediately. Once you put that money into your savings account, it earns you “interest”. Interest is the money that the bank gives you for trusting them with your money. Overtime, interest accumulates. This means that if you put $1000 into your savings account, you’ll find yourself with a few more dollars the following year, etc. The more money you put into your savings account, the more interest you get, and the more profitable it becomes.
Why you should have a savings account?
First of all, let’s state the obvious. It’s good to have a little money save up in case of emergencies. You never know when you may run into a medical problem, go through an environmental crisis like a hurricane, or even lose a job. In those cases, you’ll have to rely on the money that you’ve saved. And the more you have, the better. Now the great thing about putting money into a savings account is that you not only have that reserve of money for emergencies, but it actually brings you money every year, making you richer overtime. So if you can manage to put a few hundred or thousand dollars into a savings account every year, you’ll be keeping yourself safe in case of unforeseen problems—and making more money all at once!
Benefits of having an online savings accounts
It’s easy to see why you should open a savings account, but why can’t you just go to your bank and open one? Well, you can. But you’ll actually find there are a lot of benefits that come with choosing an online bank. Here are just a few of them:
First things first, online banks usually offer you better deal. Because they don’t cost as much to maintain, don’t pay rent, and don’t have as many employees, these banks can lower their costs to offer you better deal. The difference in the percentage of interest you will be making may seem small, but it really accumulates over time! So why go with a bank that offers you less interest, just because it sounds more familiar? Online banks may be newer, but they are operated by people with the same background in finance as regular banks. The only real difference is the deals they can offer you.
With an online savings account, you can generally manage your money through an app. This makes it so much easier to take money out of your savings account in case of an emergency, or decide to put more into it. No more trips to the bank. No more appointments with a bank councillor. All you need to do is open the app or website, sign in and manage your account yourself. Not only can this save you a lot of time, it also ensures that you can manage your savings account any day and at any time, without having to worry about respecting special opening hours.
With an online bank, it’s easy to decide how much you want to save each month, and have that sum go to your savings directly. As your income gets bigger or smaller, you decide how much you want to save and how often. The power is in your hands.
Physical banks have fees that you need to pay yearly or monthly. As a general rule, online banks have much smaller fees, or no fees at all. This is because they don’t need to pay rent for a physical office, or to pay staff to be present in that office. As a result, you’ll be saving yourself a lot of money each year—which can even go straight into your savings!
The last thing about online banks that make them really useful is that they tend to have very responsive customer service. With some banks, you’ll be able to open a live chat on an app in a matter of seconds. With others, you’ll be able to contact them on the phone any day of the week, day or night. When you run into any emergency or any kind of problem with your money, that can really save you. Not to mention it’ll save you a lot of time waiting on the line, or going to visit your bank’s physical office.
Now, let us compare 4 of the best online savings account. These all have a lot of benefits that make them far superior to most offline savings account. Let’s find out which one will be the best for you!
With an annual interest yield of 1.80%, this is one of the best savings account to collect money while you sleep! It also has no monthly fee, and no minimum balance. The only downside is that it does require a deposit of $10,000 or more to open the account. If you are ready to save that much, then it’s one of the best out there.
With an impressive yield of 2%, MySavingsDirect rivals most other online banks. And the great thing about it? There is no minimum deposit requirement and no monthly fees. Visit its easy website to learn how you can switch money from your current account into this one to earn really high interest!
Discover is another great option with no minimum deposit, no monthly fees and no minimum balance. It yields 1.80% interest annually, and the bank even offers you some bonuses. You’ll get $150 for depositing $15,000, $200 for depositing $25,000. A pretty great deal from a bank that also has a good record in terms of customer service.
Ally Bank is one of the best in terms of customer service. You can chat through the app easily at any time, and get the answers you need on your savings account. Plus, it brings you 1.80% interest, has no monthly fees, no minimum balance and no minimum deposit.
We hope that this article has helped answer all your question on savings account, why you should go online, and what your options are. Remember, a physical bank offers little to no benefits over an online one, so put your money first and go for a savings account that really works for you!