| With the current economic downturn many people have been re-evaluating their financial habits. Many have come to the realization that they are vulnerable, very vulnerable, and would like to build a nest egg to give themselves more security. When it comes to building that nest egg you have more options than ever, one thing you can do is open savings account online.
Online banking is a relatively new alternative to the brick and mortar corner bank, and they are growing in popularity.
There are several reasons for the growth. One of the biggest reasons is that online banks pay higher interest rates. Since they don't have a building to maintain, tellers to pay, and all the overhead associated with an offline location, they can pass that savings on to their customers in the form of higher interest rates. The rates are often 2 to 3 times higher than their offline counterparts.
Another advantage of an online bank is that even though you can easily transfer your money back and forth between your online account and other accounts, it's still not as easy as just running down to your local bank and taking out your money. For many people, who might lack some discipline, this is a big advantage. It means they will be less likely to just withdraw money on the spur of the moment. Before you open your online account take some time to find the best bank for you. There are a lot of choices available, some are better than others. You want to look at many aspects of the bank and not just the interest rate.
Make sure that whatever bank you choose offers a competitive interest rate. Like I said above, that isn't the only thing to consider, but it is important and it is a good place to start.
Then you can narrow the field by looking over their policies regarding withdrawals and transfers. What fee's, if any, will you be charged each time you transfer money from one account to another? If you are prone to transferring money frequently this is an important thing to consider.
Also, will you need a certain amount to open the account? If so, can you afford that much? Does the bank require you to maintain a minimum balance? How much? If you don't have a very big account and frequently pull money from your savings account fee's like these could add up quickly.
Generally the higher the balance on your account the higher the interest rate will be. So if you use interest rate as the only parameter when shopping around for your online bank, you might be in for a bad surprise down the road.
Instead of fretting about the current economic situation we would all be much better off if we evaluate our financial situation and make appropriate changes now. A good first step would be to open savings account online. Just make sure to invest a few minutes to find the right combination of features for you and your needs. |